Mumbai can be the gateway to fintech innovation out of India: Suniti Nanda, Mumbai Fintech Hub

Mumbai can be the gateway to fintech innovation out of India: Suniti Nanda, Mumbai Fintech Hub
Suniti Nanda, Fintech Officer, Government of Maharashtra

About two years ago, Maharashtra became the country’s first state to introduce a fintech policy to foster innovation in the nascent but growing sector. The state government set up a dedicated platform, Mumbai Fintech Hub, to execute on the mandate which involves working with stakeholders across the country and overseas to create access to markets, capital, talent and technology.

In December last year, the Mumbai Fintech Hub rolled out its ‘open accelerator programme’, a private and public partnership, which shortlisted 13 startups in its first cohort. Last month, it rolled out the FInD (Fintech Investments and Deals) programme, a platform to facilitate access to capital for fintech startups.

Mumbai Fintech Hub is spearheaded by Suniti Nanda, who took charge of the initiative as Fintech Officer, government of Maharashtra, in July last year. Nanda spent about 18 years in the corporate sector in diverse roles across companies such as Infosys and  Barclays before changing lanes to a career in the public sector. At Barclays, she was closely involved with the investment bank’s fintech innovation and accelerator programme Rise. 


In an interview with TechCircle, Nanda, an alumnus of the National Institute of Technology, Rourkela, and Indian Institute of Management, Calcutta, spoke about why she chose a second career in government, how the fintech policy has played out so far, the FInD programme and the Mumbai Fintech Hub’s open mandate principle. 

Edited excerpts:

What encouraged you to move from the private sector to the public sector?


Well, after spending 17-18 years in the private sector, I wanted to see what else I could do, where I could make a difference. India is going through a huge positive change in the journey of digital transformation and I wanted to explore what kind of role I could play in the larger scheme of things. Financial inclusion, in particular, has always been a special area of interest for me. When I was at Barclays, I was involved in setting up their innovation programme, Rise, and that was how I got into this ecosystem. When I left Barclays, this particular opportunity, the position for a fintech officer with the government of Maharashtra opened up. It looked interesting, I applied for the job, went through the process and that’s how I’m here!

It’s going to be nearly two years since the state government launched the fintech policy. What’s the report card on the progress on the ground?

I would say that we are pretty optimistic about the progress that we have made so far. The policy actually set the foundation and made the intent of the government very clear. We are here to foster the upliftment of the fintech sector. That was the single most important goal. We started out by asking one basic question -- can we make Mumbai a global fintech hub? Now, there is no prescription for that but we started to lay the foundation by identifying the problems that stood in the way of achieving that goal. In order to move the sector from Point A To Point B, we needed to know what was not happening right and start from there, maybe roll out a pilot along a specific theme, measure the results, undertake a course correction, if required, and move on from there.


We got off the ground with a fintech registry, an API sandbox and an accelerator programme, which incidentally is a multi-partner accelerator programme. There are now nearly 300 registrations on the fintech registry. These are the startups that we are watching closely. They become the first point of contact into the whole ecosystem. We consider everybody in the ecosystem a partner. The government is not in competition with any one. We have signed MoUs with several banks, fintech entities and three countries. There are many more in the pipeline. If you look at the accelerator cohort that we ran last year, it was a mix of startups from Maharashtra and other states. We believe in following an open mandate.

Why an open mandate?

Mumbai, as the country’s financial capital, has a natural leverage in terms of the fintech sector. We have been able to grow organically so far because of that leverage. However, it is also true that we are not a global fintech hub, yet. So, we need to see whether there is something else needed to stimulate inorganic growth and achieve that goal. 


When we started assessing what was missing, we came up with five factors or elements that needed a boost -- access to capital, ecosystem, open innovation, talent and market access. Now we could choose to focus on the 400-odd fintech startups within Mumbai and Maharashtra and try and address each of those five factors. But, then we would be missing out on the innovations being undertaken by the 1,600 other fintech startups across the country. If there is a startup solution sitting somewhere in Hyderabad or in Hubli, we could look at facilitating market access for that solution here in Mumbai. 

