RBI Deputy Governor Rohit Jain flags speed, concentration and opacity as fintech risks; says technology must serve customers

Mumbai: Reserve Bank of India (RBI) Deputy Governor Rohit Jain Wednesday stressed the need for financial institutions and fintechs to focus on the ‘human’ angle to boost technology adoption, underscoring user centricity for the success of financial innovation during his address at the Global Fintech Fest (GFF) in the commercial capital.

In discussions about algorithms, tokens, platforms, cloud infrastructure and quantum computing, institutions must not forget that there is always someone at the other end of the technology, Jain told the audience.

"Most customers will never know which model made a recommendation, which cloud hosted it or which technology enabled a transaction. They will, however, experience the outcome,” Jain said. “Their confidence in technology will ultimately depend not on how sophisticated it is, but on whether it works for them fairly, reliably and safely."


The objective should not merely be to make finance faster or smarter, but to ensure that technological progress makes finance more useful, resilient and responsive to those it serves.

"Every technological wave we spoke about at the beginning expanded the range of what human beings could do. The opportunity before us is to ensure that this wave expands not only what finance can do, but also what finance can do better for those it serves. If we can achieve that, emerging technology will have served not merely innovation, but the larger purpose of finance itself," said Jain.

As RBI deputy governor, he is in charge of financial markets regulation, foreign exchange, fintech and risk monitoring.

He highlighted three key concerns as technologies become deeply embedded in finance: speed, concentration and opacity.

"At machine speed, resilience cannot depend only on preventing every error. Institutions must also be able to detect problems early, contain their effects and intervene before a small mistake becomes a much larger one," Jain said.

He also said that dependence of financial institutions on a relatively small number of cloud providers, technology vendors and model providers could create the possibility that a common dependency could transmit disruption or error across many institutions at the same time.

He listed opacity as the third concern.

"An institution may outsource the computation, but it cannot outsource the consequence. A customer affected by an important financial decision deserves something more meaningful than being told that “the model said so," he said.

At the GFF, Jain launched an expanded FX Retail platform to include multiple currencies besides the US dollar.

Customers can purchase foreign currency, remit money overseas and reload a forex card with Euro (EUR), British Pound (GBP), Canadian Dollar (CAD), Swiss Franc (CHF) and UAE Dirham (AED) through multiple banks.