India has innovated extensively in digital public goods, and that has paved the way for the rapid rise of digitization in finance in India, probably faster than anywhere else in the world. UPI’s universality is on rise, and we are seeing UPI and RuPay make forays in UAE, Japan, the US, Singapore, Bhutan, Nepal, and recently in France. However, UPI and RuPay are only a part of the story. Digital public infrastructure and goods in India encompasses a great deal more.
After strong encouragement from the honourable finance minister in July, the adoption of Account Aggregator has picked up speed and achieved a landmark of 1 billion integrated bank accounts. This is now gold standard in terms of giving user ownership of their data and the control to use their data to access any digital services especially access to credit. This is a scaled and secure implementation of the future of putting the customer in charge of their own data.
DigiLocker has 128 million registered users, 400 e-document types, and up to 5 billion e-documents for consent-based sharing. The digital documents that can be stored on and retrieved from DigiLocker includes PAN card, driving license, Aadhaar card, school marksheets, insurance papers, among others. No other country provides a free service similar to DigiLocker to their citizens. The next stage of evolution we envision for DigiLocker to enable easier access to credit is the integration of EPFO passbook from Employee Provident Fund department, and Form 26AS TDS and e-PAN from Income Tax department.
CKYC registry hosts more than 35 crore KYC records, with inter-usability across all financial regulators — RBI, SEBI, IRDA, and the Pension Fund Regulatory and Development Authority (PFRDA). This enables customers to interact with various financial entities nationwide without the need to complete KYC formalities repeatedly. Moreover, with multiple identification parameters, such as the Aadhaar number, the PAN number, etc., interconnected through a single identifier, verification and risk mitigation also become much easier.
UIDAI has generated more than 1.2 billion Aadhaar cards that have been used for authentication over 53 billion times, making Aadhaar one of the largest identity databases in the world. When eKYC is done via OTP on the mobile phone, it reduces the need to manually collect and process copies of identity and address proofs, taking the redundancy out and making the process simpler and hassle-free.
Video KYC is an entirely paperless and presence-less KYC process that allows for Video-based Customer Identification Process (VCIP), Video-based In-Person Verification (VIPV), and Video-based identification Process (VBIP). Integrated with eSign and DigiLocker, the Video KYC platform becomes a complete verification solution. It allows financial institutions to authenticate customers’ identities at a fraction of the cost and time. It takes as little as three minutes to complete the video KYC. And, as it is done remotely, it takes away the need for travel to remote locations, documentation collection, and physical record maintenance. So an agent from a financial institution who is used to onboarding 3-5 people in one day, can very well onboard twice that number in an hour. This reduces the on-boarding time while also driving operational- and cost-efficiency. The approval for Video KYC could not have come at a better time than just before the pandemic hit India, as it enabled access to credit to people at a time when mobility was next to nothing.
The fintech sector in India has leveraged the existence of a strong digital public infrastructure and developed solutions based on these to enable faster and cost-effective access to financial products. This has played a pivotal role in increasing financial inclusion. Today, fintech is a major strategic opportunity for India. We are in a position to share our learnings with other countries, and the opportunities for exchange and collaboration in fintech are significantly higher.
(The writer is CEO, BankBazaar.com)