IFTA FOSTERING INNOVATIVE COLLABORATIVE ECOSYSTEM
The highly anticipated India FinTech Summit 2024, theme – “AI-Driven Fintech: Shaping the Future of Finance,” focused on the seamless integration of Artificial Intelligence (AI) and Financial Technology (Fintech), as it continues to redefine the financial landscape, as we aim to explore the limitless possibilities that this dynamic partnership brings forth.
IFTA 2024 delved into the transformative impact of AI-driven Fintech on various aspects of the financial ecosystem, including enhanced personalization, bolstered security, and streamlined efficiency. The event featured insightful discussions and showcases of groundbreaking advancements that are revolutionizing our understanding and approach to finance.
Mr. Prasanna Lohar – Chief Executive Officer, Block Stack and Convenor, IFTA 2024 presented on Pioneering Future Finance: Vision 2030 and Beyond, some takeaways.
Digital Transformation of Banking Infrastructure
Prasanna Lohar envisions a fundamental shift in banking infrastructure by 2030, moving away from traditional core banking models toward data-centric frameworks. This transformation represents a pivotal change in how financial institutions will operate in the future.
From Core-Centric to Data-Centric Banking
The future of banking will witness a foundational shift where “the core is moving the center has moved to data now because the minute you start seeing data as the center your opportunities are infinite”. This perspective aligns with the industry-wide recognition that data, rather than traditional banking cores, will drive innovation and create unlimited possibilities for financial services.
API-Driven Banking Ecosystems
A critical component of this transformation is the development of robust API layers. These will enable financial institutions to meet customers where they are rather than expecting customers to come to them. As Lohar notes, “API is as important as data because finally what is happening… no longer Banks can hope that they will ask customers to come and meet them where they want to”[5]. This shift toward API-driven banking reflects the growing importance of embedded finance and Banking-as-a-Service (BaaS) models that will define the 2030 landscape.
Emerging Technologies Reshaping Finance
The financial ecosystem of 2030 will be fundamentally transformed by several deeptech innovations that are already gaining momentum today.
AI-Driven Financial Intelligence
Artificial intelligence will evolve from today’s basic applications to become the cornerstone of financial services by 2030. The future includes “AI-powered co-pilots for financial insights” and “self-learning risk models via Quantum Computing”. This aligns with the IFTA 2024 theme of “AI-Driven Fintech: Shaping the Future of Finance,” which explores “how AI is revolutionizing the way we think about finance”.
India’s Digital Public Infrastructure Evolution
Lohar’s vision builds upon India’s impressive progress in creating robust digital public infrastructure for financial services.
DPI 2.0: The Foundation for Inclusive Finance
India’s Digital Public Infrastructure (DPI) will evolve into more sophisticated applications by 2030, building on current successes. Already, “UPI now power[s] nearly half of global real-time payment transactions” and has enabled innovations like “credit on UPI, cross-border payments, UPI circle”. The Account Aggregator framework has reached “over 100 million cumulative consents,” while the introduction of the Unified Lending Interface (ULI) represents “another transformative development, particularly for rural credit”.
From Infrastructure to AI-Powered Public Good
The evolution of India’s DPI will increasingly incorporate artificial intelligence, as evidenced by the year-end release of “MuleHunter by RBI Innovation Hub (AI-powered system to combat financial fraud) [which] represents a fascinating evolution in India’s DPI approach: using artificial intelligence to build public digital infrastructure”.
Regulatory and Governance Frameworks
The financial ecosystem of 2030 will require evolved regulatory approaches that balance innovation with stability.
Adaptive Regulatory Models
Lohar recognizes that emerging technologies must be accompanied by “robust regulatory frameworks to ensure responsible and secure implementation”. His Web3.0 trends report identifies “Regulatory Developments” and “Global Regulatory Frameworks” as key areas for the future, highlighting the importance of compliance without stifling innovation.
Cross-Industry Partnerships
The future of finance depends on collaboration between traditional financial institutions, fintechs, technology providers, and regulatory bodies. Lohar has advocated for “Open-Source Collaboration” and emphasized the importance of building ecosystems that connect various stakeholders.
The Integrated Vision for 2030
Prasanna Lohar’s vision for finance in 2030 integrates technological innovation with human-centered design and regulatory foresight. The financial ecosystem will evolve beyond traditional banking models toward “Banking without Banks” where institutions function as “trusted digital custodians”.
The transformation will be powered by quantum computing, blockchain, and artificial intelligence, enabling instant settlement, seamless cross-border transactions, and personalized financial services. This vision aligns with global “Vision 2030” initiatives but brings a uniquely Indian perspective shaped by the country’s success with digital public infrastructure.
By 2030, we can expect a financial system that is more inclusive, efficient, and responsive to human needs-one that leverages technology not as an end in itself, but as a means to create greater financial wellbeing for individuals and communities worldwide.
Perfios, India’s leading B2B SaaS Fintech company, partnered with PwC India to release a comprehensive report titled “How India Spends: A Deep Dive into Consumer Spending Behaviour.” The report examined the spending habits of over 30 lakh tech-savvy consumers across various demographics, shedding light on India’s evolving consumption patterns.
The study found that 39% of consumers’ total spending goes towards obligatory expenditures, with 32% being allocated to loan repayments. This highlights the significant role that credit plays in financing Indian consumers’ lifestyles and aspirations.
Additionally, the report revealed that 62% of discretionary spending is directed towards lifestyle purchases, indicating a growing emphasis on quality of life among Indian consumers. The study also found that income levels, digital payments, and changing lifestyles are key factors shaping India’s spending behaviour.
Overall, Perfios and PwC India’s collaboration has provided valuable insights into the financial habits and priorities of Indian consumers, offering businesses and policymakers a deeper understanding of the country’s evolving consumer landscape.
Traditionally, necessary and obligatory expenses have taken precedence over discretionary spending due to the importance of fulfilling essential needs and financial obligations. However, the emergence of various lending options such as embedded finance, peer-to-peer loans, credit cards, and traditional loans like home, education, and auto loans has transformed how individuals manage their finances.
As these lending alternatives become more accessible, the distinction between discretionary spending and future obligations has become less clear-cut. Nowadays, individuals are increasingly utilizing credit to finance lifestyle purchases and experiences that were once considered discretionary. This shift reflects the growing influence of credit in shaping consumer spending patterns and the evolving dynamics of personal finance in today’s society.
More than 62% of discretionary expenditures are allocated towards lifestyle purchases, which include shopping for fashion and personal care items.
Mihir Gandhi, Partner and Leader-Payments Transformation, PwC India added , “PwC India is pleased to collaborate with Perfios as the knowledge partner for this inaugural edition. This report is designed to help businesses, policymakers, and financial institutions understand evolving consumer behaviour and make informed decisions in a dynamic marketplace.
Sabyasachi Goswami, CEO, Perfios, stated that “India’s consumer market is undergoing a transformation which is fuelled by the rising middle class, expanding rural markets and a digitally connected, aspirational population. As we witness rapid shifts in consumer behaviour, understanding how India spends becomes essential for financial institutions, policymakers and businesses which are looking to engage effectively with this dynamic market.