Great scope for fintech co-operation between India, France: Nandan Nilekani

Billions of dollars were transferred through the cash transfer programme using the Aadhaar platform during the Covid-19 crisis directly into the bank accounts of vulnerable people

Nandan Nilekani, founding architect of Aadhaar and co-founder of Infosys, said on Friday that there is a big potential for India and France to collaborate on financial technology ideas including ‘account aggregator’ framework which manages consent for financial data sharing.
 

He said that in Europe, including France, there's a big discussion going on about how to empower people with data. This includes the revised Payment Services Directive (PSD2) which aims to further modernise Europe's payment services for the benefit of consumers and businesses.
 

“I think there's great scope for cooperation between France and India on some of these ‘account aggregator’ ideas, which I think have applicability on both sides,” said Nilekani at the Bengaluru Tech Summit, 2020, which was held virtually. He was speaking during a session on “Why the future of Fintech is French.”
 

He said the ‘account aggregator’ programme is a way to empower people with their own data. This is important in the context of discussions happening all over the world, that data has become so critical. The aim is to make sure that individuals have access to their own data. The ‘aggregator infrastructure’ in India is based on the premise that every individual or every business can access their own data in real-time from whatever source they have. Nilekani said it is currently being rolled out in the financial sector, under the guidance of the Reserve Bank of India (RBI).
 

Many of the major banks have joined the network. It allows individuals and businesses to use their own data to get financial services. For example, a small business can get bank account bank statement details, Goods and Services Tax (GST) invoices and income tax payment details and combine all of that and give it to a lender.
 

“The lender can then decide to give me a loan,” said Nilekani. “This is very very important because this is about democratizing access to credit,” he said.
 

He highlighted the strength of French financial technology. Nilekani said when he was the chairman of the Unique Identification Authority of India (UIDAI) the challenge was how to get a digital ID to a billion people. The only way the organisation could do that was through ‘biometric deduplication’ to make sure that an individual got only one number. At that time nobody in the world had done 'biometric deduplication' of 1 billion people.
 

“But we worked on that project, and of course France has always been a leader in biometrics, both in terms of smart cards and as well as in terms of biometric deduplication,” said Nilekani.
 

One of the important technology partners which played a key role in the deduplication process was French company Morpho which is now known as IDEMIA. It is a multinational technology company and identity-related security services. It sells facial recognition and other biometric identification products and software to private companies and governments.
 

“I have used French technology,” said Nilekani. “Ultimately the Aadhaar project now has 1.25 billion people on it and it is the basis for financial inclusion because 400 million bank accounts have been opened with the Aadhaar e-KYC (know your customer).”
 

He said France has a great history of technology. He gave the example of French innovation Minitel which was a videotex online service accessible through telephone lines. It was the world's most successful online service prior to the World Wide Web and brought online banking and travel reservations to millions of users in the 1980s.
 

Nilekani also mentioned that he has a long association with France. For instance, Infosys is the digital innovation partner of The French Open, also called Roland-Garros, a major tennis tournament held in Paris. A lot of the advanced artificial intelligence work done at Roland Garros has been done by Infosys.
 

“I was amazed to see the number of startups in France, and the kind of activity which is happening in France,” said Nilekani. “I'm quite sure that the French technology revolution will be very advanced,” he said.
 

India has also built a lot of digital public infrastructure in the last 10 years, including Aadhaar platform, which is used to open bank accounts. It is also the basis for the world's largest cash transfer programme where money is credited directly into bank accounts using the Aadhaar number. “Billions of dollars were transferred during the (Covid-19) crisis directly into the bank accounts of vulnerable people so that they could get access to their money immediately,” said Nilekani “That's been a big benefit from this infrastructure.”
 

Another important piece of fintech innovation in India is the UPI (Unified Payments Interface) system. It is an instant real-time payment system developed by National Payments Corporation of India (NPCI) facilitating inter-bank transactions. Nilekani was the advisor to NPCI, when UPI was launched in 2017 and it did hundred-thousand transactions initially. “Now it does 2 billion transactions a month,” said Nilekani.
 

He said UPI is a very important part of the fintech revolution in India. This is because on the back of it many many companies have come up, which have built the infrastructure for banks.