New Delhi, Mar 20 (KNN) In a recent discourse at Startup Mahakumbh, India's premier showcase of the startup ecosystem, industry insiders emphasised the critical balance fintech startups must maintain between regulatory compliance and consumer-centric innovation to thrive in today's landscape.

Investors and entrepreneurs highlighted the pivotal role fintechs play in addressing consumer needs, underscoring the necessity of adhering to regulations, especially in light of recent actions by the Reserve Bank of India (RBI) against non-compliant entities.

Siddharth Pai, partner at 3one4 Capital, stressed the significance of acknowledging and embracing regulations while simultaneously catering to consumer demands, reported FE.

He emphasised that fintech companies serving as intermediaries between consumers and the financial system must prioritise regulatory compliance to foster trust and sustainability.

This sentiment resonates particularly strongly as Paytm's Payment Bank, one of India's leading fintech startups, faces regulatory scrutiny, resulting in restrictions on its transactions due to compliance shortcomings.

Harsh Jain, co-founder of Groww, echoed the importance of aligning with regulators and government mandates to drive innovation responsibly.

He emphasised that sustainable innovation requires a long-term commitment to industry-wide transformation rather than merely achieving product-market fit.

However, fintech startups encounter challenges beyond regulatory compliance, including navigating a tough funding environment.

Despite remaining among the top-three funded sectors, the fintech industry witnessed a decline in fundraising activities in 2023 compared to the previous year, signalling a need for resilience and adaptability amidst market fluctuations.

While the road ahead may present obstacles, fintech startups have the opportunity to thrive by striking a delicate balance between regulatory adherence and consumer-centric innovation.

By embracing regulatory frameworks as catalysts for responsible growth and leveraging innovative solutions to address evolving consumer needs, fintech companies can chart a course towards long-term success in India's dynamic startup ecosystem.

(KNN Bureau)