Everybody’s Doing It.
The State Bank of India (SBI) is the most recent government controlled financial entity that is embracing the Fintech rush. According to multiple reports, India’s largest bank has created a $30 million fund to help startups in the financial sector. The fund was revealed last week at an event in Mumbai where the Chairman of the State Bank of India, Arundhati Bhattacharya stated;
“This fund shall consider assistance of up to Rs 3 crore to an Indian registered company for promoting their business innovations using IT in India for banking and related technology …It is not only the Fintechs that are coming into banking, but banking can also benefit from Fintech… There may be one or two areas where they can give us competition, but overall, there could be several areas where they can help cross-sell banks’ products.”
The State Bank of India is a government owned enterprise. SBI joins a growing list of government operated entities that are embracing Fintech – not fighting it.
While the concept innovation in the governmental sector is a bit oxymoronic Fintech innovation is driven not just by a need to foster cool startups but also by profound need to stay ahead of the wave of disruption. There is also the small fact that fostering competition between established financial firms and entrepreneurs is probably good for consumers too – an important objective for any elected government. Some countries have followed the UK in creating regulatory Sandboxes to clear the path for early stage Fintech so they don’t get squashed by over-zealous regulators along the way.
The one country that has been rather timid in embracing Fintech. The United States. Of course, there is still some time for the Yankees to catch up.