DMPQ-“India needs new regulations and technology updates for it’s financial technology market.” Discuss.

. Recently, India has overtaken China as Asia’s top financial technology (FinTech) market. Having emerged as the world’s second-largest fin-tech hub (trailing only the US), India is experiencing the ‘FinTech Boom’.  Fintech is used to describe new technology that seeks to improve and automate the delivery and use of financial services. The key segments within the FinTech space include Digital Payments, Digital Lending, BankTech, InsurTech and RegTech, Cryptocurrency.  FinTech now includes different sectors and industries such as education, retail banking, fundraising and nonprofit, and investment management to name a few. ​​​FinTech is amongst the most thriving sectors at present in terms of both business growth and employment generation. Apart from this, FinTech can also help in the furtherance of the goal of financial inclusion.

The scrapping of the merchant discount rate (MDR) rids payment service operators of a vital source of revenue, and slams the door shut on new entrants — the dialogue participants were unanimous in asserting this. The government and RBI would do well to rethink this myopic restriction. The inadequate capacity of the banks’ technological infrastructure to cope with the explosive growth in volumes makes headlines but is relatively easy to fix. But guarding against cybercriminals is far more complex, calling for, as it does, both technological safeguards of ever-rising sophistication but also educating and training customers to guard against practices that harm them. More challenging still would be making available the data that fintech can mine to assess credit requirements and viability while regulation makes sure that such data access does not harm the data subjects. Ant Group’s lending arm reportedly processes 3,000 data points while taking a credit decision. Indian fintech is far removed from such capability.



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