New ways for Fintech should be found to onboard customers by the Government through Aadhaar based e-KYC   

What exactly happened?

A spectacular rise has been witnessed in the Indian Fintech Industry in the past few years. Indian Fintech Ecosystem, According to NASSCOM may register a 22% growth CAGR over the coming five years. Infact the transaction figure might also touch the figure of $73 billion by 2020. Our economy can have a far-reaching consequence with this whole impact of Fintech Boom. A contribution of $700 billion to our nations GDP by 2025, and that’s not all, another pivotal role can also be played in curbing the monetary leakages during the subsidy disbursement process leading to billions in savings. Hence, some pressing issues which the Government should resolve arises as the budget 2019 lurks around the corner. 

Initiating Processes and creating intellectual property infrastructure
An offline business which is being pushed online is known to be the Fintech Industry. However, the customers who are being targeted are used to the offline model. Hence, if adoption is bolstered, one needs to incentivize online behaviour in the form of cash incentives being doled from the government on the lines that are quite like the direct transfer benefit system devised for the GST. Similarly, the existing IP laws here, are inadequate and the government must step forward to initiate effective safeguards to protect the business from piracy and cloning of established business names.

Encouraging insurance protection 
In India every year about 62 percent of personal medical expenses are fulfilled through personal means. Nevertheless, about 40 million Indian households fall into a debt trap annually as their medical expenses exceed their household income. However, to initiate a shift towards the much-required insurance culture, the industry should be given some concessions that go beyond the regular tax-breaks.

Simplified tax regime
The draconian angel tax, which is detrimental to the investment climate have affected the Indian entrepreneurs in the tech start-up space. Last year, almost 80 start-ups were slapped with Income Tax notices and all were related to angel tax alone. These notices just didn’t take a toll on their finances, but also adversely impacted their ability to focus on what they should be focusing on: building their business. Although intentions of the regulators to address the issue at hand were at its best, yet progress has not been made.

Use of Aadhaar based e-KYC for simplifying consumer onboarding
There’s a hope in the Fintech ecosystem that the government will come to its rescue with the introduction some legal provision, which skirts the 2018 apex court verdict prohibiting verification of consumer using the Aadhar route. The order has limited the ability of FinTechs to facilitate instant customer onboarding. Also, customer acquisition’s cost will also increase if physical verification is mandated. The eventual cost burden will also affect the fintechs bottom-line adversely as they operate on wafer-thin margins.