It will not be possible for the digital and fintech industry to deliver its services if financial data is kept personal, said Subhash Chandra Garg, Economic Affairs Secretary and Finance Secretary of India, at a fintech event in Mumbai. He added that the Supreme Court’s Aadhar judgement was a setback for the fintech and digital space.
The government recognises the importance of fintech and had constituted a working group to closely look at all aspects of the fintech industry. There are 48-50 recommendations by the group which are succinct and cover all direct and indirect aspects related to fintech,” said Garg adding that the report will be released soon.
The Supreme Court judgement last year barred private companies from using Aadhar for electronic verification, forcing banks and fintech firms to turn to physical verification to onboard customers.
He added that the country has a baggage where financial information is treated as personal and that the conflict of balancing data use and data privacy is a global issue. He said that the focus should be on a “data protection and usage bill” instead of a data protection bill.
A draft data protection bill was published on the website of Ministry of Electronics and Information Technology, based on recommendations by a committee headed by Justice BN Srikrishna.
He said that it was necessary to solve the data privacy conflict in a satisfactory manner. “It is necessary to reach a workable compromise where data is available to the industry but the personal identity of an individual is not compromised.”
Garg said that the fintech and digital industry runs on data and if we don’t allow them to use the data it would be like missing out on ‘big oil’. He also said that customers share data with banks but are wary of sharing the same with Fintech companies. He said that it is necessary to also bring in safety precautions for data sharing to fintech companies as they exist for banks.
“All financial services in the future will be delivered by fintech, said Garg adding that the lower cost and better agility in delivery of services are some of the reasons for this.