Fintech Challenges for Financial Inclusion

Posted on December 15, 2017 by Sumita Kale

With digital payments on the rise and with digital financial services increasingly set to reach the previously unbanked at the click of a button, the government and the regulators have fresh challenges. As Graham Wright points out in his blog post, Can Fintech Really Deliver On Its Promise For Financial Inclusion?, regulatory capacity and the customer protection environment are weak in most countries, making the poor even more vulnerable to fintech. In India, considerable work is underway. The Ministry of Electronics and Information Technology has released its “White Paper on Data Protection framework for India”, inviting comments from the public till 31st December 2017. The Telecom Regulatory Authority of India (TRAI) has released its Recommendations on Net Neutrality for the Department of Telecommunications to now take a call on. Next up, the TRAI is working on a consultation paper on regulating OTT services, and will also take up issues of privacy, security and ownership of data. All these will impact the delivery of digital financial services to the poor and underbanked. However, the Supreme Court is yet to set a date for its final hearing on the Aadhaar petitions - the country has been waiting more than two years for this.

At this juncture, the RBI needs to begin a system of comprehensive monitoring, to ensure that the customer protection framework is tight. It should also initiate a process of collecting, and disseminating, granular data to understand the impact of these new services on low income customers. India is seen as a global leader in financial inclusion, we have a greater responsibility now in getting things right.


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