RBI flags speed, concentration and opacity risks in fintech adoption
RBI Deputy Governor Rohit Jain called for stronger safeguards around emerging technology at Mumbai’s Global Fintech Fest, highlighting rapid deployment, vendor concentration and opaque models as key risks for financial institutions, payment systems and merchants.
What happened
Reserve Bank of India · RBI Deputy Governor Rohit Jain called for stronger safeguards as financial institutions adopt emerging technology, flagging risks from
Key facts
- Three key technology risks: speed, concentration and opacity
Why this matters
Acquirers and partners should assess target exposure to single vendors, opaque AI or risk models and regulatory remediation needs before pursuing payments-led deals.
What to watch
- RBI circulars or speeches on outsourcing, cloud concentration, AI/model governance, operational resilience or payment-system audits.
- New reporting requirements for material technology incidents, outages, cyber events or third-party failures.
- RBI scrutiny of UPI participant resilience, payment aggregator compliance, fraud controls or merchant onboarding practices.
- Major downtime or fraud incidents involving a dominant cloud provider, UPI app, payment gateway, KYC vendor or fraud-tech platform.
- Banks and large acquirers adding contractual requirements for auditability, source/model documentation, data residency or multi-vendor resilience.
- Consolidation activity among payment aggregators, fraud vendors, regtech providers and cloud-managed-service partners.
- Map critical payment, cloud, KYC, fraud, tokenization and AI vendors; identify single points of failure and concentration exposure.
- Require vendors to provide audit rights, subcontractor disclosure, incident-notification SLAs, data-location controls and tested exit/portability plans.
- Establish merchant-facing fallback processes for payment outages, including alternate acquirers, offline acceptance procedures and customer communication playbooks.
- Create model inventories for fraud, credit, pricing and customer-service automation, with documented inputs, decision logic, human escalation and bias/performance monitoring.
- Budget for higher compliance, cyber-resilience and third-party-risk costs; reassess fintech partners that cannot demonstrate governance maturity.
- Prioritize providers with transparent uptime metrics, regulator-ready documentation, strong dispute handling and interoperable payment-routing capabilities.