With GFF coming up, focus on bridging gap between regulators, fintechs

One of India’s biggest fintech events, the Global Fintech Festival (GFF) 2024, is just a few weeks away.

The fintech conference, scheduled between August 28 and 30, will host over 800 speakers across more than 350 sessions, expecting a footfall of over 80,000 participants.

The three-day event comes at a time when the fintech sector, spanning areas such as digital payments, lending, insurance, and wealth, continues to expand in the country.

In the first half of 2024, funding to fintech firms was pegged at $795 million, compared to $1.93 billion during the same period last year, according to data from market intelligence platform Tracxn.

This year's GFF also comes in the wake of increased regulatory oversight of the fintech sector.

G Padmanabhan, former executive director of the Reserve Bank of India (RBI) and member of the GFF 2024 Advisory Council, said there is probably a trust deficit between the regulators and fintechs.

“There is probably a trust deficit between the regulators and fintechs. How the fintech sector embraces this is one of the things we hope to discuss during the global fintech festival,” he said.

Padmanabhan’s observations come amid wider regulatory scrutiny of the fintech sector in the past few months.

Earlier this year, the banking regulator issued directions to card networks and fintech firms to put on hold all commercial card-based transactions made by companies. The flow of funds through commercial cards to merchants or vendors that may not have followed Know Your Customer (KYC) procedures prompted the action.

Similarly, the RBI outlined KYC procedures for small and medium-sized merchants this year.

Players had reached out to the regulator requesting a ‘risk-based graded approach’ to KYC since some merchants might be “too small” to go through the entire process, which requires physical verification of such customers.

Fintech’s concerns stemmed from rising costs of the KYC procedures for smaller merchants.

In January, RBI cracked its whip on Paytm Payments Bank, the associate entity of One97 Communications which operates Paytm, placing crippling restrictions on the company.

Padmanabhan added that regulatory sandboxes and self-regulatory organisations for the fintech sector (SRO-FT) would turn out to be the new order of things, and would be part of discussions at the GFF this year.

“Self-regulatory organisations are going to expand the future development of fintech as we look ahead. These are the kinds of discussions that will happen at the fintech festival,” he added.

Meanwhile, GFF will focus on India’s homegrown digital public infrastructure (DPI).

These DPIs, such as the Unified Payments Interface (UPI), account aggregator (AA), Aadhaar, and Bharat Bill Payments System (BBPS), among others, can be showcased to the global audience.

“There are many DPIs that have been started by the initiative of the government and the RBI. We can showcase them to the global stage and show the world India models through the event,” said National Payments Corporation of India (NPCI) chief Dilip Asbe.

Similarly, there will be discussions around emerging technologies such as artificial intelligence (AI), generative AI (Gen AI), and big data, among others, at the fest.

“There are several sessions planned on AI and Gen AI. There are benefits and downsides to emerging technologies, and a careful balancing act is required. Other topics include implications on jobs, how these will change, and if these technologies will have an impact on them,” said Kris Gopalakrishnan, a co-founder of Infosys.

He added that some sessions may focus on debates such as open and closed architecture, the need to focus on privacy when using data for training AI, and collaboration between different stakeholders such as the government, financial institutions, investors, and customers.