Fintech Industry seeks implementation of national digital ID system

by James · January 18, 2023

The fintech industry is one of the fastest growing sectors of the economy and there is a lot of anticipation surrounding the upcoming Budget 2023. According to a recent report, the fintech market is expected to reach Rs 9.2 billion at a CAGR of 24.96 percent between 2022 and 2027. The industry is actually expanding at breakneck speed as a result of new trends and technology, and the market is seeing an increase in digital payments. In this budget, the government is expected to continue its support for the fintech industry and announce a number of measures to promote its growth and development.

Let’s look at some big expectations for the fintech industry from the upcoming Union Budget:

Table of Contents

Financial inclusion and digital infrastructure

One of the most important focus areas in the budget is probably the use of technology to increase financial inclusion. The Government has made significant progress in recent years to improve access to financial services for marginalized communities, and hopefully this will continue in the Budget. Measures such as the implementation of a national digital ID system and the development of digital infrastructure in rural areas will help bring more people into the financial system, so that they can benefit from fintech.

Innovation and research and development

Another key area of focus is likely to be the use of technology to improve financial services. With the use of new technologies such as blockchain and artificial intelligence, there are a growing number of opportunities to improve the efficiency, security and accessibility of financial services. The government is expected to announce measures to support innovation and research and development in the fintech sector, such as funding for R&D and tax incentives for companies investing in new technology.

Support Fintech Start-ups

It will be both a boost and a relief to receive grants and subsidies for start-ups and tax rebates for angel investors and venture capitalists. This will attract more investment and talent to the sector and will make it easier for new businesses to get started. In addition, reducing bureaucracy for starting fintech companies in the country can also be a key focus.

Regulatory framework

One of the main challenges facing the fintech industry is the regulatory environment. The government is expected to announce measures to promote a more consistent and predictable regulatory environment for fintech companies. This could include creating a dedicated fintech regulator or a separate fintech wing within the existing regulator to oversee the industry or even establishing a sandbox regime that would provide a safe environment for companies to test and develop new products without fear of large fines or penalties. These measures will help create a more favorable environment for fintech to operate, which in turn will encourage innovation and growth in the sector.

Digital payments

In addition to these measures, we also expect policies that will support the growth of the digital payment industry. With the increasing use of mobile phones and the internet, digital payments are becoming increasingly popular, and it would be beneficial if the government announced subsidies for merchants that accept digital payments, and incentives for consumers to use digital wallets.

Cyber security

Cyber security is an increasingly important issue in the fintech sector, and we need the government to focus on strengthening cyber security in the sector. This could include imposing certain cyber security standards on fintech companies and providing funding for research and development in the same.

All things considered!

In conclusion, the fintech industry is expected to be a major focus of the 2023 budget. The government is expected to continue its support to the sector and announce a series of measures to promote its growth and development. Whether it is increasing financial inclusion, improving financial services, creating a favorable regulatory environment, supporting digital payments or improving cyber security, the government’s decisions will have a major impact on the future of the fintech industry in the country.

Abhijeet Sehgal is the co-founder and CEO of 1Pay

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