scorecardresearchTokenisation is key to maintaining customers’ trust, says Sugandh Saxena

Tokenisation is key to maintaining customers’ trust, says Sugandh Saxena of FACE

Updated: 26 Jul 2022, 08:11 AM IST
TL;DR.

She says we need regulations that keep customers’ well-being at the centre not just passive tick-box protection but proactive one to meet customer expectations and better outcomes

Sugandh Saxena said the industry needs a conducive regulatory environment to innovate, certainty and clarity on regulation and a level-playing field for competition

Sugandh Saxena said the industry needs a conducive regulatory environment to innovate, certainty and clarity on regulation and a level-playing field for competition

The Reserve Bank of India (RBI) last month directed non-bank PPI issuers that the master directions relating to prepaid payment instruments do not permit the loading of these instruments from credit lines. Such practice should be stopped immediately, directed the banking regulator.

The notification is seen to hurt the fintech players who were giving credit lines on prepaid cards. On this, we caught up with Sugandh Saxena – CEO of Fintech Association for Consumer Empowerment (FACE). She says this will not dissuade consumers from embracing newer innovations in the fintech space.

While sharing her insight on the need to maintain security, she said a survey recently conducted by FACE has indicated that over a third of customers choose a lending app based on the data-type access and security offered by the platform.

Edited excerpts:

The RBI recently directed prepaid payment issuers (PPIs) not to load their wallets and cards from credit lines. Do you think this move will discourage consumers to embrace newer innovations in the fintech sector?

I don’t think so. From the credit perspective, a large many customers have diverse and fast-evolving needs for credit in many different ways, including size, tenure, repayment option, ease/convenience, purposes and channels to access credit. These can only be fulfilled through an innovative and competitive marketplace. If an innovation meets a customer's need, they will embrace it.

There is a growing concern among consumers that their data is not secure with online merchants and card companies and is prone to be misused. Do you think tokenisation — set to be rolled out after September 30 — will be the right step in this direction?

Indeed. It is great to see customer awareness, demand and expectations on privacy/safety and security for data. A recent survey by FACE (to be published soon) amongst customers showed over a third of customers factor data-type access and safety/security in choosing a lending app. To maintain customer trust in digital financial services, regulatory steps like tokenisation are absolutely vital.

Although some fintech start-ups offer credit cards but customers tend to place more trust on the cards issued by commercial banks. What future do you see of these cards issued by the fintech companies?

We see customers’ demand for credit-card, and fintech NBFCs very well intend to offer credit-cards with regulatory approval as issuers and co-branded entities.

Do you think we have adequate checks and balances to regulate the companies operating under fintech sector? If not, what kind of regulatory framework do you envision that can enable this sector to grow and prosper?

We need regulation which keeps customer well-being at the centre not just passive tick-box protection but proactive one to meet customer expectations and better outcomes. The industry also needs a conducive regulatory environment to innovate, certainty and clarity on regulation and a level-playing field for competition.

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First Published: 26 Jul 2022, 08:11 AM IST