SELF REGULATION IN DYNAMIC FINTECH INDUSTRY

Fintech industry as we see presently did not exist even three decades ago.Fintech or financial technology can be described as the new technology used to improve and automate the delivery and use of financial services. It is utilized to assist companies, business men and consumers to better manage their financial operations. Financial sector of the economy in turn comprise of firms and institutions that provide financial services to  commercial and retail customers through banks,  non banking financial institutions, investment companies,Insurance companies and real estate firms. A lions share of financial sector revenues has been generated by loans and mortgages.It has been observed that emergence of various financial technologies has revolutionized the transactions making it easier and less time consuming and also less costly.  Fintech consists  of  new technologies that used to  improve and automate the delivery and use of financial services.Fintech's evolution can be traced back to the advent of computer systems and and growth of electronic banking in financial services industry in the 1970s and 1980s .Early innovations paved the way for Fintech expansion and development took the following pattern. While early 2000s witnessed development of Electronic banking and online stock trading platforms,the period 2005-10 saw mobile payments, P&P lending platforms,2010-15 saw Digital currencies and crowd funding, in turn 2015-20  Robo Advisors ,digital banking as against 2020s currently, witnessing Digital insurance,Digital Securities, open banking and online lending.

The use of financial technology innovations in  retail banking, investment, and also in  crypto currencies requires to enhance awareness in financial literacy, fintech technology and skills . Mobile devices are used to check the bank accounts, transfer money and provide more activities.In the  recent Global Fintech Fest 2023 RBI Governor Shashikant Dass had observed that Financial technology(Fintech) companies should create an "effective customer centricity governance and self regulation which are critical for the fintech ecosystem to be stable and future ready. Fintech firms need to evolve industry's best practices and privacy and data protection.Financial technology is extensively utilized  to support  companies, business owners and consumers to manage and better their financial operations, processes and lives. Innovation mechanisms such as Digital Split payments are also being applied in services in other countries as well.Mobille e payments of financial transactions in many countries, where there is a need to split payments across multiple forms. Split wise is utilized via a mobile app and web platform that uses  Fintech Software. Infact it helps users by providing the technology to help them enhance or  automate all financial transactions .Fintech can also be used in transactions related to crypto currencies like Bitcoin. Apart from utilizing in all the transactions, Fintech and new technologies such as machine learning, Artificial Intelligence (AI), predictive behavioural analytics and data driven marketing together will make revolutionary changes both in fintech  and also in customer service technology. 

Currently India is experiencing manifold increase in the Fintech ecosystem due to rapid adoption of digital technology. Fintech revolution is changing our track record from a cash driven economy to a digital economy. India's Fintech ecosystem is developed by introduction of new payment products developed by the National Payment Corporation of India (NPCI).These innovative solutions comprise of Credit Line on UPI and UPI LITE X and Tap and Pay service as introduced by RBI. State Bank of India on the other hand launched RuPay backed National Common Mobility Card which would facilitate all kinds of payments ranging from road  transport to rail ,waterways to parking across the country.The UPI Tap and Pay is another move towards enhancing Q R code and near field communication technology adoption. RBI Governor also introduced UPI Tap and Pay method. Apart from the conventional Scan and Pay method, users  can now have the option to simply tap and NFC enabled QR codes at merchant locations to complete their payment. Users in addition can use the conventional Scan and and  utilise pay methods. 

Global fintech sector is currently account for US $245 billion. and is expected to reach $ 1.5 trillion by 2030.By 2030 India will receive $200 billion as revenue accounting for about 13% of global fintech industry according to the estimate made by Fintech Association of Consumer Empowerment (FACE) of  India fintech companies in India are witnessing rapid growth in loan disbursal  as evident from rupees 29875 crores in first quarter of Financial year 2024 compared to rupees 22682 crores in quarter one of Financial year 2023.

RBI Governor suggested Fintech companies to establish their own Self Regulatory Organisation (SRO). It is a non governmental organization that sets and enforce the rules and standards relating to the conduct of entities in the industry.The aim is to primarily protect the custumer and promote ethics, equality, and professionalism. In framing the rules and regulations all stakeholders have to be collaborated . The fundamental function of SRO is to serve as a two way communication channel between its members and Reserve Bank of India.It will work towards establishing minimum benchmarks and standards and help to instill professional and healthy market behaviour among its stakeholders. Accordingly they will impart training to the staff of its members and others and will organise awareness programmes.Quite significantly it  will establish a uniform Grievance redressal dispute management framework across its members.legally speaking regulatory bodies that regulate fintechs in India are RBI,IRDAI and SEBI.

While GDP wise India is currently in the 5th position whereas in terms Fintech spread we are already in the third position globally.Experts advocate that we may take the second or even top position in Fintech industry in the immediate future.Proper alignment of innovation, policy making, government, companies,collaborators, vendors and their co operation will result in positive and efficient outcomes.Infact  fintech eco system offers tremendous opportunities taking into account the relatively untapped market in India.Fintech growth fuels multiplier effect as the economy avail more opportunities which will  foster further growth of fintech sector.However as observed by Bank of International Settlement (BIS) Occasional paper regulation should evolve to encourage fair competition between traditional banks and fintechs.Experts also observed moving away from an "entity based " to an "activity based regulatory approach. In any case consumer protection, Ante Money Laundering (AML), combating the financing terrorism ( CFT), regulation of Crypto assets, monitoring Crowd funding platforms etc. are major challenges that need to  be monitored and regulated closely by the Self Regulatory Organisation. Obviously in future,  based on experience and expertise the structure and functioning  of  regulation can be fine tuned to the emerging revolutionary changes taking place in the Fintech industry,  providing optimum services and  fair practices.