Fintech
How SRO-FT Powers India’s FinTech Revolution
Today
- Financial inclusion
- Fintech Growth
- fintech regulation
Ankit Ratan, Co-Founder & CEO, Signzy
By Ankit Ratan, Co-Founder & CEO, Sign
India’s FinTech sector is an innovation powerhouse, promoting financial inclusion for its massive population. With over 10,244 players, it ranks as the third largest FinTech market in the world. However, regulatory compliance remains a challenge. The diverse nature of the sector, with players in banking, insurance, lending and more, requires a nuanced approach to regulations. A “one size fits all” solution stifles innovation, and the lack of clear guidelines hinders responsible growth.
One of the main reasons for such non-compliance is the lack of a regulatory framework for the sector. To address this issue, the Reserve Bank of India (RBI) has introduced the SRO-FT framework in collaboration with FinTech players to address this very issue. This framework strengthens self-governance within the sector, promoting sustainable growth.
More than just rules: a supporting ecosystem
The SRO-FT facilitates open communication between regulators and FinTech companies that serve various industries. This enables the creation of targeted solutions that address the unique compliance needs of each segment, be it banking, insurance or capital markets. The SRO-FT goes beyond setting regulations; it enforces them while serving as a supporting guide. It offers essential resources such as training programs and knowledge sharing initiatives to empower FinTech players.
Transparency and Collaboration: Building a Solid Ecosystem
Since RBI first announced the SRO framework for finalization in May, it has provided ample time for FinTech players to prepare, understand and contribute to the SRO-FT. RBI’s commitment to industry engagement is evident in the time provided for feedback on the framework before finalization. This collaborative approach fosters trust and ensures that the SRO-FT remains relevant in the face of evolving challenges.
Balancing Innovation and Ethical Practices and Bridging the Gap Between FinTech and Regulators
The framework establishes clear boundaries between ethical and unethical practices, promoting fair competition and responsible innovation. It ensures a thriving FinTech landscape that prioritizes integrity. The SRO acts as a mediator, facilitating seamless communication between FinTech companies and the RBI. This promotes a culture of compliance and ensures that all players are on the same page.
Protecting consumers and ensuring high standards
The SRO-FT establishes an efficient complaint resolution system for both consumers and FinTech members. It also mandates consumer education initiatives, providing users with the knowledge to make informed decisions and use financial technologies effectively. The framework also mandates regular assessments of customer service standards, ensuring consistently high-quality service.
The RBI’s PRAVAAH portal complements the SRO-FT by streamlining regulatory approvals and licensing processes. This combined effort simplifies compliance for FinTech players, allowing them to focus on innovation and financial inclusion.
Conclusion: A catalyst for a thriving future
With the SRO-FT framework leading the way, the Indian FinTech sector is poised for a bright future. The collaboration between FinTech players and the RBI fosters a culture of compliance, empowers responsible innovation and ultimately benefits consumers. This paves the way for a more inclusive and prosperous financial landscape for India.