Union Finance & Corporate Affairs Minister Nirmala Sitharaman on Tuesday said cryptocurrencies (crypto), drug mafias, tax havens and cyber threats among others posed major threats to the global financial ecosystem and a global collaborated effort was needed to counter such challenges.
“We should be well seized of the threats which are conventional warfare or border threats and other threats such as cyber threats, crypto threats, as far it is an opportunity it is a threat. Also threats of drug, drug wars and drug mafias, tax havens, round tripping of resources and tax evasions. We need to work on all these so that we can address them,” Ms. Sitharaman said while addressing delegates at the Global Fintech Fest (GFF) 2023 which is underway in Mumbai.
She said understanding these global challenges would help in building a responsible, inclusive, resilient and sustainable financial ecosystem.
Urging the fintech industry to guard against these threats, the minister asked these firms to invest heavily to counter cyberthreats.
“Security remains a very big concern.... it comes along with cyber security threats. So, we need to have fintech companies invest heavily in robust security measures utilising advanced encryption and other measures to protect user data and financial transactions. A secured system is what will build trust and therefore it is a must for the financial ecosystem,” she said.
“India can lead in making the financial ecosystem inclusive, resilient and sustainable. We have the tool but we have to make it responsible. That is why we need global cooperation,” she added.
Emphasizing that India’s priority was to have an enhanced cross-border payment arrangement considering the volume of remittances to the country, she said one of the priority areas for the G20 under India’s presidency was information sharing and seeking cooperation.
“In India’s G20 Presidency we have sought global cooperation and collaboration in the areas where we have continued challenges. India has put on table issues relating to regulation and undertaking a framework for handing issues relating to crypto assets. Active discussions are happening,” the minister said.
She said consultative papers were being discussed on various issues. On crypto, International Monetary Fund (IMF) and Financial Stability Board (FSB) have released their synthesis papers on crypto, she added.
Underlining the important role of the fintech industry in building a responsible, financial ecosystem, she said fintechs in India were driving more inclusion and influencing India’s financial ecosystem.
“Today, fintech has become a robust and dynamic financial inclusion tool. According to a 2022 BCG Matrix Report, in lending, which is one of the core businesses of the banks, fintechs had 36% share of new-to-credit customers versus the 22% share of brick-and-mortar banks. Fintechs are reaching out far more even in lending, an area which is a conventional bank function,” Ms. Sitharaman said.
