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Financial services

Unlocking India's Financial Internet: How ONDC is Redefining Access to Financial Services

Strategic Insights

— 2 min read

India's financial services ecosystem is undergoing a silent transformation, driven by the government-backed Open Network for Digital Commerce (ONDC). This open digital marketplace is connecting buyers and sellers, making it easier to access financial products and services. ONDC is transforming India's access to financial services by making discovery, verification, and delivery interoperable, creating a "financial internet" where any customer can access any provider, through any app, via standardised protocols. The network is built on the same rails as Unified Payments Interface (UPI), India's digital public infrastructure for payments.

Key Takeaways:

  • ONDC is an open digital marketplace connecting buyers and sellers, making it easier to access financial products and services, and creating a "financial internet" where any customer can access any provider, through any app, via standardised protocols.
  • ONDC works on an open protocol, allowing any app that adheres to its technical specifications to integrate with the network, eliminating the need for a "super app" and enabling wider access to financial products.
  • Investors gain wider access to funds, not restricted to offerings on a single investment platform, and asset management companies (AMCs) get reach without depending on a few distribution apps.
  • ONDC is connected with existing digital public infrastructure for data sharing, authentication, execution, and settlement, including Aadhaar, Account Aggregator, Central KYC, DigiLocker, eNACH, Open Credit Enablement Network, and UPI.
  • Multiple service providers provide logistics for loans, insurance, and mutual funds on ONDC, including Cybrilla, which provides application programming interfaces (APIs) for mutual funds, and Edelweiss AMC, which launched its specialised investment fund (SIF) offering on ONDC.
  • ONDC has reduced the number of layers or intermediaries involved in processing, allowing for lower costs and enabling smaller ticket size SIPs, which is a significant advancement for small distributors.
  • Over 20 asset management companies (AMCs) have already joined the ONDC network, with others likely to follow, and multiple buyer applications have also integrated with the network.
  • ONDC's financial services revolution is extending beyond loans and mutual funds, with the network enabling gold loans, credit cards, and loans against mutual funds in the next phase.

Statistics:

  • Over 20 AMCs have joined the ONDC network, with others likely to follow
  • Multiple buyer applications have integrated with ONDC, including Appreciate, GRIP, SimpliFin, Easypay, and Paisabazaar
  • ONDC is connected with existing digital public infrastructure for data sharing, authentication, execution, and settlement
  • Cybrilla has provided APIs for mutual funds on ONDC
  • Edelweiss AMC launched its SIF offering on ONDC
  • ONDC has reduced the number of layers or intermediaries involved in processing, allowing for lower costs and enabling smaller ticket size SIPs

Sources:

  • Times of India (sanket.dhanorkar@timesofindia.com)
  • Aditya Birla Capital
  • Nippon India Mutual Fund
  • The Wealth Company Mutual Fund
  • Edelweiss AMC
  • Fydaa (Sebi-registered investment adviser)

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