The principle is that if you succeed, I succeed. If we both succeed, then the country flourishes. Mumbai can become the gateway for fintech innovation taking place out of India. 

Among the five elements, how is the open innovation factor playing out?


Open innovation and ecosystem kind of go hand in hand. Under open innovation, the API sandbox is something that we are putting more focus on. We are in the process of  getting multiple financial institutions and fintech startups to open up their APIs. We are also working to get data-sets from different government departments into the API sandbox.

The RBI and markets regulator SEBI have also launched sandbox programmes. How is this sandbox different?

The RBI and SEBI sandbox frameworks are more process driven, not technology and data driven. For example, if video KYC is not allowed in the current scenario, as regulator I need to see that if this is a solution that you have created, you come to the sandbox and test the solution in a closed framework. In every solution, the test data will be different. RBI will ask which entities you will test with and those entities will present their data under RBI guidance and it will be tested. The outcome will feed into any kind of regulatory changes that might be done. That’s how a regulatory sandbox works. 


The sandbox we have is an open API fintech sandbox. The thought for us was cross-collaboration in this ecosystem between fintech and financial institutions. As part of the sandbox as a fintech, I can get access to APIs from 10 different financial institutions without knocking on their doors. That cuts down the time for testing. This is a test bed, not a production. The data is test data. With the outcome, a company can reach out to a bank, for instance, with the solution. It does not compete with the regulatory sandbox. It is a library of APIs. We have just started getting some traction on the sandbox and we have already onboarded Federal Bank. We have to be cognizant about the fact that it is data. There is also interest from other financial institutions.

Last month, you launched FInD, a platform to facilitate better access to capital for startups. What do you hope to achieve through this platform?

As a government agency, one of the things we started thinking about early on was how we could create a democratised platform to enable better access to capital. There are several startups that have raised funding. But there are several more who find it difficult to knock on the doors of investors. On the other side, there are many people have the money and want to invest but don’t know where to invest. We think we can we solve that problem through this platform. On the buy side, the platform will have the investor community, financial institutions and corporates, who are looking to either invest or build partnership with fintech startups. Either way, fintech startups benefit, whether in the form of capital or customers or strategic partners. The metric of success for us will be conversions and access to capital for these startups.

What kind of traction have you got on the platform so far? 

We have kept a target of having at least 300 startups on the platform for the first year with over 50 investors and over 10 strategic corporate partners. As of today, we have 45-plus investors who have signed up. It is a combination of angel, venture capital and private equity investors.  

What kind of processes do you follow to facilitate matchmaking on the platform?

We are not following a panel or committee approach to shortlist companies. The platform captures data using a solution built by mCrest that does the basic matchmaking for startups and investors. On top of that we have a partnership with PwC for further diligence. If a startup is matched with two or three investors, the company will be asked if it is willing to partner with either. This will be done through human intervention. 

In order to ensure that we get companies that are serious about fundraising, we have a fee as part of the registration process which depends on how much the startup is looking to raise. If a startup is looking to raise between Rs 50 lakh and Rs 1 crore, the fee would range between Rs 10,000 and Rs 25,000.

Tell us about your plans to launch sector-specific accelerators and leveraging specific frontier technologies to promote innovation in the fintech sector.

This year, we would be focusing on the insurance segment. In the last accelerator cohort we had a few insurance plays but it was more a mix of banking and insurance. In terms of frontier technologies, we strongly believe that blockchain and AI are two areas that can have widespread use cases in financial services. Then we also an accelerator in the works specifically from the government perspective. The use cases are a bit different when it comes to government and we want to be able to address those use cases. 

If there is data sitting in a particular government department and there is a problem statement out there, we could expose that data through the API sandbox and explore whether the accelerator can find solutions to those problems.

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