Steering Group to make recommendations
The Government has realised the need to give a fillip to the fintech industry and constituted a steering group in the finance ministry.
The Group has “looked at all aspects very closely and made its recommendations” which are expected to be announced very soon, said S C Garg, Finance Secretary and Secretary Department of Economic Affairs.
“There are about 48-50 very good, succinct recommendations, very specific, covering almost all the sectors directly in the financial space, and also indirectly.”
Another aspect is regulation. Reserve Bank of Indai (RBI) has demonstrated openness in creating regulatory models for various kinds of experimentation.
With the dynamism shown by the sector in working with the Government and regulators, Garg foresaw very good growth of the fintech space in the near future.
However, he sounded a note of caution on 14 Mar 2019 at the PICUP Fintech 2019 conference organised by Federation of Indian Chambers of Commerce and Industry (FICCI) and Indian Banks’ Association (IBA).
One issue in the recent past, after the judgement on Aadhar, gave a setback to the fintech industry. This was in connection with the ability to use KYC and digital data.
“That is the advantage; if that advantage is taken away, then it’s unlikely to help the entire industry,” he pointed out.
Garg mentioned that there has also been an attempt to bring in a data protection law. In his opinion, this is a conflict that needs satisfactory resolution. Most financial data is personal, and there has been a tradition of keeping information private. But in that case, the industry will find it difficult to deliver.
“How do we ensure that what is really personal remains in the control of the right people?”
Garg pointed out that data is identity. “There is no difference today between a person and his personal data.”
But at the same time, fintech runs on data, so that data needs to be available. Otherwise all advantages that come from fintech will be lost. He recalled the way we dealt with financial personal information earlier.
“We have very critical information on a cheque which is signed. Can that information not be available for the fintech industry?” But banks have a lot of safety provisions built around their operations.
In fintech, the data gets transferred so fast, nobody knows where it is going. “Therefore, a new kind of system will need to be designed which assures that the information is not misused. That is what we will have to resolve,”
IBA Chief Executive V G Kannan added that in India, fintechs contribute towards financial inclusion in a big way, meeting the underserved needs of the country.
“Fintechs are able to make a difference in the delivery of financial services to customers,” said Kannan.
IBA and banks support these new technologies and likewise, fintechs have helped many banks introduce chatbots. Many banks have set up innovation labs, incubators and accelerators to help both the banks and the fintechs. fiinews.com