In his address at the , Malhotra said that ultimately it is trust in the financial system that creates adoption and endurance that will lead to a transformational impact.
“Every in this room holds something which is much more valuable than the capital and that is the data. This data must be treated the way a trustee treats assets held for a beneficiary, collected with a clear purpose and used strictly within the consent provided, and protected as though it was one’s own,” Malhotra said.
He reiterated the risks while adopting artifical intelligence (AI) like bias, exclusion, cyber security, data privacy and erosion of human judgement.
“Where a firm treats consumer data as a monetizable asset first, and a responsibility second, trust erodes, and once it does, as mentioned earlier, it does not return,” he said.
Malhotra said financial institutions must take systemic responsibility that scales with size. “Many fintechs may be outside the perimeter of prudential regulation, and rightly so, since proportionate regulation should not burden early-stage innovation. But as firms’ payment volumes, lending book, or user base grows to a point where its disruption could meaningfully affect the financial system, that firm has a responsibility, and that responsibility goes beyond the balance sheet of the firm,” he said.
He described this as the obligation to be not just too big to fail, but “too significant to be careless.”
“Operational resilience, business continuity, and cyber security are not burdens or costs to be minimized. They are the price of the scale a firm has achieved,” Malhotra told a room full of bankers, fintech executives and regulators.
He cautioned against a mindset of structuring a business around the gaps between regulatory categories of scaling first, and seeking clarity on forgiveness later.
“The sandbox and pilot mechanism that we have built exists precisely so that the innovators can engage with us early, ask questions, test assumptions under supervision, and shape rules that are workable for genuine innovation. A firm that engages transparency not just earns the regulatory goodwill, but also a faster and more durable path to scale,” he said.
He said firms that outrun the rules typically find that the rules catch up at a much higher price to itself and to the trust of the consumers themselves.
Malhotra said India’s fintech ecosystem today ranks third globally by funding having attracted $2.4 billion last year and is home to 30 unicorns.
He said that many emerging economies face challenges which are similar to India’s. “As a result, our solutions for financial inclusion, affordable payments, digital identity, interoperable infrastructure, and trusted innovation can be appropriately repurposed for wider global adoption. Our greatest contribution will therefore lie in exporting products, sharing approaches, public digital infrastructure, governance frameworks, and institutional experience,” Malhotra said.
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