The India-Brazil Fintech Conference, organized by Niti Aayog, Embassy of Brazil and the Consulate General of Brazil, was held on the 23rd of April in Mumbai. The conference saw an influx of Government organisations including key regulators, fintechs and banks from across Brazil and India. With the Indian investment growing in Brazil, the niche markets of the Brazilian Fintech ecosystem have reported a marked increase in their scalability efforts. The conference aimed to leverage the similarities in opportunities and challenges faced by fintechs from both the geographies. The crux of the event being, minimising the hurdles for a thriving fintech ecosystem such as access to the top-level technological system, availability of data and compliance to regulatory standards. It brought together Indian and Brazilian business leaders for exploring opportunities for cooperation and partnerships.

The article provides the key highlights from the contributions and presentations from government officials, startups, investors, academics and incubator managers. It also presents excerpts from thematic panels addressing topics such as innovation programs,  emerging technologies, regulatory environments, investment markets and financial inclusion.

With 60% of retail credit to be digitized in the next 10 years, BankBazaar CEO Adhil Shetty believes that the future of the financial services sector is paperless. Government’s initiatives such as the e-sign, digilocker, e-KYC aim to further encourage the fintechs adopting the digital ecosystem. With increasing consumer preference for digital services, owing to their affordability and the efficiency, Adhil Shetty is of the opinion that the driving growth behind the success of the digital platform is the consumer adoption rather than the fintechs.

The Brazilian fintech sector is expanding with the number of fintechs grown to 404 from 332 in the last 9 months. Ingrid Barth, Director of the Brazilian Association of Fintechs- Abfintechs provided a glimpse into the Brazilian fintech sector whilst discussing the banking concentration, growing technological penetration, limiting regulatory agenda and the financial verticals of the industry leaning towards payments and followed by credits, lending, debt negotiations. Aparajit Bhandarkar, CEO of Varanium Capital, provided a glimpse into the Indian fintech sector. With a total of 18 unicorns generated, 8 in 2018 itself, Indian fintech ecosystem has grown exponentially. The JAM Trinity- Jan Dhan Yojna, Aadhar and Mobile Penetration that has immensely benefited the Indian fintechs. The session provided a look into the funds raised by respective system scopes with Lending amounting to INR 7ooo crores in the last year followed by Payments (INR 6800 crores).

The first panel of the event aimed to provide insights into the fintech hotbed i.e. Maharashtra, along with the driving forces behind India’s fintech innovation. The panel aimed to compare the oligopolistic banking system in Brazil as compared to its Indian counterpart. The discussion brought about surprising statistics regarding the amount of unbanked population in both of the countries (191 million in India and 50 million in Brazil). Sahil Kini, CEO & Co-Founder at Setu, explained the need for financial inclusion in Brazil suggesting a cut down on the high transaction fees and enabling company access by increasing the capital velocity. Gaurav Singhal, the Fintech incubation manager working for the Government of Maharashtra, described the fintech ecosystem in Maharashtra with problems faced by early-stage startups such as high cost of setting up, saturation in 2 metro cities namely Mumbai and Bangalore and many more. The panel brought about various initiatives like the Draft Data Protection Bill, business opportunities and innovations adopted in the Indian and Brazilian fintech sector.

Panel 2 focused on the micro-credit organisations, venture capitals and accelerator programs that aim at inclusive growth in their respective geographies. The panel saw ZestMoney Co-Founder Priya Sharma talk about the micro-credit company’s aim to enabling consumers for online shopping while leaving the payment for it in instalments and the need for people to adopt the technology. The low GDP per capita coupled with pockets of extreme wealth has created an unstable lending pattern amongst the Indian population as the amount of lending depends on the borrower’s income level. The panel had a mixture of fintech accelerators and ventures such as Darwin Startups and Mindset Ventures which pointed out the increase in Brazilian fintech venture investments. (The current investment standing around $1.5 billion).

Panel 3 focused on financial instruments such as RegTech, AI, Blockchain and cryptocurrency’s role in the fintech sector transformation. The panel saw a debate on the utility of blockchain as opposed to cryptocurrency in the current market scenario. Ingrid Barth took the audience through the opportunities and challenges of the blockchain implementation faced by the Brazilian fintechs. Mr Luiz Macedo, the founder of Allgoo, an AI-based B2B fintech, discussed the role of the company’s AI offering helping them devise genetic algorithms and optimize portfolios etc. Allgoo is one of the only fintechs that leverages AI to the investment industry, providing the investment advisors with open APIs and robo-advisors. Jitendra Gupta, MD of PayU, a financial services provider, talked about customer onboarding being the biggest “pain-point” which has been resolved by the Aadhar KYC system. Nearly 2 million transactions were recorded with the Shop Now Pay Later scheme which is just another form of micro-credit. Rahul Sanghi, Koinex’s Business Lead talked about data privacy and authenticity in a cryptocurrency transaction and the challenges faced post the RBI ban on cryptocurrency in India.

Panel 4 aimed at discussing the fintech policy backbone with payments, testing & incubation, cybersecurity, tech-risk taking the high horse. India saw a staggering 800 million UPI transactions in the last month. Arif  Khan, CDO, National Payments Corporation of India(NPCI), talked about the technological innovations in the fintech industry along with the regulations that follow. For A.G. Ramakrishna, InstaRem’s Country Manager, regulations form a large part as the cross border remittance company largely involves consumers leveraging Forex. The panel also included Mr Ewerton Santos, TrackCash CEO discussing the challenges faced by his Brazilian financial conciliation platform including multiple sales channels, ever rising sandbox etc.

This marked the beginning of a fintech collaboration between two dynamic geographies i.e. India and Brazil. The conference aimed to point out ways in which fintechs of both economies can leverage technology, human resources and ideas for the development of a better fintech ecosystem.

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by Megha Bhattacharya
Market Analyst at IBS Intelligence
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