 "Vijay Shekhar Sharma")
A regulation-first approach will drive success for financial technology (fintech) companies in the country, and the sector would be a licence play in the future, said Vijay Shekhar Sharma, founder and CEO, Paytm.
He said that it is the responsibility of entities in the financial services domain to ensure safety of users through measures involving customer education.
“Regulation first is an obligation to achieve success as a fintech. It hinges on how (fintechs) play their role within the regulatory realm,” Sharma said.
He was speaking at the PMS Bazaar Alternative Summit in Mumbai.
His reiteration on regulatory focus comes nearly 10 months after the Reserve Bank of India (RBI) took action on One97 Communications (OCL) associate entity Paytm Payments Bank.
OCL is a Noida-based firm that operates brand Paytm.
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“There is a conflict if a fintech has more fin (finance) or tech (technology). Fintechs are either licensed or non-licensed. In my opinion, fintechs are going to be a licence play,” he added.
Sharma also said that artificial intelligence (AI) would democratise access to credit to the masses in the future.
“In five years, the chief risk officer of a bank will be an AI autopilot. While there will be a human chief risk officer, a significant amount of work will be done by the AI machine which will go beyond today’s credit models,” he added.
That said, Sharma elucidated that payments continue to remain as the basic component of financial services in the country that would drive inclusion and opportunities for companies to further tap into.
“Payments is the heartbeat of the financial system to identify if there is an entity that is a merchant or a business. Once that happens, then companies can either support them or participate in opportunity creation,” he said.
This comes as over 16.58 billion Unified Payments Interface (UPI) transactions worth Rs 23.5 trillion were recorded in October, the highest numbers for the digital system since it became operational in April 2016.
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