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'Addressing the Basics'

Saturday, March 25, 2017

Vinod Keni, Board Member TiE Mumbai and Chairperson of the Fintech SIG

While forums like TiE have a broad-based agenda for the start-up ecosystem, TiE Mumbai’s structured approach of creating vertical-specific SIGs bodes well for all stakeholders. Vinod Keni, Board Member TiE Mumbai and Chairperson of the Fintech SIG, spoke to Dominic Rebello, on the sidelines of TiEcon 2022 held recently in Mumbai, spelling out what needs to be done to better the start-up ecosystem

Vertical specific SIGs at TiE Mumbai have been formed with a specific intent of improving and providing better knowledge-backed support to the start-up ecosystem. As the chairperson of the Fintech SIG please elaborate on its role.

We decided to start the Fintech SIG from here in Mumbai considering that Mumbai is the financial capital of India. Regulators, bankers, large financial institutions and every possible stakeholder that you can think of in the financial space is either headquartered at or has a sizeable presence out of Mumbai. That gives you access to a lot of domain experts; a quintessential for the start-up ecosystem today.

The Fintech SIG has been created specifically and essentially to work with startups and when I say start-ups it is not only start-ups but also early-stage companies. These could be Fintech’s or companies which are working within the financial services space and who are not only looking for market access but also access help from the regulatory system. They also include companies looking out for domain experts who they can actually work with or those who can advise them and perhaps help them access capital. All of these are core areas around which the Fintech SIG will work.

How will this help investors in the start-up space?
This will certainly help investors, because they are always looking out for good quality deals. The idea is that if I get a quality entrepreneur who has been supported and mentored by the Fintech SIG, then I can essentially go ahead and sell that idea or source it to a potential investors and the investor will also look at them far more seriously.

You mentioned about help in access to the regulatory system. Please detail on that part.
Unlike other industries, Fintech (and within that financial services) is a highly regulated one. Fintech has to work within the gamut of the regulatory system which is right there. The regulatory system at this point in some areas is opaque, in some areas is outdated and in some areas there is no regulation at all. This means it is pretty much wide open. In such a situation, what we want to do is, to work with the industry as well as with the regulators and try to make sure that there is an understanding of the need that the Industry as well as the regulator has and align both these.

Can you give an example of what you just stated above?
When I say alignment with the regulators it means aligning with various bodies like the RBI or the Ministries or for that matter the Institute of Chartered Accountants of India as well. Take the example of certain accounting rules in the Fintech space. If the rule changes from the Institute of Chartered Accountants of India, then the Ministry of Corporate Affairs will have to make some changes. These are the things which can actually drive transparency in rules. Some rules can be updated in case there is a need to get them updated or some new rule can come in place if there is no rule in place. We at the SIG are looking at facilitating such kinds of conversations between the industry and the regulators. The industry can then go back to the regulators and spell out their challenges and when the regulator hears it from a larger group of people it will have a larger credence.

What happens next? What is the next step?
The next step is that we will now start identifying and engaging with startups. We have started inviting them and having conversations with them around this. For example, I have had this conversation with a startup about problems in working capital management because of some accounting rules. So the next step naturally is to bring more of startups and entrepreneur on board and essentially start engaging with them on a regular basis.

What is your immediate plan for this?
In the next 90 days we want to essentially try and bring as many startups, entrepreneurs and financial services companies that have an interest in any part of this Fintech ecosystem and start engaging with them on a proactive basis. When I say proactive, it means everything including regulatory access, market access and access to domain expertise.

We want to start doing this on a much regular basis and based on that, we will put an agenda out. For the next 120 days, our agenda is to talk about regulatory issues that need to be addressed whether it is with the RBI or SEBI or the Institute of Chartered Accountants whoever it could be.

We want to identify the broader issues and within those we will then set our priorities based on importance of the issues to be addressed.

Have you identified any startups?
There are quite a few that we have identified and with whom we are engaging right now which include names like Liquidex, Flexiloans, Creditwatch, Arthayantra and some more.

Did you have necessary domain expertise at your end?
We have to appoint domain experts from legal perspective and from regulatory and accounting perspective as well. What we will do is we will take research papers and issues to the likes of a KPMG or PWC and prepare a summary and then share it with the institute saying that these are the issues the industry or members are facing. The important thing is that we are looking for best interest of the Fintech companies and for them able to operate efficiently. There is no vested agenda for us in all this. It is all in the interest of the start-up ecosystem. A lot of thought has gone into what needs to be done and now is the time to operationalize it.

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