India prime minister says financial tech needs to be a 'movement' — not a 'mechanism' 

  • Indian Prime Minister Narendra Modi said on Wednesday that development of financial technology, or fintech, should be a movement that can improve the lives of the world's most marginalized people.
  • Technology is defining competitiveness and power in the world and it is creating boundless opportunities to transform lives, he said at the Singapore FinTech Festival.
  • The Indian prime minister, along with Singapore Deputy Prime Minister Tharman Shanmugaratnam, formally launched an online marketplace that will connect technology start-ups and financial institutions in Asia and beyond.
Indian Prime Minister Narendra Modi.
Suhaimi Abdullah | Getty Images
Indian Prime Minister Narendra Modi.

Indian Prime Minister Narendra Modi said on Wednesday that the development of financial technology, or fintech, should be a movement that can improve the lives of the world's most marginalized people.

"We are in an age of a historic transition brought about by technology: From desktop to cloud, from internet to social media, from IT services to internet of things, we have come a long way in a short time," Modi said at the Singapore FinTech Festival on Wednesday morning.

Modi, who is in Singapore for the East Asian Summit and to meet leaders of the Association of Southeast Asian Nations, said history has shown that the financial industry is often the first to embrace new technologies and connectivity.

"There is daily disruption in businesses, the character of the global economy is changing — Technology is defining competitiveness and power in the world and it is creating boundless opportunities to transform lives," he said.

The Indian prime minister, along with Singapore Deputy Prime Minister Tharman Shanmugaratnam, formally launched on online marketplace that will connect technology start-ups and financial institutions in Asia and beyond. The platform — known as APIX, or API Exchange — was first announced in September.

One of its aims will be to drive financial inclusion across Asia Pacific, and to create a regulated space for financial institutions and fintech firms to collaborate and experiment on new technologies. It will be developed and operated by a global consortium led by technology company Virtusa.

The online marketplace will act like a bridge between the two sides, according to Varun Mittal, global emerging markets fintech lead at consultancy firm EY.

"This brings access to both sides. Financial institutions can get access to the best of technology. Technology institutions can get access to data and customers and financial institutions," Mittal told CNBC.

That makes it easy for companies to develop technologies around financial inclusion, micro savings and micro investments, he added.

Modi addressed the topic of financial inclusion in his address, citing the World Bank that previously said 1.7 billion adults around the world remain unbanked.

On Monday, the Monetary Authority of Singapore Managing Director Ravi Menon also talked about how large swathes of the global population lack access to bank accounts, secure and efficient means of payments and insurance protection. According to Menon, who spoke at the fintech festival, the the problem was two-fold: Banks face high costs to reach customers in remote areas while technology startups lack resources to expand into new markets.

"We must ... ensure that the pace and the push of fintech work to the advantage of the people, not to their disadvantage. That technology in finance ensures improvement of the human condition through direct contact with the most marginalized," Modi said.

That includes using technology to improve regulations, manage risks, make financial institutions and banks more resilient, tackle money laundering and other financial crimes, the prime minister said. The industry must also be prepared to answer inevitable questions that would arise around data ownership, privacy, consent, law and ethics.

For its part, India has pushed several policy initiatives to promote financial technologies in the country. They include the creation of bank accounts for the country's unserved and underserved population and the adoption of biometric identities.

"Fintech will need to be not merely a mechanism but a movement," Modi added.