Why the world has much to learn from India's big digital leap

By Adhil Shetty

At #ChampionsOfChange, a recent Niti Aayog Initiative for 200 corporate CEOs to interact with the Government of India, Prime Minister Narendra Modi spoke eloquently about using technology to solve India’s challenges and driving the change we want to see in India. He cited the example of the Government e-Market (GeM), an online marketplace for government tenders that aims to curb corruption by bringing transparency to public procurement.

He described the role of Aadhaar in reducing leakage in government subsidy schemes.


As a financial services entrepreneur aiming to enable access to financial products for every Indian, I feel strongly that secure mobile Aadhaar-based technology combined with the upcoming privacy law will radically transform the financial services industry for the betterment of every Indian.

The Government of India, through the development of the Aadhaar-based financial access India Stack, has created the ecosystem in which financial institutions can offer consumers paperless access to all financial products on their mobile phones.

This world-class infrastructure will power innovation in financial services and financial inclusion for decades to come. This point of India having built what is arguably the most powerful framework globally to enable innovation in delivering services to Indian citizens has been best made by Infosys co-founder, & non executive chairman, and former UIDAI chairman Nandan Nilekani.

He described this phase as the Indian financial services sector’s ‘WhatsApp moment’, and his words were that “Banking as we know it will stand on its head in the next 10 years.” India Stack impacts all stakeholders in the financial industry starting from large banks, insurers, asset management companies, and FinTechs.

Built on the foundation of Aadhaar, this India Stack infrastructure includes e-Sign, e-KYC (Know Your Customer) via OTP (One Time Password), DigiLocker, Unified Payment Interface (UPI) and can also be extended to eNACH. This set of tools which allows one to authenticate identity, sign documents electronically, provide proof of age, and set up electronic EMI instructions is admired by many nations which recognise the power of India Stack to transform India when combined with mobile internet and paperless financial services.

The uniqueness of this Indian technology is that most developed countries do not have government-owned and managed secure infrastructure for instant identity verification, or electronically signing documents.

Per Harvard professor Kenneth Rogoff ’s comments in the media “the world has much to learn about from the Aadhaar project”. The world is looking to learn how India’s digital infrastructure has leapfrogged developed economies.

These services are securely made available based on strict access conditions for user authorised transactions when consumers apply for loans, insurance and savings. Using the above services you can get secure access in seconds to a health insurance, a mutual fund, a savings account, a fixed deposit or a loan without a single piece of paper.

This use of mobile technology for paperless financial access will drastically reduce operational costs associated with physical branches, paper document pick-up, manual processing, and ensure access to financial products for every Indian.

Thanks to this digital infrastructure, India will leapfrog the rest of the world in financial services delivery by ensuring that every citizen can access any financial product in minutes on their mobile phone —without paper, cash or physically signing documents. The government has enabled the infrastructure with tremendous foresight and an eye on financial inclusion and information security.

(The writer is CEO, BankBazaar.com)