Digital lenders are bumping up spending on technology to prevent cybercrimes and protect customer data as their services become popular, ‘Financial Express’ (FE) reported.
The Reserve Bank of India (RBI), in guidelines issued in 2022, asked banks and non-banking lenders to ensure compliance with various technology standards related to cybersecurity, the report added.
“Data will be the new gold for next generation. So, it is super important to ensure that it is protected because now people are more conscious about data sharing,” Credit Wise Capital founder Aalesh Avlani was quoted as saying in the FE report.
“As a fintech, we are responsible for providing loans to people across the country as we are in a consumer-facing business. So, we have to ensure that we are right up there when it comes to ensuring data protection,” he added.
“There are a couple of reasons for this. Firstly, you are in a lending business regulated by the RBI. So, you are under strict watch. You do not want to give the RBI any reason to sniff you out. If a customer takes a loan from us for the first time and there is a breach in data, I have scarred this customer from ever taking a loan from us again,” he said, FE reported.
A recent survey by Fintech Association for Consumer Empowerment found that the threat to data privacy and cybercrimes are among the biggest risks for digital lending. Both lenders and non-lenders were a part of the survey.
The report added that some lenders have partnered with external entities and ethical hackers to ensure that their data and information technology systems are safe.
“We have started spending significantly on data security, information security and different compliances that we need to adhere to,” said Animesh Sharma, chief technology officer at Indifi Technologies.
His company is “planning to spend Rs 7.5 million next year on information technology”, the report said.
“So far, we have seen a 50% increase in hosting charges, 30% increase in information security compared with last year. We are expecting 50-60% further increase next year in light of compliance with the Reserve Bank of India (guidelines),” Sharma said, according to FE.
