The Impact Of Fintech Disruption On Consumer Protection In India: A Critical Analysis
- IJLLR Journal
- Mar 24
- 2 min read
Vamshi Krishna Kusuma, School of Law, CHRIST (Deemed to be University), Bangalore
ABSTRACT
The surge of innovation in financial technology (FinTech) has foundationally transformed the landscape of financial services, ushering in dynamic layers of convenience, accessibility, and outreach. FinTech innovations have harnessed modern paradigms, including mobile payment systems, peer-to- peer lending, blockchain stock market solutions and AI-powered advisory services. FinTech has disrupted traditional banking and financial solutions, highlighting critical shortcomings in statutory regulation. Such disruption threatens financial and institutional harm to multiple stakeholders, including investors, start-ups, employees and most importantly, consumers availing FinTech products and services. Legal frameworks and regulatory systems that traditionally safeguarded consumers are now troubled by novel threats and risks in the sector, made worse by the complexities of the technological field.
Within the evolving environment of FinTech, it becomes imperative to strike a balance between fostering innovation on the one hand and maintaining adequate consumer protection on the other. Innovations in the FinTech sector are critical during the current global race for AI-integrated technological services. The promise of robust technological solutions for financial services must be countered with a balancing enhancement of regulatory frameworks that curb new risks and vulnerability. The insights derived from this analysis will contribute to the broader discourse on how better legal structures can serve to protect consumers henceforth under a surge of FinTech innovations and its consequent development.
This paper critically analyses the impact of FinTech disruption on consumer protection, lacunae, and ways forward in the sector's consumer-centric regulation. By examining key developments in the FinTech sector and analysing ideal frameworks, the paper aims to highlight various legal and economic implications on consumer rights and safety. More effective oversight becomes necessary by addressing gaps and tensions in current regulatory approaches. In summary, the paper conducts a doctrinal study of the existing framework, highlighting its implications on consumer protection and the way forward.
