The National Institution for Transforming India (NITI Aayog) in association with a private digital payments provider announced that the two will be hosting the first-ever open-to-all hackathon to showcase path-breaking solutions for the fintech ecosystem. The hackathon will provide an opportunity for innovators, digital creators, and developers from all over India to ideate and code. Participants at the hackathon need to use any open-data APIs along with frameworks such as Account Aggregator (AA) as a foundation to power their submissions. AA is a type of Reserve Bank of India (RBI)-regulated entity that helps an individual securely and digitally access and shares information from one financial institution they have an account with to any other regulated financial institution in the AA network. Data cannot be shared without the consent of the individual. According to reports, the final app that participants come up with must incorporate one of the following:
- Alternate risk models for lending, insurance, or investments, focusing on financial inclusion.
- Innovative products that use the power data signals for various demographics and locations for the broader adoption of financial services.
- Improved visualisation and derived intelligence based on digital payments data.
Participating teams can have one or up to five participants. By the end of the event, participants will be required to present a working prototype of their hack to the judges, after which each hack will be judged based on certain parameters. When the judges evaluate the hacks, they might ask for additional information on the prototypes. The winning team will be awarded IN₹150,000 (US$2,010). The last date to register for the event is 23 February and the deadline to submit the final entries is 25 February.
The overall size of the Indian financial services sector in 2021 is estimated at US$500 billion, of which, the fintech market comprises US$31 billion, according to a recent report. In the next five years, the sector is expected to grow with a compound annual growth rate of 22%, and it currently stands as the third-largest fintech ecosystem in the world, behind the United States and China.
Earlier this month, RBI set up a department to help create regulations for the fintech sector and its upcoming central bank digital currency (CBDC). As reported by OpenGov Asia, it will facilitate innovation and identify and address challenges and opportunities in the field. The bank explained that the erstwhile fintech division under the Department of Payment and Settlement Systems (DPPS) has been subsumed into it.
The agency will deal with matters related to inter-regulatory and international coordination on fintech. It will report to the RBI’s centralised administration division. Further, the department will provide a framework for research in the field that can aid policy interventions. It will also address matters related to the facilitation of constructive innovations and incubations in the fintech sector if they have wider implications for the financial sector/markets and fall under the purview of the bank. The department is expected to address new-age challenges that arise from fintech applications, and crypto is a part of its brief.
