In a significant policy advisory, the Department of Financial Services (DFS) Secretary Dr. Vivek Joshi has urged that the fintech sector must focus on financial education and consumer protection. Speaking at the Global Fintech Dialogue 2025 held in New Delhi, Dr. Joshi emphasized that while innovation is essential, trust is non-negotiable in financial services.
The remark comes at a time when the Indian fintech sector is witnessing exponential growth, with over 11,000 startups and a projected market size of $150 billion by 2026.
Fintech Sector Growth Brings Responsibility
The fintech sector in India has transformed the way people transact, borrow, invest, and insure. From UPI transactions crossing ₹18 lakh crore monthly to neo-banks and embedded finance shaping the future, digital finance has touched nearly every citizen.
But along with this success, concerns around data privacy, financial literacy, and frauds have also risen. The DFS Secretary stated:
“The fintech sector must focus not only on innovation but also on customer understanding. A financially aware user is an empowered user.”
Key Points Made By DFS Secretary
1 Focus on Financial Education
The fintech sector must invest in programs that teach users:
- How to protect their OTPs and PINs
- How to identify phishing or scam attempts
- Why reading loan terms is critical
- Safe practices while using digital wallets or apps
The DFS recommends integrating financial literacy modules in vernacular languages directly into fintech apps.
2 Strengthen Consumer Protection
The fintech sector must proactively adopt:
- Clear grievance redressal systems
- Transparent loan agreements
- RBI’s Digital Lending Guidelines
- Real-time fraud detection alerts
Dr. Joshi highlighted that “Consumer first” must be the sector’s north star.
Why Fintech Sector Must Focus on Compliance
Regulatory bodies like RBI, SEBI, and IRDAI are closely watching the fintech sector due to rising customer complaints. In the last financial year:
- 3.1 lakh complaints were filed across digital lending apps
- ₹1,100 crore was lost in UPI scams
- Only 60% of apps followed proper KYC norms
To maintain public trust and attract global investment, the fintech sector must focus on self-regulation and transparency.
DFS Recommendations for Fintech Sector in 2025
The following policy suggestions were put forward to help the fintech sector focus on balanced growth:
| Policy Suggestion | Goal |
| Financial education via gamification | Engage Tier 2/3 users effectively |
| AI-driven fraud analytics | Detect real-time transaction anomalies |
| Unified grievance redress portal | Allow cross-platform complaint resolution |
| Data privacy certifications | Build customer trust through transparency |
| Regulated influencer promotions | Avoid mis-selling through social media |
Industry Reactions: Fintech Sector Responds
Top industry voices have welcomed the statement.
Naveen Surya, Chairman, Fintech Convergence Council:
“We agree — the fintech sector must focus on consumer trust. Tech is an enabler, not a substitute for education.”
Radhika Gupta, MD & CEO, Edelweiss AMC:
“Inclusion must be responsible. The fintech sector’s focus should be on building literacy as much as liquidity.”
India’s Fintech Sector: Key Stats in 2025
- Over 87 crore UPI users
- Fintech funding in H1 2025: $4.3 billion
- 38% of rural youth now use at least one fintech app
- India ranks #3 globally in fintech adoption
But also:
- 63% of Tier-2 users lack credit knowledge
- 1 in 3 users can’t distinguish between bank apps and fraud apps
Hence, fintech sector must focus equally on education and protection.
Government’s Role in Supporting the Fintech Sector
The Ministry of Electronics and IT (MeitY) and DFS are rolling out:
- Digital India Trust Campaigns
- Co-branded programs with RBI and NCFE (National Centre for Financial Education)
- Grants for AI-powered educational tools in fintech
The fintech sector is also encouraged to participate in FinLit Challenges to develop innovative education content.
Best Practices for Fintech Sector Going Forward
- Include an educational tutorial before onboarding
- Display loan interest rates and repayment plans clearly
- Alert users before each auto-debit or hidden charge
- Offer multilingual helpline support
- Adopt Biometric Authentication where possible
The fintech sector must focus on creating not just digital products, but digitally aware customers.
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