Strong regulatory framework required to monitor digitalization risks: RBI

<p>In a speech at an event in Paris, RBI Deputy Governor Swaminathan J said that strong regulatory frameworks are necessary to shield consumers from abuse and fraud brought on by the financial services industry’s fast digitalization and the growth of fintech platforms.</p>
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<p>Speaking at Global Money Week 2024 earlier this week, the Deputy Governor said that the COVID-19 epidemic has hastened the digitalization of financial services, causing service providers and clients to quickly switch to online modes, as per an RBI release.</p>
<p>According to him, the rise in financial platforms coincided with this wave of digitalization. Fintech businesses, which are often free from legacy systems that burden conventional banks and frequently operate outside of regulatory boundaries, demonstrate exceptional flexibility and agility in providing tailored financial solutions, according to Swaminathan.</p>
<p>“We are happy to see these advances. But even though they have many advantages, including accessibility and hyper-personalization, they also increase the possibility of fraud and abuse, the speaker said.</p>