Compliance not just about rules but spirit: Bipin Preet Singh of Mobikwik

India's FinTech landscape is poised to reach a market size of $150 billion by 2025 according to Invest India. With regulatory frameworks becoming increasingly robust, it's crucial for FinTechs to navigate compliance with integrity and foresight. Read on to understand how industry leaders are embracing regulatory challenges, understanding the nuances of financial regulations, managing compliance costs effectively, and the potential of SROs to shape the future of the sector.
ETBFSI Staff
  • Updated On Mar 18, 2024 at 11:01 AM IST
Read by: 100 Industry Professionals
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India has the third largest FinTech ecosystem globally and accounted for 46% of all real-time transactions worldwide in 2022. From its beginning in 2016, UPI recorded the highest-ever volume of transactions in January 2024 at 12.2 million.

Began with the banking correspondent models in 1990s, few of India’s initial FinTechs emerged between 2005-2009, and the market has traversed from its nascency to being relatively mature now.

This also brings in the most crucial aspect- being regulated and hence following compliance, which is more important than ever. Especially, given how FinTech regulations have become articulate enough in the last three years.

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Many instances of entities being penalised, and navigating the path can be tricky. In an interaction with Amol Dethe, Editor of ETBFSI, Bipin Preet Singh, Founder & CEO of Mobikwik, shares his insights on regulatory compliances.

Beyond the Letter: What constitutes integrity for FinTechs?

If one is dealing with money, they have to spend time in understanding the regulations. On top of that, complying in the very spirit of it. I have witnessed instances where the entity was following the letter but not complying in the spiritBipin Preet Singh, Co-founder & CEO, Mobikwik

This brings us to a rather interesting conjecture where one needs to understand the complexity of navigating financial regulations and the importance of not only knowing the rules but also operating with integrity and a genuine commitment to compliance and ethical conduct. It's a reminder that true regulatory compliance goes beyond mere legalistic adherence and encompasses a broader sense of responsibility and accountability in financial dealings.

Ask for compliance clarity

The Mobikwik founder also reflects on how with time there is enough expertise available and so many legal experts in the segment itself.

We, at Mobikwik, have adopted a proactive approach, even if there is a bit of confusion on our side in understanding a certain regulatory measure, we reach out to the regulator and they get back to us providing clarityBipin Preet Singh, Co-founder & CEO, Mobikwik

This is one way of staying ahead of regulatory challenges by actively seeking guidance, leveraging available expertise, and maintaining open lines of communication with regulatory bodies.

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Through the standards and licenses

The importance of rigorous compliance efforts while also recognizing the context-specific nature of compliance costs and standards within the fintech industry. He suggests that businesses should strive for the highest standards of compliance achievable within their regulatory framework, while also adapting to changes in the regulatory landscape and industry standards over time.

The standard of FinTechs is different from those of banks, so without a banking license, an entity can pick up a lightweight approach. You must have seen instances when the payment aggregator license, digital lending license came in and the landscape evolvedBipin Preet Singh, Co-founder & CEO, Mobikwik

Potential of SROs

Given the rapid growth and innovation in the fintech sector, regulators may not have the capacity to effectively oversee and regulate all fintech companies individually, suggests the Mobikwik Founder.

The introduction of the SRO model could provide a solution to this challenge. SROs are industry-led organizations that establish and enforce rules and standards for their members.

SROs could serve as a valuable intermediary between regulators and fintech entities, facilitating compliance and promoting industry best practices.
  • Published On Mar 18, 2024 at 11:00 AM IST
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