In a recent statement, Deputy Governor of the Reserve Bank of India (RBI), Mr. Michael Debabrata Patra, emphasized India's pivotal role in the ongoing digital revolution, particularly in the realm of financial technology (fintech). He underscored the remarkable growth of digital payments, highlighting that India’s digital economy now contributes to approximately 10% of the country’s Gross Domestic Product (GDP). According to Mr. Patra, this contribution is expected to rise to 20% by 2026, driven by advancements in financial technology, increasing digital adoption, and an expanding pool of skilled workers, particularly in artificial intelligence (AI).

India’s Digital Public Infrastructure (DPI) is central to this transformation. As Mr. Patra pointed out, India’s thriving information technology sector and a young, tech-savvy population position the country to continue to drive innovation in the digital space. The country’s large AI talent pool, one of the largest in the world, presents significant potential for AI-driven solutions that will further enhance digital financial services and streamline the growth of the digital economy.

The Deputy Governor outlined several ways in which digitalisation is transforming India’s financial sector. He pointed to surveys that reveal a substantial shift towards digital banking services. Today, 75% of Indian banks offer online account opening, digital Know Your Customer (KYC) services, and doorstep banking, making financial services more accessible to the masses. Moreover, 60% of banks have implemented digital lending solutions, and 50% provide payment aggregator services. Notably, 41% of banks have incorporated chatbots, further enhancing customer engagement and service efficiency.

The productivity gains from this digitalisation are striking. Mr. Patra noted that the move towards digital banking and financial services has led to a saving of 14,500 person-days monthly, a 25-30% reduction in customer acquisition costs, and a significant reduction in paper usage (by 84 tonnes), contributing to both cost efficiency and environmental sustainability.

Additionally, India's collaboration with international organizations has bolstered its global role in shaping the future of open finance frameworks. Notably, India is working with the G20 nations on initiatives like Project Nexus and mBridge to explore and establish global open finance standards. Under India’s G20 Presidency, the Global Digital Public Infrastructure Repository has been launched, which aims to share valuable digital transformation insights from the G20 member nations. This collaboration not only highlights India’s leadership in global digital finance but also serves as an example for other nations seeking to adopt similar digital infrastructure.

The RBI's focus remains on digital financial inclusion, ensuring that every citizen has access to safe, secure, and affordable financial services. The central bank is also prioritizing cybersecurity, customer protection, and sustainable finance as India’s digital economy continues to grow at an unprecedented rate.

Overall, India’s digital revolution is a comprehensive transformation that integrates fintech growth, AI innovation, and global collaboration. With a strong digital public infrastructure, India is well-positioned to unlock new growth opportunities, foster financial inclusion, and establish itself as a global leader in digital finance.

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