The advent of financial technology (FinTech) brought about considerable efficiency, transparency, and accountability in the functioning of the banking and finance industry. Banks began welcoming and cooperating with their FinTech disruptors to manage technology trends such as Cloud, Mobile, and Blockchain to survive in a market powered by disruptive technologies. Amazon Web Services (AWS) adoption for FinTech has also led to these banking and finance companies accelerate lowering their costs immediately.
Micro, Small and Medium Enterprises (MSMEs) have long voiced their discontent concerning access to credit (traditional banking systems), and also about encountering rampant operational inefficiencies. According to a recent report titled, “Credit disrupted: Digital MSME lending in India,” by the Omidyar Network and Boston Consulting Group (BCG), MSMEs still find it cumbersome to access formal credit as nearly 40% of lending is taking place via informal sources; with total MSME credit demand estimated in the report being Rs. 45 lakh crore, Rs. 25 lakh crore are to be offered via formal (credit) channels (borrowing via proprietor name—Rs. 10 lakh crore—or via entity name—Rs. 15 lakh crore), Rs. 20 lakh crore are to be financed via informal (credit) channels (as reported by The Hindu Business Line).
In the midst of the entire digital money versus cash money saga rests the core trigger of the seemingly apparent decline of the physical money. As experts, researchers, and analysts have time and again opined, this (so far) unavoidable trigger is “the cost of cash.” Therefore, it’s obvious that containing cash costs is a must for financial institutions to position themselves competitively in the market. Along with this, it is also necessary to promote cash efficiency and decrease the costs of cash operations.
The Reserve Bank of India (RBI) recently released the “Payment and Settlement Systems in India: Vision 2019 – 2021” (Vision 2021), with its central theme being, “Empowering Exceptional (E)payment Experience.” The vision document envisions achieving “a highly digital and cash-lite society” via the framework of the 4Cs: competition, cost-effectiveness, convenience, and confidence.
The United States (U.S.) Government, National Labour Relations Board (NLRB), Office of the General Counsel recently released an advice memorandum (dated April 16—released on May 14) that can potentially have repercussions not only for Uber Technologies Inc. drivers in the U.S. but also those operating in India for the ride-hailing giant. The general counsel stated in its (opinion) advice memorandum that since Uber drivers themselves decide their working hours, log-in locations, whilst also being the owners of the cars driven by them, and, since Uber also supports drivers’ entrepreneurship—in a way granting them enough freedom to be able to also choose to work for Uber’s rivals, the Uber drivers should be classified as “independent contractors” (not as employees—under the U.S. federal law) of Uber. This compels drivers and their legal representatives to face a herculean task of (legally) persuading Uber to reframe its labor policy so as to classify drivers as employees.