What should fintech innovators keep in mind to avoid oppression? Sebi chief tells
What should fintech innovators keep in mind to avoid oppression? Sebi chief tells
“With construction, there’s always going to be a regulatory gap. If startups are building something completely new, it hasn’t even crossed the minds of those in the regulatory body,” she said. Adding, “When we finally show up, what is fintech innovators should have kept in mind to avoid disruption?”, Buch detailed some points that the industry needs to keep in mind.
Here is the checklist:
Transparency: SEBI’s core mission is to ensure that investors take informed decisions. “If your business model is woven around a black box, which is not open to sunlight or cannot be audited or validated, it cannot be allowed,” she said.
If your algorithm claims a 350 percent return in one year, it needs to be verified, Buch added.
Anonymity: Anonymity in the financial world is an absolute no-no and it should be the first guiding principle for companies, the SEBI chief explained, adding that startups must build on credible data.
Simplicity of exit: Quoting Abhimayu from Mahabharat, Buch said, “We don’t want ‘Abhimayus’ in the market. Ek baar bakra aa gaya toh usko bahar jaane nahin denge.” The SEBI chief further emphasized that such business models will not be encouraged.
Customers should be able to exit as easily as they entered your ecosystem. Building barriers to going out to customers is unlikely to find favor with us, she told innovators and investors.
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Financial inclusion: SEBI will be supportive if a fintech’s business model facilitates financial inclusion, Chairman Buch emphasized during the event.
“If startup founders keep these principles in mind, they won’t get a rude shock from regulators,” Buch concluded.
