The FinTech sector has grown significantly in India, discuss its potential and challenges in its mainstreaming.

The Fin tech innovations refer to new-age methods for streamlining financial transactions across digital payments, equity, insurance and other sectors.

Potential of FinTech Sector:

• Goes with digital India and digital payments push of the government.
• Convenient and efficient payments.
• Secure – 2/3 factor authentication.
• Ability to plug leakages in subsidy delivery/PDS.
• Prevention of money laundering – enables monitoring of suspicious transactions.

Challenges in mainstreaming:

• Lack of robust financial security mechanisms in mutual space.
• Reluctance of people to accept.
• Low internet penetration and high cost of hardware.
• Regulatory compliances are cumbersome.
• Concerns about data protection, fishing, data fraud.

Way forward:

• Awareness about FinTech innovations.
• Robust digital security ecosystem.
• Spreading awareness about safe FinTech practices among people.

Regulatory sandbox for development and trial of new innovations.

Topics: GS-III: Indian Economy Issues Relating to Planning • GS-III: Economic Growth Development