With the recent Free Trade Agreement between India and UK, the two countries have a great chance at relooking at their economic policies, benefiting from this alliance and learning from their past mistakes. Asian Voice spoke to two British Indian businessmen in the FinTech world about the way forward and the past learnings.
Swastik Nigam, is the Founder & CEO, Winvesta, which is a fintech company building global financial solutions for individuals and businesses. Swastik studied in India and moved to the UK after completing his MBA at IIM-Ahmedabad. He worked as an Investment Banker for a decade at Deutsche Bank in the City of London, where he ran a multi-billion-dollar trading portfolio. He started Winvesta, a cross-border neobank and investment platform to build a first of a kind set of products for India and the UK. Winvesta is headquartered in the UK and has its largest customer base and employee base in India.
Speaking to Asian Voice, Nigam shared an important observation regarding the UK-India FTA. He said, “We are far from closure on the FTA. It is too early to mention if any country has got a raw deal over the other. It is in both countries’ interest to treat this with priority and speed. An FTA will work when both countries give and take. They will offer their skills, resources and products to help the other. Both countries are similar-sized GDPs and this conversation can thus come together in a way that FTAs are more balanced than otherwise. The early harvest agreement that they’ve spoken of will be a key document to view. The UK needs to fill a labour shortage across sectors and India can help fill it. Through services exported straight from India, or through migration. India can enjoy the expertise from the UK and upskill multiple sectors - especially service sectors.”
Talking about the paradigm shift in the post-pandemic world in terms of investments, Swastik said, “Remote working is a key shift. Now companies are able to scour the world for the most appropriate talent. This is even better accelerated if an FTA can exist as in the move to normalcy movement across countries can be eased keeping remote working in mind. At a business level, there is a great opportunity to think of increasing revenues by digitally distributing in a new geography or by reducing costs.”
Saving for foreign education
He added that as India grows and the wealth of its citizens rise, their ambitions to give their kids a foreign education increase. “Previously, it was very difficult to save for foreign education - you had to stump Thus, through an offering like at Winvesta, they can save up in multiple currencies in advance of their children going overseas. They can use that money to invest in the international stock markets as well,” he further explained.
Giving advice for an average individual in the post-pandemic world regarding savings and investments, Swastik Nigam told us, “The rules of savings stay unchanged. Start early. Start small. Be consistent. But while the pandemic may have brought hardships on many, it has also been a time to identify what matters. Many are starting up, many are recognising that they can work from anywhere. They’ve had more time to manage their money as well.”
Mistakes and learnings
Dissecting the mistakes and learnings from the economic aftermath of the pandemic, the IIM graduate said, “I think the UK responded very quickly and deterministically. It has rebounded quickly. The furlough scheme it launched was unparalleled for a nation of its size in terms of the speed it launched it with. This was more specific than many other countries. While the UK did well to respond economically, it has, unfortunately, had a fair degree of controversy in terms of how its leadership responded.
“For India, it didn’t have the resources or use tools that western nations have previously used for preservation. There were few measures for job preservation, limited tax rebates. But India has emerged well from the disastrous first wave. A rapid vaccine rollout and the continued high vaccination rates are no small feat to have achieved for a country its size. However, the true inspirations are those that have changed sails through these trying times - the success that India’s early-stage firms have enjoyed is exceptional.”
Hassle-free cross-border investments
Mentioning the level of security and digital expertise that is required to facilitate hassle-free cross-border investments and transactions, he elaborated, “As we at Winvesta deal with clients’ money, it is very important that our customers are able to entrust us with their money and ensure protection. Our platforms are protected through the start of the art encryption. Additionally, our client’s interactions also have biometric checks and 2-factor authentications. We also ensure multiple regulatory compliances - like checking for detailed information required for KYC (Know Your Client) and Anti-Money Laundering (AML).”
Ashesh Jani, Co-Founder & CEO, Ribbon Plc, is a former Retail and Digital Banking head of a large Indian bank. Born, raised and educated in Mumbai, Jani has lived and worked in the UK, Canada. Ashesh is working on launching a digital neo-bank in the UK, Ribbon PLC. Ribbon is part of a UK-India corridor focused financial services group with industry experts and leaders as co-founders and the board.
Ribbon is a NetZero digital financial services super-app for global Indians. At its core, is an AI-powered technology offering a hyper-personalized experience to its users. Features include a payments marketplace, deposits, FX, Crypto & Equity trading platforms. Financial literacy widgets to set Goals, track Budgets, a Piggy Bank and analytics dashboards as users earn loyalty coins, save, and spend with their Ribbon physical and virtual cards. NRIs, Residents of India, students and work-permit holders can now have a multi-currency account in the UK.
FTA is a win-win deal for UK and India
According to Jani, the FTA is focused on creating a win-win deal for both economies.
“The UK has advanced research, technology, and access to capital whereas India needs clean energy, healthcare, education, infrastructure, technology, fintech, food safety, etc. In turn, it offers c. 250 million middle-class consumers to monetise such investments. Indian apparel, textiles, leather, and processed agri-products find a large market in the UK,” he told Asian Voice.
Discussing the impact of this FTA on the retail and banking sector, Jani said, “The UK fintech can bring their superior digital banking platforms to reach the vast underbanked segment and build access to digital microcredit for the MSME sector. In return, they gain access to millions of consumers while partaking in the corporate and government debt and capital raise needed for India’s growth. Indian financial services sector will gain in data localisation policies, data protection rules and IP practices. A significant proportion of trade is in intermediate goods that go into the production of other goods. Lowering tariffs will reduce costs for UK businesses. These benefits ultimately result in lower prices for consumers.
Who takes the cake?
When asked which country is taking the lion's share of benefits from the FTA, Jani said, “These negotiations are between equals. India’s growth is not a matter of “if” but “when”. The Indian economy will create demand for infrastructure, consumer goods/services, tourism, and overseas education. Pressures faced by the NHS and the transport industry during the pandemic make great case studies for fast-tracking an FTA with India to tap its skilled labour force.”
Jani thinks that reforming India’s generous labour market policies and creating formal access to microfinance for the MSME sector are key priorities. Subsidizing infrastructure to enable people to work through digital means is essential. The UK needs a policy shift from replacing lost income to focusing on creating new income. It must amend its labour market policies, improve its supply chains, and accelerate FTA.
Rishi Sunak has done a remarkable job
Speaking of the UK’s economic recovery and the trust that one can place in Chancellor Rishi Sunak, Ashesh told us, “The economic recovery rates will be clearer as the impact of relaxation in restrictions is measured. The British economy may remain under pressure in 2022 given the energy inflation. Rishi Sunak has done a remarkable job over these past two years. He is astute, seems ambitious and has displayed a statesmanlike approach. Also a clear favourite amongst his party for a higher role. I wish him the best!”
