DIGITAL PARADOX: STRIKING A BALANCE BETWEEN FINTECH INNOVATION AND LEGAL SAFEGUARDS
- NLR Journal
- 5 days ago
- 2 min read
By Parth Verma & Kartik Tripathi, School of Law, CHRIST (Deemed to be University), Bangalore.
Abstract
In this evolving digital landscape, the area of Financial Technology has been expanding at an unprecedented rate, bringing specific positives and some grave concerns. While FinTech Companies utilize advanced technologies to offer their innovative financial services, they consequently collect a significant amount of the user's sensitive personal data, which raises significant legal and ethical concerns. This paper aims to explore the complex relationship between FinTech innovations and the current legal framework in India and subsequently provide pragmatic solutions towards a more sustainable FinTech ecosystem. It stresses the need to explore the overall impact of emerging technologies, such as artificial intelligence, in strengthening data security and their challenges through Doctrinal Methodology involving an in-depth study and analysis of the statutory framework in India that governs the FinTech sector. It will also involve a comparative study of the regulatory landscape in other developed countries, such as the General Data Protection and the EU AI Act 2024, which provide stringent data handling and protection standards. Finally, the paper aims to delve into data mining and storage mechanisms for sensitive raw data accessed by the FinTech giants to prepare their sales and marketing strategies. Particular emphasis shall be placed on ensuring informed consent on the part of users, thereby facilitating the incorporation of data protection principles. The study's key finding has been that there is a critical need to balance innovation with security protocols. Hence, there is a need to advocate for continuous legal and regulatory advancements to stay abreast of technological progress, ensuring that FinTech innovations are achieved without jeopardizing consumer privacy and data security.
Keywords: Artificial Intelligence, Data Protection, Data Security, FinTech, Regulatory Framework.
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