The untapped potential of fintech (financial technology) in helping deepen trade relations between the UK and India is to be investigated in a new project co-led by the University of Essex.
The three-year project brings together leading research institutions, government organisations and fintech firms from both countries to assess the role of fintech in expanding bilateral trade between the UK and India.
It is one of four projects supported by the Economic and Social Research Council (ESRC) and the Indian Council of Social Science Research (ICSSR) under their joint call for collaborative research on the future of UK-India trade and cross-border investment in a changing global environment, as stated in the India-UK Economic and Financial Dialogue (EFD).
Professor Thankom Arun, Director of the Centre for Accountability and Global Development (CAGD) at Essex Business School and leading the UK side of the project, said: “Fintech provides enormous opportunities for the development of financial markets and economic growth.
“This project aims to contribute to the ongoing India-UK Economic and Financial Dialogue (EFD) by contributing to the development of the fintech sector and fintech-enabled services and trade between India and the UK. This project has enormous potential to deepening both countries’ bilateral partnership.”
The partnership will assess current regulatory, policy and investment practices and identify what changes could be made to increase the quantity and benefits of fintech trade between the two countries. It will also establish the factors specific to fintech start-ups that influence their ability and appetite to promote trade between the two countries and globally.
Professor Arun added: “The project follows a problem-driven and solution-focused approach through innovative integration of ideas from stakeholders to enhance the bilateral trade between the two countries.
“The aim is for companies in both countries to exchange knowledge which will enhance trade between India and the UK enormously, benefitting consumers, businesses and governments in both countries. Given the thriving state of the domestic fintech industries in both countries, but low levels of trade in fintech and fintech-enabled services, enhancing trade in this area is a promising avenue for strengthening bilateral cooperation between the two countries.”
A joint statement by the Chancellor of the Exchequer and the Finance Minister of India at the 10th India-UK EFD in October last year acknowledged the strong and growing India-UK economic relations, as two of the world’s top seven economies with a combined GDP of over $5trillion. India-UK trade has more than doubled since the first EFD in 2007, with bilateral investment supporting over half a million jobs across the two countries.
Professor Sachin Chaturvedi, Director General at the Research and Information System for Developing Countries (RIS), in New Delhi, and leader of the Indian side of the project said: “With growing heft in technological competence in fintech and fintech-enabled services, the study will yield useful policy insights on development partnership. Besides strengthening bilateral relations between India and UK, the accumulated knowledge can be scaled up to share the development experience with fellow developing countries in Africa and Pacific Island economies.”
The other key partners are:
• Professor Victor Murinde, Director, Centre for Global Finance, SOAS, said: “This project is timely and addresses issues which are pivotal to the fintech revolution. We aim to generate new evidence that will directly inform policies and strategies for enhancing bilateral trade in fintech and fintech-enabled services between the UK and India.”
• Professor Sheri Markose, from Essex’s Department of Economics, said: “We are excited to be part of this project that will accelerate the collaboration between the UK and India with the Economic and Financial Dialogue (EFD). New initiatives include fintech/silicon ecologies incubating UK-India firms for innovative financial services; funding conduits for infrastructure and green finance; regulatory frameworks to ease market access for UK-India fintech firms.”
• Professor K J Joseph, Director of the Gulati Institute of Finance and Taxation (GIFT) said: “The core questions of the project are closer to the interest of GIFT and we are happy to be part of this path-breaking study to promote the development of fintech market in both countries.”
• Dr Philip Kostov, from the School of Business at the University of Central Lancashire, said: “This project builds upon the leading role of services in UK trade and India’s emerging new financial architecture. These provide fertile ground for financial innovation witnessed by the growth of the fintech sector in both countries.”
• Dr Priyadarshi Dash, of the Research and Information System for Developing Countries (RIS) in New Delhi, said: “Fintech and associated services are important emerging sectors for deepening India-UK economic relations with immense untapped potential for trade and investment. Besides promoting bilateral business in financial services, the project would contribute significantly to the cause of inclusive development addressing financial inclusion, digital empowerment and start-up ecosystem.”
• Dr Reji Joseph, of the Institute for Studies in Industrial Development in New Delhi, said: "Fintech is one of the focus areas of economic cooperation between India and the UK and both countries have globally leading start-up ecosystems. This study aims to capture the potential of fintech start-up ecosystems in both countries in promoting bilateral trade in services and the regulatory issues that affect their growth and contribution."