Call to bolster UK-India fintech ties

Proposals to strengthen fintech collaboration between India and the UK have been laid out in a report from the trade group representing the sector in both countries.

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David Sapsted

20 April 2023

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The proposals, which were submitted to ministers and regulatory bodies in London and New Delhi this week by the India-UK Financial Partnership (IUKFP), come just days before the latest round of negotiations over a hoped-for UK-India free trade agreement get underway.

Strengthening fintech ties between India and the UK

According to the industry's UK trade body, TheCityUK, recommendations in the report, 'Harnessing the Power of Fintech and Data', would enable the sector "to further strengthen the two countries’ respective fintech ecosystems and contribute to the shared agendas of financial inclusion and levelling-up".One of the demands in the report is for the UK government to secure access to global talent by establishing a UK-India mobility partnership with a focus on fintech.Uday Kotak, managing director of Kotak Mahindra Bank and India chair of the IUKFP, emphasised the long-standing economic relationship between his nation and the UK."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," he said."The recommendations presented in this report can further enhance the fintech ecosystem, benefiting financial inclusion and the creation of new benchmarks across the globe.”Bill Winters, group chief executive at Standard Chartered and UK chair of the IUKFP, described the UK and India as "natural partners" in financial innovation.He added: "There is much for us to learn from our respective successes and much to gain from our respective potential. 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.”

Recommendations in the report

For the UK:

Launching 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.
Implementing a coalition on digital ID, bringing together various stakeholders, looking at how India’s world-class Aadhar digital identity scheme can be extended to the UK and learning from India’s experience on payment systems.
Developing the UK as a complementary source of capital for Indian fintech firms and unicorns that are thinking of going public.

For India:

Leveraging the India Stack: 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.
Inter-operability and bank switching: how India can learn from the UK’s experience with open banking.
The development of fintech platforms for SME financing, which would help encourage cross-border trade and capital flows between India and the UK.
Enhancing 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.