RBI intends to create a cloud for financial data and a fintech information repository

 RBI intends to create a cloud for financial data and a fintech information repository

RBI intends to create a cloud for financial data and a fintech information repository

According to the regulator, it will be put into effect in the medium run and ultimately moved to a different company that is held by those involved in the financial industry.

The Reserve Bank of India (RBI) plans to establish a cloud facility and a repository to access data on fintech businesses in an effort to improve the security, integrity, and privacy of financial sector data and provide openness on fintech in the nation.

The cloud facility will be set up and managed by Indian Financial Technology and Allied Services (IFTAS), a fully owned subsidiary of RBI.

According to the regulator, it will be put into effect in the medium run and then moved to a different company that is held by those involved in the financial industry.

The Reserve Bank of India is putting up cloud infrastructure for the country's banking industry. Data from the financial industry will be more secure, intact, and private thanks to the planned facility. Additionally, scalability and business continuity are anticipated as a result, the regulator said in a statement.

clouds for the banking industry

Industry players applauded the decision, stating that client data security would be guaranteed by the cloud facility. "The suggestion by the RBI to establish a cloud facility for the Indian banking industry is a positive one. We are all aware of the need of protecting consumer data, as we have all witnessed several instances of data breaches. The cloud's simplicity will benefit regulators, businesses, and consumers alike in an increasingly digitized environment, according to V Balasubramaniam, CEO of Financial Software and Systems (FSS) Cash Tech.

Fintech businesses also anticipate seamless cloud-based operations.

The plan to establish a cloud facility for the banking industry is evidence of India's national technical capacity. According to Anil Sinha, Chief Technology Officer (CTO), Fibe, it will assist nascent fintech businesses in scaling their operations in addition to safeguarding the confidentiality, security, and safety of all financial data.

Fintech marketplace

Additionally, the central bank said that by April of next year, it would establish a repository to house data regarding fintech businesses.

Among other things, this repository will include data on fintech-related activities, goods, technological stacks, and financial data. This will serve in developing the policy outlook, according to the central bank.

FinTechs will be able to choose whether or not to provide information to the repository.

"It is suggested to set up a repository to capture essential information about FinTechs, including their activities, products, technology stack and financial information and others, in order to better understand the developments in the FinTech ecosystem and to give proper support to the sector," the RBI stated in a statement.

Fintech firms operating in the nation have expressed gratitude for the initiative, stating that the system would function as a transparent information source on these businesses. RBI will publish distinct instructions regarding repositories.

This has even more significance in light of recent developments such as fraudulent online loans and unlicensed lending applications. The members of the Digital Lenders Association of India (DLAI) would be eager and able to contribute to the repository. The CEO of the industry group for digital lenders, DLAI, Jatinder Handu, said, "We are awaiting comprehensive guidelines."

The mission of RBI is to comprehend the advancements within the ecosystem, including fintechs that use AI/ML and distributed ledger technology (DLT).

Additionally, RBI seeks to learn more about the fintech industry and its technology and algorithms. According to Credit Fair's founder and CEO, Aditya Damani, the reserves have the potential to close the knowledge gap between banks and regulators on the industry.

Fintech companies said that by providing the regulator with real-time knowledge, a repository would enable speedier decision-making.

"RBI's plan to establish a fintech repository is a huge step forward for the sector. By encouraging openness and improved cooperation between fintechs, other participants in the financial services sector, and regulators, it will further spur innovation. Encouraging fintechs to make voluntary contributions will provide regulators with up-to-date information. This will facilitate knowledgeable, flexible, and risk-reducing decision-making, according to Credgenix Co-Founder and CPTO Anand Agarwal.