Speaking at the Global Fintech Fest (GFF) in Mumbai on September 9, 2026, Reserve Bank of India (RBI) Deputy Governor Rohit Jain emphasized the critical need for enhanced safeguards within the rapidly evolving financial technology sector. As innovation scales up and technology becomes more deeply embedded in financial services, the obligation to protect customers and manage risks remains paramount, regardless of whether models or technologies are supplied by third parties.
Jain underscored that the responsibility for fair customer treatment does not diminish simply because an algorithm influences a decision. He reminded attendees that behind every technological interaction, there is a real person: a saver, a borrower, a merchant, or a family relying on the financial system. This human element, he stressed, is where the ultimate responsibility of financial institutions lies.
Key Concerns in Emerging Fintech
The Deputy Governor identified three primary concerns arising from the deeper integration of emerging technologies into finance: speed, concentration, and opacity. While these risks are not entirely new, technology has the potential to amplify them significantly, allowing their effects to propagate through the financial system faster, wider, and often in ways that are harder to detect.
- Speed: Rapid transaction processing and automated decisions can accelerate the spread of errors or systemic shocks.
- Concentration: Many financial institutions increasingly rely on a limited number of cloud providers, technology vendors, and model providers, often utilizing similar infrastructure. This common dependency creates a risk where a disruption or error in one provider could simultaneously affect numerous institutions.
- Opacity: Complex algorithms and models can obscure decision-making processes, making it challenging to understand how outcomes are reached and to identify potential biases or flaws.
Jain highlighted that while technology can make financial services more accessible, cheaper, and faster, the fundamental question remains whether it genuinely solves a financial problem better, who truly benefits, and what new costs or risks are introduced in the process. He asserted that a solution, no matter how technologically impressive, holds little value if it fails to address an actual problem. Technology, therefore, must remain a means to an end, with its purpose as the starting point.
The Policy Dilemma
The rapid evolution of technology also presents a complex challenge for policymakers: determining the optimal timing and method for intervention without stifling beneficial innovation. Jain noted the dilemma:
- Intervening too early risks creating detailed regulations for technologies not yet fully understood, or for architectures that may change before rules take effect.
- Intervening too late means the technology could be deeply entrenched before its risks are fully comprehended and addressed.
Ultimately, institutions must cultivate the ability to detect problems early and intervene effectively, preventing minor issues from escalating into significant systemic failures.