"I see you are the future in the financial space; that's very clear to me,? said Mr Garg, while addressing the gathering of bankers and fintechs. He was alluding to the theme of the conference, 'Fintech Sector in India: The Next Phase of Growth'. He said that the branch and office are the hallmark of traditional banking. But that will change. "In future, the financial services would be delivered essentially by fintech," he added.

He also described fintech as the delivery of financial services to customers using technology instead of manual means.

Garg said that Fintechs offer a tremendous advantage in terms of cost, agility, ease of use, and reach. He predicted that fintech is poised to grow. In India, the growth has been phenomenal in the payment space, and not much in other areas such as credit or pensions. But these areas will also get covered.

He explained that a lot of work has been done by the Government such as the creation of open APIs that helped fintech companies to grow. He attributed this to the innate dynamism of those in the fintech industry. "We need to grow those open APIs in other spaces; that is going to happen," he assured.

The Government realised the need to give a fillip to the fintech industry and constituted a steering group in the finance ministry. It looked at all aspects very closely and made its recommendations. The recommendations are expected to be announced very soon.

"There are about 48-50 very good, succinct recommendations, very specific, covering almost all the sectors directly in the financial space, and also indirectly."

Another aspect is regulation. RBI has demonstrated openness in creating regulatory models for various kinds of experimentation. With the dynamism shown by the sector in working with the Government and regulators, Mr Garg foresaw very good growth of the fintech space in the near future.

However, he sounded a note of caution. One issue in the recent past, after the judgement on Aadhar, gave a setback to the fintech industry. This was in connection with the ability to use KYC and digital data.

"That is the advantage; if that advantage is taken away, then it?s unlikely to help the entire industry." He mentioned that there has also been an attempt to bring in a data protection law. In his opinion, this is a conflict that needs satisfactory resolution. Most financial data is personal, and there has been a tradition of keeping information private. But in that case, the industry cannot will find it difficult to deliver. "How do we ensure that what is really personal remains in the control of the right people?" he said.

Garg pointed out that data is identity. "There is no difference today between a person and his personal data." But at the same time, fintech runs on data, so that data needs to be available. Otherwise all advantages that come from fintech will be lost. He recalled the way we dealt with financial personal information earlier. "We have very critical information on a cheque which is signed. Can that information not be available for the fintech industry?" But banks have a lot of safety provisions built around their operations. In fintech, the data gets transferred so fast, nobody knows where it is going. "Therefore, a new kind of system will need to be designed which assures that the information is not misused. That is what we will have to resolve."

V G Kannan, Chief Executive, IBA said that in India, fintechs contribute towards financial inclusion in a big way, meeting the underserved needs of the country. "Fintechs are able to make a difference in the delivery of financial services to customers." IBA and banks support these new technologies and likewise, fintechs have helped many banks introduce chatbots. Many banks have set up innovation labs, incubators and accelerators to help both the banks and the fintechs.