New Delhi: Financial technology and artificial intelligence (AI) will transform the financial ecosystem of India as well as other countries in the next few years, according to V. Vaidyanathan, founder and executive chairman, Capital First Ltd. Addressing industry executives at EmTech India 2018, the third edition of the conference on emerging technology and innovations in Gurgaon—organized by Mint and MIT Technology Review, Vaidyanathan said big companies across the world have understood the potential of AI and are investing heavily in it to provide better services to their customers. Capital First is a financial institution founded by Vaidyanathan. It specializes in providing debt financing to micro, small and medium enterprises (MSMEs) and individual consumers.
According to Vaidyanathan, economies of the world are at the cusp of a change and almost all the top global fintech companies have been set up in the last 10-15 years. These companies also have the potential to change the financial landscape in the future, he said. Capital First itself, under the guidance of Vaidyanathan, merged with IDFC Bank on 13 January. In India, a “new digital ecosystem" is opening up, which is enabling micro digital payments, said Vaidyanathan, who will now head the combine Capital First-IDFC Bank entity.
Vaidyanathan also pointed out that the unified payments interface (UPI) has grown around 10 times in the last six months. UPI is a payment system launched by the National Payments Corp. of India (NPCI) that facilitates instant fund transfer between two bank accounts on the mobile platform without having any details of the beneficiary’s bank. UPI was launched in August 2016 with 21 banks, and is currently being offered by about 86 banks.
Provisional data released by the Reserve Bank of India (RBI) on digital transactions for the month of February shows that transactions across UPI reached a new peak in February. The transaction volume was 171.2 million, up 13% from 151.7 million in the previous month.
Speaking about the “new ecosystem", Vaidyanathan said it is going to open up new markets and ensure viability of existing markets.