 "Fintechs can act both as competitors and collaborators: T Rabi Sankar")
The fintech players can act both as competitors and collaborators for traditional banks and NBFCs, and both can take advantage of their respective strengths, T Rabi Sankar, deputy governor of the Reserve Bank of India, said on Tuesday.
Speaking at the Global Fintech Fest, Rabi Sankar said that traditional institutions should move into a collaborative arrangement with fintech firms in order to take advantage of their respective strengths.
"Traditional players with robust balance sheets, capital base and risk management practices can provide strength and stability," he said.
"While fintech, with their agility and innovative capabilities, can deliver on customer experience and expand access. Customers benefit from an improved experience of curated products and services at competitive prices," he added.
He said regulators also draw comfort from these arrangements as traditional financial entities—banks, NBFCs—which are well-regulated, will continue to discharge the basic responsibility of risk management through their own balance sheets.
He, however, expressed concerns about the agility of these new-age fintech firms and the inability of existing regulatory frameworks to be entirely applicable to them. He emphasised the importance of Self-Regulatory Organisations (SROs) to ensure responsible practice as well as the maintenance of ethical standards by these companies.
"The industry participants, who possess the deepest understanding of the process and practices within them, are best suited to establish common rules and effectively handle disputes that may arise from non-compliance with these rules," he added. (End)