Bank Future


From launching chatbots to connect with consumers and using blockchain for transactions to being one of the first banks to implement UPI for enabling digital payments, private sector YES Bank is betting big on the country’s fintech revolution.

Its MD and CEO, Rana Kapoor, in an interview with BusinessLine, spoke about the trends that will boost digital transactions in India and also the role of the bank in shaping the country’s fintech ecosystem. Excerpts:

What trends dominated the fintech space in India in 2017? And how is YES Bank helping in the digital transformation?

Tailwinds from demonetisation and the concerted push on a ‘less-cash’ economy increased adoption of digital solutions, at least in the payment space. For fintech, the development of open APIs (application program interface) and the gradual opening up of APIs by some banks has been a gamechanger, helping them bundle solutions better.

The growth trajectory of transactions using the UPI API, the volume of which has grown from 0.1 million in October 2016 to 77 million in October 2017, underlines the success of this digital push.

The government’s decision to reimburse the merchant discount rate to banks on digital transactions up to 2,000, should have a transformational impact, encouraging a large population of merchants who deal largely with petty cash for smaller transactions to move to digital payments. These efforts transform the entire digital payments value chain — consumer, service provider platform and the merchant.

The P2P and PPI guidelines were possibly the first set of material regulations affecting fintech, and we should expect more guidance in the coming year. Competition gave way to collaboration between fintech start-ups and corporates, as well as among fintech start-ups themselves. Accelerators like YES FINTECH (YES Bank’s fintech accelerator programme) have been instrumental in this, and in paving the way for commercialising solutions and scaling them in India and also globally. We have 16 partnerships globally.

This has also been the year of bringing the future to the present — blockchain, which used to be largely exploratory, is now seeing the development of actual use cases. Artificial intelligence (AI) and machine learning (ML) are also being implemented in critical banking use cases, moving beyond chatbots.

With so much happening, policy makers are beginning to focus on the development of an enabling ecosystem — the Maharashtra Government has taken the lead in this through the formation of a committee to chart the roadmap for establishing Mumbai as a fintech hub.

What factors played an important role in shaping up the segment this year? What are your plans?

The government has been working towards actualising the vision of Digital India. The JAM (Jan Dhan-Aadhaar-Mobile) trinity has helped the government drive inclusion, resulting in 300 million new accounts. Aadhaar identification is being increasingly utilised for developing and delivering more efficient banking solutions.


India Stack, built by the government and NPCI, provides APIs for authentication, digital payments and digital consent for data. In sum, the technology backbone has been built, the sector now needs a ‘Fintech Hub’ to help create future skills and jobs, growth capital, sustained demand and a supportive ecosystem.

What were the major challenges and how did the segment react to it?

While demand is strong and there is growing collaboration in the sector, developing deep-tech talent and skills for future jobs should be a priority. We have a strong science, technology, engineering and mathematics (STEM) and technology talent pool. However, concerted focus on future skilling is low. There have been some encouraging attempts towards this.

There is a need for more collaborative effort by academia and industry, with government support to invest in skilling our talent for the future.

What will shape fintech in 2018? Any innovation from YES Bank?

There is increased collaboration between banks and fintech start-ups through various innovative models, including the YES FINTECH Accelerator. Future technologies like blockchain and AI saw meaningful growth last year. With the growth of connected systems and the focus on smart cities, Internet of Things (IoT) should see significant progress in fintech. In fact, we are already working with an IoT-focused fintech as part of our YES FINTECH initiative. Fintech can also significantly impact the overall economy. Accoring to recent reports, fintech is poised to boost India’s $2.3-trillion GDP by $700 billion and generate 21 million new jobs by 2025. To tap this potential, we need concerted effort by the governments and industry to develop future-ready skills in educational institutions.

With efforts already ongoing, we can expect the creation of a Fintech Hub in Mumbai — with focus on deep tech future skills, technology, growth capital, sustained demand and enabling policies and regulations, among others. We should also get some direction from the regulator and policy makers on cryptocurrency and ICO (Initial Coin Offering), which are seeing increased global adoption; also advise on data security and protection, which are critical for adoption of open banking standards like PSD2.