The India-UK Financial Partnership (IUKFP) sets out how the two nations can accelerate and enhance collaboration on fintech and innovation to boost respective sector growth.
A newly-released report from the IUKFP, the forum for financial services cooperation between India and the UK, outlines a collaborative approach to powering fintech innovation and includes a series of recommendations for the Indian and UK governments and regulators.
The report, ‘Harnessing the power of fintech and data’, which has been released today, makes clear the opportunities for the UK to collaborate with India as a priority partner to implement the recommendations of the FinTech Review led by Sir Ron Kalifa.
This includes learning from each other’s successes, and also how to further strengthen the two countries’ respective fintech ecosystems and contribute to the shared agendas of financial inclusion and levelling-up.
The IUKFP recommendations are focused on policymakers and regulatory authorities in each country:
IUKFP: On the UK side
The report’s first recommendation for UK authorities is to launch an international fintech credentials portfolio and an international fintech portal for inbound investment from India through pilot programmes, making India the priority partner for the UK in building alignment with developing markets.
Secondly, it suggests securing access to global talent through launching a UK-India mobility partnership with a fintech lens.
Additionally, the report recommends implementing a coalition on digital ID. This would bring together various stakeholders and explore how India’s Aadhar digital identity scheme can be extended to the UK; learning from India’s experience with payment systems.
Lastly, it advocated developing the UK as a complementary source of capital for Indian fintech firms and unicorns that are thinking of going public.
IUKFP: On the India side
On the other side, the report recommends that India leverage the India Stack. This includes considering how access to the new account aggregator framework, which allows data to be shared among several parties, could be broadened to more domestic and international firms and promote innovation.
Secondly, it also suggests inter-operability and bank switching so that India can learn from the UK’s experience with open banking.
In this, the report also cites a keen interest in the cross-border applications of central bank digital currencies (CBDCs) and the role of CBDCs in enhancing payment systems.
According to the report’s third recommendation, India should pioneer the development of fintech platforms for SME financing, which would help encourage cross-border trade and capital flows between India and the UK.
Lastly and perhaps most importantly, the nation should seek to enhance the fintech ecosystem with cybersecurity and data protection, allying India and UK data-sharing regimes to share best practices and establishing mechanisms for specialist firms from both countries to learn and develop bilaterally.
The coming together of two ‘world-leading fintech centres’
Reflecting on the report, Bill Winters, group chief executive of Standard Chartered and the UK chair of the IUKFP, identifies the UK and India as two “world-leading fintech centres,” making “natural partners on financial innovation.”
“There is much for us to learn from our respective successes and much to gain from our respective potential,” continues Winters. “We believe that if adopted, the recommendations set out in this report – which have been developed by businesses across the UK and India – will help to deepen and strengthen our collaboration and opportunities for growth in the future.”
Uday Kotak, MD and CEO of Kotak Mahindra Bank Ltd and the India chair of the IUKFP, adds “India and the UK have a long-standing economic relationship, with the UK being one of India’s top trading partners.
“Both countries also have world-class fintech ecosystems, making them natural partners in financial innovation.
“The UK can learn from India’s successful experience in payment systems whereas for Indian fintech firms and unicorns, the UK could be a good source for both growth capital and emerging technology pool.
“The recommendations presented in this report can further enhance the fintech ecosystem, benefitting financial inclusion and the creation of new benchmarks across the globe,” concludes Kotak.
The IUKFP Fintech Working Group, which authored the ‘Harnessing the power of fintech and data’ report, is co-chaired by Sherry Madera and Professor Tarun Ramadorai. The group is grateful to Sir Ron Kalifa for his guidance on the UK recommendations.