Stronger regulations needed to check fintech frauds: RBI

New Delhi: Robust regulatory frameworks are needed to protect customers from misuse and fraud resulting from rapid digitalisation in financial services and proliferation of fintech platforms, RBI Deputy Governor Swaminathan J said while speaking at an event in Paris.

Addressing the Global Money Week 2024 earlier this week, the Deputy Governor said the Covid-19 pandemic accelerated digitalisation in financial services, prompting a swift transition to online mode by service providers and customers, according to an RBI statement. Accompanying this surge in digitalisation was also the proliferation of fintech platforms, he said.

Often operating outside the regulatory envelope and unconstrained by legacy systems that typically encumber traditional banks, fintech companies exhibit remarkable agility and adaptability in offering customised financial products, Swaminathan added. "These developments are indeed welcome. However, while they offer immense benefits such as accessibility and hyper-personalization, they also heighten the risk of misuse and fraud. They can expose consumers to risk of cyberattacks, data breaches, and often times, some financial harm," he said.