In India, Data is a Public Good – Madhabi Puri Buch, Chairperson, SEBI.

Speaking at the Global Fintech Fest 2022, the Chairperson of Securities and Exchange Board of India (SEBI), Ms. Madhabi Puri Buch painted a clear picture of what’s goes on inside the minds of Financial Regulators in India. She very intelligently grasped the attention of the audience who were mostly start-up entrepreneurs and players from the fintech world, with her guiding principles to have a sustainable business model in fintech. 

According to her, technology has the power to transform the landscape of financial services with its ability to lower the costs of services, making financial services affordable to all and thus facilitating financial inclusion. Innovative products in the fintech space are those that cater to the needs of the customers which are either not addressed by the regulators or currently do not form part of the scope of the regulators. Since the Indian regulatory framework is a hybrid of both principle-based and rule-based frameworks, she acknowledged the existence of gaps in the regulations. While the regulators are catching up with innovation in fintech, she suggested a few simple principles to follow to reduce the regulatory risk and build a sustainable business. 

Speaking about Data, she reiterated the principles of SEBI, RBI and other financial watch-dogs that in India Data is a public good. No one can claim ownership of it. Data is public infrastructure that is provided by the regulators to all private players to build their business on top of this infrastructure. Data disclosure has been made available for free of charge for all. The Account Aggregators system is one of the examples of how regulators making sure data is available for all. 

Here are the six dos and donts from her, which we believe should be a pin-up at every fintech business in India:

1. Anonymity is taboo with any financial regulator. Any product or service built around providing anonymity to its customers will be vulnerable to regulatory risk sooner or later.
2. Transparency of offerings wherein the claims of the business can be validated independently will win the support of the regulators.
3. Products or services built around financial inclusion, serving the bottom of the pyramid are favoured by regulators
4. Customers’ Right to Exit is a must for all products or services. Creating barriers for customers exit will surely attract negative attention from regulators
5. Data is a public good, and any business built to control the infrastructure will not be sustainable over the long run. 
6. Financial stability is the core business of all financial regulators, and any business furthering structural vulnerability such as concentration risk, governance risk, and others will be answerable to regulators 

You can view her full speech here.