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Digital Disruption and Its Indicators

By Sandeep Deb Varman, Associate Account Director, 20:20 MSL

KPMG recently came out with a study highlighting innovation and tech hubs around the world, apart from Silicon Valley. The top ten cities have all the usual suspects — from Tokyo to Tel Aviv to Shanghai and back to Boston.

What’s interesting is the country-wise findings. China, for a while, has been blazing a trail when it comes to innovation. The pace and breadth of innovation has been so good, its 13th five year plan has a special focus on policy development and enforcement to foster innovation over the period between 2016–2020. The interesting part is that China’s fintech companies have done such a good job, they have brought in reform to the sector.

Which brings us to India.

The government’s focus on Skill India, Digital India, Make in India bodes well from a policy standpoint. If you chart India’s private history of innovation, it goes back to the 90’s with the services sector boom that led well into late 00’s. This was followed by the startup boom with e-commerce leading the way. Fast forward to today, a company with an ambition to become a 100 billion dollar company has its roots in fintech. There’s really the perfect storm happening in the financial sector in 2017. India’s just come out of one of its biggest ever cyber security intrusions with the debit card hack in 2016. Following the demonetization announcement, more transactions have moved online. And finally, the government has even set up a separate body to look into cyber crime in the financial sector. And by 31st March 2019, our banks are set to complete their transition to Basel III norms.

Image source: Flickr

Image source: Flickr

Like China, we have an opportunity here unlike the past with e-commerce. The model of e-commerce currently dominating the country functions more like a partner rebate program — more incentives for users if they buy from a particular vendor on a particular day. That’s given users choice and also e-commerce companies the clear indicator that without rebates in some form or the other, there’s little brand loyalty to a particular platform.

Fintech doesn’t necessarily have to suffer the same fate. Bank customers are likely to stick with the same bank and payment platform once their accounts are linked. There’s little need to constantly switch payment gateways if you’re comfortable with one; especially if you’ve linked your debit/credit cards to that gateway. In effect, this is a more stable model — not relying on hard incentives like cash back but on softer ones — connectivity regardless of where you are, better security measures to ensure your transactions are secure regardless of whether you’re on your home network or using a public wi-fi hotspot.

The government has a more sustainable and reliable business model to deal with. What the sector needs now is the right policy push to ensure that users and businesses are protected.

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Sandeep is an account lead on a mix of B2B and B2C clients at 20:20 MSL. He is a subject matter expert on startups & B2B communication strategy.
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