Fintech industry hails DPDP Bill, says it will promote innovation, trust

The Digital Personal Data Protection (DPDP) Bill, which was recently passed by the Rajya Sabha after being cleared by the Lok Sabha, is a significant step towards safeguarding the privacy and security of digital data in India. It aims to establish a robust framework for data protection, enhance user trust, and promote a thriving digital economy.

Talking to Bizz Buzz, Anand Kumar Bajaj, Founder, MD & CEO, PayNearby, a branchless banking and digital network, said: “As data's role in fostering an inclusive fintech landscape gains prominence, the bill's lucid outline of rights and responsibilities is commendable. It champions data protection, underscores lawful processing, and shapes a resilient, customer-centric ecosystem. For businesses, it harmonizes innovation with user rights, propelling accountability and opportunity in the digital age. Especially in light of our rural-focused business model, it reaffirms our dedication to banking services while upholding privacy and empowerment.” The DPDP Bill strikes a vital balance, safeguarding user rights and fuelling digital innovation. This legislative stride bolsters our mission, empowering rural communities through accessible financial services, he said.

For a thriving digital economy built on trust, transparency, and inclusivity, legitimate access to customer data is paramount, especially in the realm of digital payments.

Mandar Agashe, Founder, Founder & MD, Sarvatra Technologies said, “Upholding both the individual data protection rights and the imperative of lawful data processing, this legislation reinforces our belief in cultivating a resilient, customer-centric payments ecosystem."

Its business-friendly provisions, including the removal of criminal penalties for non-compliance and facilitating seamless international data transfers, signal progress towards a new era. Furthermore, the bill’s commitment to comprehensive rights for data principals establishes the cornerstone of a transparent and responsible data governance framework.

Rahul Tandon, Chief Product Officer, Safexpay, a global payments and banking solutions provider said, “We are resolutely committed to navigating these changes, ensuring that the privacy, empowerment, and financial well-being of our customers remain at the forefront of our mission.”

While some businesses had already began preparing themselves for the new set of compliance, it could be complex for some players to implement the guidelines. Kumar Shekhar, Deputy Country Manager, Tide India said: “There can also be increased cost of implementation and compliance and requirement for additional resources and awareness. However, in the long run, these norms will foster culture of vigilance and trust among all the stakeholders.”

Until now the data gathering practices lacked transparency and users had little control over data collection. With the data protection bill addressing this information asymmetry and explicitly articulating that the right to data ownership rests with individuals, it offers them the final decision-making authority. This means that consumers will now have the ability to decide how entities access and process their personal information, including correction and deletion of any data.

Abhishek Kothari, Chief Executive Officer, Pepper Money India said, “I believe that regulated institutes will have an advantage and will only need to add a layer to their existing compliance, but it will not fundamentally change the way they operate. While this may imply a marginal increase in operational expenditure, these are practices that will help increase the long-term value creation of the business.”

Further, as the bill entails that entities seek consent from legal guardians before processing the personal data of a child, a challenge that I see facing the larger fintech industry is age verification for products that do not require KYC. I also see another challenge around the retention of consumer data only as long as it serves the intended purpose. However, user data holds lifetime value for most businesses, especially fintech, and the intent is to continually cross-sell products to the entire household, rather than just the individual. So, more layering and definition will be required to ensure the implementation of the regulation in a seamless way. In a nutshell, this bill is a step in the right direction and will promote better data protection practices while creating a safer digital environment for customers, he said.

The Bill is a positive step towards building ‘Digital Trust’ across the country which in turn will enhance digital adoption.

Anil Srinivas Tadimeti, Head of Strategy and Operations at Bureau said, “Provisions like rightful usage and erasure along with grievance redressal provide control to Data Principals aka users and enable trust.” At the same time, the bill indicates possibilities of exemptions to certain classes of Data Fiduciaries, including the entities seeking personal data from users, startups and permits cross-border data transfers, he added.