India announced its Union budget for the financial year 2021 and the FinTech ecosystem seems to have given it a thumbs up. Country’s Finance Minister Nirmala Sitharaman on February 1, has proposed to roll-out a new policy for building data center parks across the country and allocated $1.14 billion to invest in futuristic technologies such as Quantum Computing, Artificial Intelligence, Machine Learning, and Data Analytics and harness these technologies to achieve financial inclusion. Experts believe that these steps would help FinTechs at large to enter the rural markets and provide better quality services at lower costs.
“India has already embraced new paradigms such as the sharing economy with aggregator platforms displacing conventional businesses. Government has harnessed new technologies to enable direct benefit transfers and financial inclusion on a scale never imagined before,” Sitharaman said in her Budget speech adding that the new economy is based on innovations that disrupt established business models and that AI, quantum computing, analytics, FinTech and Internet of Things (IoT) are changing the way of lives.
“To take advantage of this, I propose to bring out soon a policy to enable the private sector to build Data Centre parks throughout the country. It will enable our firms to skilfully incorporate data in every step of their value chains,” she said.
The Government’s proposal for data centers comes in the backdrop of data protection bill tabled in Parliament and banking regulator the Reserve Bank of India’s norms on data localization for protecting consumer’s financial information in line with the European Union’s General Data Protection Regulation (GDPR).
Sanchit Gogia, CEO at Greyhound Research was of the view that the announcement on Quantum investments is right in time and that global players such as IBM and Google are likely to invest heavily in infrastructure in India. So far most of the investments are going towards developed countries such as the US, he added.
Let’s see how the FinTech players reacted to the proposal.
Vinay Bagri, Co-founder & CEO of neo-bank NiYO said :
The government’s initiative to set up data center parks will enable FinTechs like us working for financial inclusion for ‘Bharat’ get access to a wide range of reliable data and insights about customers.
Jonathan Bill, Co-founder & CEO, debt collection platform CreditMate:
CreditMate welcomes the establishment of greater Indian data centers and facilities as announced by Finance Minister in the Union Budget 2020. We place a high emphasis on data security and data sovereignty, providing a superior and fairer borrower experience and an environment where contact between collectors and collection agencies is transparent and can only happen through our platform.
Sujit Narayanan, co-founder of neo-banking firm epiFi:
With the push to skill India’s youth in cognitive technologies and the policy to build data center parks, the Government is reinforcing the importance of digital innovation and will help make the youth more employable by bridging the knowledge gap between demand and supply of talent.
Abhishek Kothari – Co-Founder at FlexiLoans.com:
The Union Budget 2020 has shown a ray of light for the Fintech sector, with FM Nirmala Sitharaman stating that India will embrace a shared economy with aggregators displacing regular business. The importance of Analytics, IoT, and AI has been recognized in this budget, as they are set to change the world. A policy has been announced to set-up data center parks all through the country.
Navin Surya, Chairman, Fintech Convergence Council:
It is good to see technology find a significant mention in the budget. If done correctly, setting up Data Centre Parks, Fibre to home and investments in quantum computing, have the ability to create a digital connected India. The Union budget 20-21 has invariably used Artificial intelligence, machine learning, IoT, UPI among others quite many times probably for the first time. thus the intent seems to be very clear – a strong drive towards an all-growing digital economy.
Ketan Patel–CEO, CASHe :
Announcements such as setup of Data Centre Parks, Fibre to home will bring a larger set of rural populations on the internet world which will help the fintech companies in India to expand and offer additional services to them. This will also lead to an increase in job opportunities in rural regions.
Bhavin Patel–Founder & CEO, LenDenClub:
Setting up of ‘Data Centre Parks, Fibre to home’ which will encourage a larger set of rural population to get on the internet, which in turn provides an opportunity for fintech companies in India to expand and gain access to a diverse population, by offering additional financial services to them.
Vikas Garg, Deputy CFO, Paytm:
We see this budget as a good step in the direction to become a $5 trillion dollars economy. As a technology player embedded in India’s technology ecosystem, we welcome the government’s vision to build Data Centre Parks in the country. The government’s focus on enhanced digital connectivity, and focus on emerging technologies such as machine learning and artificial intelligence, along with the allocation towards quantum computing are sure to provide a fillip to India’s economy.