The RBI, in its article that surveys the policy focus of central banks towards FinTech developments using natural language processing-based text mining analysis of central banks news articles, speeches and interviews suggests that payment systems are a priority, both in terms of innovations and regulation by the central banks among different areas of FinTech. Temporal analysis indicates that central bank digital currency (CBDC) and its usage is emerging as the central area of policy discussions and initiatives, with the focus shifting towards modalities of CBDC implementation from the earlier concerns related to applicable technology and financial implications.
The central banks are monitoring evolution of FinTechdriven solutions to preserve consumer confidence and the stability of overall financial system. As recently pointed out by the RBI Governor, Technological innovation has unprecedented potential to make finance more inclusive, competitive and robust. It is crucial that technological advancements in the world of FinTech evolve in a responsible manner and are truly beneficial to the people at large RBI finds the role of FinTechs in promoting digitalisation which plays a crucial role in financial inclusion. FinTechs can also influence consumer decisions and have far-reaching implications for monetary policy and financial stability.
Results obtained from text mining of central banking news/articles shows that the policy discussions on CBDC have evolved beyond initial concerns about technology and its effects on cash, bank deposits, and monetary policy. The text mining analysis of FinTech news/policy documents of the Reserve Bank shows that due emphasis is given to consumer protection, service delivery and financial inclusion, stressing upon the need to maintain a healthy balance among all the stakeholders and enshrining an essential feature of the financial services that of a public good.
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