Advances in technological innovation are transforming the financial sector at an unprecedented rate, creating opportunities and challenges for businesses, consumers as well as policymakers. Such technology-enabled innovation in the financial sector (fintech) will cuts across different areas of financial services such as banking, payments, currencies, lending, investment, insurance and financial advisory services. While such digitisation of the financial sector opens up opportunities, especially in the context of financial inclusion priorities and increasing efficiency of existing systems, it also comes with its unique set of challenges.
For instance, increasing reliance on data-driven technologies raise risks regarding consumer protection, data protection and transparency. Left unaddressed, these risks may lead to a lack of consumer trust in such systems, creation of new types of exclusions for certain vulnerable sections and increased consumer vulnerability to deceptive practices. Similarly, the entry of new players, emergence of new business models coupled with the inter-connectedness of the financial system highlight the possible impact of such digital transformation on financial stability, market integrity and competition. Therefore, the challenge for policymakers is to design such frameworks that can adapt to these fast-paced fintech innovations and maximise its benefits while minimising potential risks for the financial system and stakeholders.
To harness the potential of fintech that will shape the future of finance, Vidhi is conducting cutting-edge research at the intersection of finance, technology and law. Upcoming research will focus on contributing to the development of an enabling framework for a digital financial system fintech that balances the objectives of financial stability, consumer protection, competition and innovation.
By providing thought leadership through such research, Vidhi aspires to contribute to the development of an inclusive, stable and resilient financial system for all, while informing both policy initiatives and the public discourse.
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Draft Framework for Recognition of a Self Regulatory Organisation for Payment System Operators – Vidhi Submission to RBI
Summary of Vidhi's comments & recommendations on RBI’s Draft Framework