Fintech Beyond Boundaries

Background: 

With the establishment of two institutions in 2009, India's fintech journey began. The National Payments Corporation of India was the first to take over ATM networks in India in order to modernize retail payments and settlements. The second step was the establishment of India's Unique Identification Authority. 

India Stack

• The India Stack is a set of APIs that allow the government and private sector to deploy cashless and paperless technology.
• Although the owners of these APIs are responsible for their upkeep, the India Stack encourages developers to use them by hosting events. 
• Key Parts of India Stack 
  

• Unique Identification Number: The UIDAI makes up the India Stack, also known as the Aadhaar Stack. This is the individual's unique identification number, which is linked to their biometric readings.
• e-KYC: The e-KYC project allows businesses to obtain instant customer verification. 
• AEPS: AEPS expands financial inclusion by allowing government entitlements and bank-to-bank transfers to be disbursed at retail outlets that can go cashless.
• UPI: A payment request and a customer can use the Unified Payment Interface to send funds to a beneficiary and collect payment requests from customers. 
• eSign: eSign is enabled through an API that facilitates an Aadhaar cardholder to electronically sign documents. This is authenticated through biometric readings and through an OTP.
• DigiLocker: DigiLocker is used as a Government of India repository for documents. o Digital Signature: Digital Signature provides the capability that allows individuals to electronically sign contracts with any entity without a pen or paper. 

• Digital Public Infrastructure (DPI)

• DPI refers to digital solutions that enable basic functions such as collaboration, commerce, and governance, which are critical for public and private service delivery. 

• Digital Public Goods (DPGs) 

• DPGs refer to open source software, open data, open AI models, open standards, and open content that adhere to privacy and other applicable best practices. 
• They're an important tool for constructing infrastructure in ways that avoid some of the drawbacks of proprietary software-based solutions. 

• FSCA - The Governing Body 

• The IFSCA was established under the International Financial Services Centers Authority Act of 2019.
• In India, the IFSCA is the single body in charge of the creation and regulation of financial goods, financial services, and financial institutions.
• India's first international financial services center is the GIFT IFSC.
• IFSC serves as a unified authority for the development and regulation of financial products, financial services, and financial institutions.

• Data and standards 

• People and small businesses can now retrieve and use their data thanks to digitized infrastructure.
• To make this open-banking system work, a standard language will be needed, similar to how UPI created a payment protocol.
• The National Payments Corporation of India (NPCI) is launching an Open Credit Enablement Network (OCEN) to connect lenders and marketplaces. 

• Conclusion: 

India has demonstrated to the rest of the world that it is unrivalled in terms of technology adoption and innovation. Digital India's transformational initiatives have paved the way for innovative Fintech solutions to be used in governance.