DPI fueling innovation, startups and challenging incumbents: Nilekani

Business Standard



India’s digital public infrastructure (DPI) ecosystem is fuelling market innovation and value creation, accelerating the emergence of new startups and enabling them to challenge the incumbents, said Nandan Nilekani, co-founder of Infosys and who spearheaded the country’s massive unique identification project, on Thursday.


“Now clearly all the pieces are there. There is technology, the interfaces (DPI) and the venture money,” said Nilekani, during a fireside chat with Anil Kumar, CEO, Redseer Strategy Consultants, during the consulting firm’s ‘Ground Zero 9.0, Resilience in Action’ event here. “I think we’ll be seeing an acceleration of startups who use the various (DPI) infrastructures that we have to build (innovations).”


He said DPIs are becoming much more organised. Platforms such as Open Network for Digital Commerce (ONDC) are creating hackathons for companies to build innovations. Antler India, a leading early-start investment platform has created the country’s first ONDC-focused venture platform.


DPI refers to blocks or platforms such as digital identification, payment infrastructure, and data exchange solutions. These help countries deliver essential services to their people, empowering citizens and improving lives by enabling digital inclusion.


“For instance, Aadhaar does identity and UPI (Unified Payments Interface). Then you do it for the whole population and make it very inclusive and low cost to enable billions of transactions,” said Nilekani. “You open it up with interfaces so anyone can build applications on top of it.”


Aadhaar and UPI are already mature programmes now. UPI does 10 billion transactions per month. Today UPI is used by 350 million people and 50 million merchants. “The vegetable or the coconut vendor on the street is also using UPI,” said Nilekani. The fact that the platform is free and small transactions are widely done, one has been able to democratise digital payments across the country, beyond metros in small cities and towns.


“Jio is a great example. They said that ‘we want to create a mobile network for every Indian’ and dramatically cut costs, making voice (calls) free and data cheap. That is the real way to crack these big markets,” said Nilekani.


Many such new platforms are emerging, according to Nilekani. One of them is Open Network for Digital Commerce (ONDC) which is doing a few million transactions per month in the area of e-commerce and mobility.

 


“It will reconstruct e-commerce and mobility in this country,” said Nilekani.


There are other similar programmes. One of them is called AI4Bharat which works on developing open-source datasets, tools, models and applications for Indian languages. Also, the Bhashini programme aims to enable all Indians easy access to the Internet and digital services in their own language and increase the content in local languages. There is the Account Aggregator (AA) network, a financial data-sharing system that could revolutionise investing and credit, giving millions of consumers greater access and control over their financial records and expanding the potential pool of customers for lenders and fintech companies.


Back in 2009, Nilekani and his team played a key role in building digital identity (Aadhaar) which could be verified anywhere online. Today about 1.3 billion have it and they use it 80 million times a day for authentication for various tasks. The ID also led to the KYC (know your customer) process used to open a bank account or get a mobile connection. The Aadhaar eKYC (electronic know your customer) led to banking inclusion such as Pradhan Mantri Jan Dhan Yojana and telecom inclusion. “About 7-8 years later, every Indian had an ID, a mobile phone and a bank account. That laid the foundation for other things (services).”


Nilekani said that the private sector has been a huge beneficiary of these platforms. For example, eKYC allowed the rise of small and new banks and payment players as they could all do rapid customer acquisition with eKYC. In the telecom industry, it also led to the growth of various players including Reliance’s Jio which is now a huge company. Similarly, according to Nilekani, UPI enabled firms like PhonePe, Google Pay to use the payment rails. There has been an impact on the insurance sector as well. Digit Insurance, a company, uses all these rails and it now has a multi-billion dollar valuation.


“Essentially the companies that have used these rails (DPI) to accelerate customer acquisition and deliver services at scale and digitally and remotely, have all benefited greatly from it,” said Nilekani.



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