The Fintech Association for Consumer Empowerment (FACE), the only self-regulatory organisation for financial technology/fintech (SRO-FT) companies, is aiming to secure membership from at least 75 per cent of players across all key fintech categories within the next three years, according to a senior executive.
The total number of members in the organisation has increased to 110, up from around 60 when it received approval from the Reserve Bank of India (RBI) to operate as an SRO-FT in August.
“More than one-third of our members are now beyond just the lending category.
"Our goal is to be representative across different fintech sectors. For example, in lending tech, there are 300 companies, and we aim to have 75 per cent of them as members in three years,” said Sugandh Saxena, chief executive officer of FACE, in an interaction with Business Standard.
The organisation, which initially provided memberships exclusively to fintechs in the lending space, has expanded its scope to include participants from associated domains such as account aggregator non-banking financial companies (AA-NBFCs), regulatory technology (regtech) firms, peer-to-peer (P2P) NBFCs, and others.
An SRO is a non-governmental organisation that acts as a bridge between industry players and regulators, setting standards for the conduct of entities operating in the country.
“From an SRO-FT perspective, the overarching goal is to unite non-regulated entities.
"Some fintechs, like AA-NBFCs and P2P-NBFCs, are regulated.
"However, as an SRO-FT, we must ensure that the majority of our members are non-regulated fintechs,” she added.
Saxena also said that the organisation plans to establish three working committees by the end of the next quarter to oversee various operational elements of the SRO-FT.
“To operationalise the SRO-FT framework with sound governance and a holistic ecosystem perspective, we propose three core committees.
"The first will focus on standards and guidelines for members.
"The second will address oversight and enforcement mechanisms.
"The third will handle dispute resolution and redress,” she explained.
One of the major focus areas for the SRO-FT includes better communication among members related to conversations around compliance and regulation.
“As an SRO-FT, it is our duty to convey the right information to our members in line with regulatory objectives.
"The key is ecosystem engagement, building trust with members, and improving market conduct in line with compliance and regulatory requirements," she added.
The need to streamline the fintech sector in India has become more urgent as the country is home to about 10,244 fintech entities, according to data from the Ministry of Finance.
However, Saxena underscored the importance of monitoring how many of these entities are active, noting that much of the identification of fintechs has relied on self-classification.
“It’s an ongoing task to understand how many of them are truly active. This will be part of our work over time,” she said.
Earlier this year, the banking regulator issued a final framework for recognising SRO-FTs, encouraging entities to secure representative membership from the fintech sector.
The RBI indicated that more than one SRO-FT may exist, and fintech firms would be encouraged to participate in at least one.
