Our guest for this #FintechInterview is Sandeep Laxman, Head of FinTech Business Development at Amazon Web Services (AWS) in India.
Hello, Sandeep. Thank you so much for being here. We are excited to have a chat with you about AWS, one of the biggest Tech giants in the world, now leading the change in the global fintech ecosystem. First of all, could you tell us about your career path? Why did you decide to work for a Big Tech?
I got my bachelor from the Indian Institute of Technology, Delhi, one of the most prestigious engineering colleges in India. During my undergrad, I moved abroad for an exchange program at INSA university in Lyon, France. When I came back, I joined PwC where I collaborated in the team responsible for the first regulator-mandated audits of the Indian Stock Exchange. Subsequently, I co-founded a start-up in the education space, which I exited in 2016 to start a journey at Amazon Web Services (AWS), the cloud computing division of Amazon. AWS is different from Amazon: it operates as an independent company. There, I joined the start-up team to lead venture capital development in West India.
At that time, I noticed a big gap in the fintech sector: most people did not know what it was, nor how big it was. Therefore, I wrote a paper for Amazon describing the size of the fintech ecosystem and how we could have approached it. A year later, I started working with the AWS teams on the fintech business development in India. Lastly, in 2020, I have been called in to work on the strategy for fintech development in Asia, the Pacific Area and Japan.
Currently, what are the main features and trends of the fintech ecosystem in India?
In a nutshell, India is going through a disruptive change in financial services. This started a few years ago with the National Payments Corporation of India (NPCI), which brought all the banks together to build a system that enabled instant bank-to-bank transfers. They called this system UPI, United Payment Interface, and unlike credit cards, where payments come in from 30 to 45 days later, UPI enables instant settlement. From a financial perspective, payment is the backbone of all transactions: without payment you cannot buy insurance, buy a house, you cannot send people money and you cannot invest in capital markets. Essentially, UPI is the main reason for the strong growth of fintech in the country.
To access digital payments, users get a public UPI Handle (a unique identifier for your account), which they can use to exchange money through various apps including Amazon Pay, Google Pay or Paytm. To use UPI, you don’t need a smartphone: a feature phone is enough. UPI was built with the objective of serving the big share of people in India that is not digitized yet. This boosted the growth of digital payments in the country. Just in October, there were about 4.2bln transactions in India on the UPI network. Moreover, UPI’s technology has many applications. For example, during the pandemic, financial services companies, such as Zerodha (one of India’s largest brokers), used AI-backed identity confirmation, developed to authenticate mobile money transfers, to onboard new customers despite the ongoing pandemic restrictions.
Recently, NPCI and MAS (Monetary Authority of Singapore) have formed an agreement to merge India’s UPI with Singapore’s NETs (Network of Electronic Transfers). We can observe similar attempts of interconnecting payment systems across countries.
What opportunities is AWS chasing in India? What are its goals and the threats it is facing?
AWS enables fintech companies to create and develop their products more easily. There are massive amounts of regulations which make launching a new product more difficult in financial services than other industries. Security and compliance are crucial because dealing with money requires trust between consumers and firms. AWS helps founders who want to disrupt markets. Before a firm can create an account at AWS and build a new product, they go to an AWS compliance center and download documents informing them about what regulations they need to comply with. For example, this is very useful for fintech firms that need to implement controls for data localization and data security. In addition to compliance centers, AWS aids fintech companies by holding deep dive security talks which last from 4-5 hours for people who are unaware of the standard practices to remain secure. The market is huge and there are plenty of customers, which is why we direct our efforts to them. Our goals, in the end, are secondary to what our clients want to achieve. For example, one of India’s biggest retail banks, Axis Bank, recently committed to moving to AWS’ IT infrastructure and services. We also helped PayU, a global fintech company, to identify frauds in their system through a machine learning service called Amazon Sagemaker.
Do you see banks and financial institutions as possible partners for delivering the best service to customers?
Yes, of course. For 4 years, we have been carrying out a program called “Innovation Day” to bring fintech firms, banks, and insurance companies together to collaborate. With such collaboration, the ecosystem is going to benefit a lot more. This year’s was our biggest Innovation Day ever.
To conclude, what advice would you give to students who want to start a career in Tech companies or fintech startups?
My advice is: go for it! Even in failure there is a lot to learn! And the amount of learning grows year by year. If you want to put your hands onto multiple activities, startups are the best. My second advice is that startups’ founders matter. It’s a founder's behavior and values that shapes the whole business, so make sure that you admire and trust them. Second-time founders will teach you even more: they have built a company, raised money, made it successful, sold it, and started the next. They have learned a lot from their first attempt, and will share that precious knowledge with you.
Thank you very much, Sandeep, for your time and for sharing your experience with us. It was an inspiring interview and you gave us precious insights about a wonderful tech ecosystem. We hope to talk to you again soon!