Shaktikanta Das: Fintech and the changing financial landscape

Keynote address by Mr Shaktikanta Das, Governor of the Reserve Bank of India, at the Global Fintech Festival, Mumbai, 6 September 2023.

The views expressed in this speech are those of the speaker and not the view of the BIS.

It gives me great pleasure to be here at the 4th edition of the Global FinTech Festival (GFF). I compliment the organisers for bringing all stakeholders of the FinTech ecosystem together for this three-day event with the aim of achieving a common goal of inclusive, resilient, and sustainable financial system. It would be obvious to state that innovation is the bedrock of the FinTech industry. Events such as these festivals enable sharing of knowledge and experience with peers, both domestic and global, which facilitate more innovation. By bringing regulators and FinTechs on the same forum, the festival also facilitates an understanding of regulatory expectations by the industry on the one hand, and appreciation of industry developments and expectations by the regulators, on the other. Such thematic events provide the right kind of platform for nurturing a more vibrant FinTech ecosystem.

In my address today, I propose to touch upon changes in the financial landscape with the advent of FinTechs, with particular emphasis on the role of Digital Public Infrastructure and role of the Reserve Bank in fostering innovation.

The landscape of traditional financial services has undergone a profound shift with the advent of FinTechs. This transformation has significantly impacted delivery of financial services by making them faster, cheaper, efficient and more accessible. The global FinTech sector which currently generates $245 billion annual revenue - a mere 2% share of global financial services revenue - is estimated to reach $1.5 trillion annual revenue by 2030. The Indian FinTech industry is projected to generate around $200 billion in revenue by the year 2030. This projection indicates that by 2030, India's FinTech sector could potentially contribute to approximately 13% of the global FinTech industry's total revenue. These projections underscore the increasing significance of the Indian Fintech sector.

Technological innovations by FinTechs are the result of interplay between the underlying (i) digital public infrastructure; (ii) institutional arrangements; and (iii) policy initiatives. These key elements help foster a conducive environment for nurturing creative ideas and promoting transformative technologies, which lead to beneficial and impactful changes in the financial industry. Let me elaborate on these three aspects.