Page 42 - Banking Finance May 2024

ARTICLE

convenience, cost effectiveness, fast and ability to provide Mobile applications: Most fintech companies provide a
customized solutions the consumers have adopted it and mobile app which is a improvised and user friendly version
started relying on these fintechs ranging from banking to of a website. Consumers can access their funds any time. It
investments and budgeting to funding. could be a digital banking app, a financial management tool,
or an investment platform.
Fuelled by investments and returns of existing fintechs, many
players are entering into the market with the augmented
features driven by artificial intelligence, machine learning
and big data.

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Regulatory Compliance
Two basic features are common in most of the fintechs
As fintechs are increasingly becoming more main stream and
which form foundation for any fintech company in delivering
disrupting traditional financial institutions, regulators have
services to their consumers-
begun to take a closer and deeper look at their operations
to ensure they comply with laws and regulations. Presently
Financial APIs: API (application program interfaces)
regulations seem to favour traditional banks on account of
connects consumers' bank accounts to fintech apps and
their traditional approach and high standards of corporate
services safely and securely for sharing financial data,
governance combined with well developed compliance
transfer funds, and verify their identities. Through the use
culture leading to the transparency and safety of public
of financial APIs these apps provide facility to transfer funds
money. For example, accepting deposits from general public
anywhere without visiting any bank branch or even website
is permitted to banks only.Fintech companies operate in a
of the bank.
highly regulated environment, and keeping up with evolving
regulations across different regions can be a significant
challenge.
There will always be regulation even companies leverage
the traditional Fintech software that doesn't use block chain
and other crucial technologies. Companies must adhere to
a number of laws. Adhering to these regulations often
requires substantial resources and can slow down the pace
of innovation as companies need to hire a legal consultant
and a dedicated system for tracking the regulatory updates.
Paytm is the latest and classic example of regulatory action
on account of non compliance and continued material
supervisory concerns.

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