Finance Minister Nirmala Sitharaman has called on India's fintech companies to develop innovative solutions to combat the rising tide of digital arrests, cyber fraud, and other forms of financial exploitation. Speaking at the Digital Payments Awards 2025 Ceremony on Wednesday, June 18, 2025, Sitharaman lauded the success of fintech in promoting financial inclusion and extending payment systems to remote areas of the country, but cautioned against emerging threats like deepfakes and sophisticated cybercrimes.
Sitharaman highlighted the urgency for fintech startups to create solutions that protect citizens from digital arrests and prevent fraudulent fly-by-night operators from stealing their money. She emphasized the damaging impact of deepfakes and the need for fintech companies to continuously develop solutions for new challenges. According to a report, the Indian Cyber Crime Coordination Centre (I4C) has already restricted over 1,700 Skype IDs and 59,000 WhatsApp accounts used in digital arrest scams, preventing losses exceeding ₹3,431 crore across more than 994,000 complaints.
The Finance Minister urged the fintech sector to expand digital lending to the Micro, Small, and Medium Enterprises (MSME) sector. She also expressed her belief that Indian fintech innovations have the potential to become global public goods, benefiting both emerging and developed economies. She noted that international merchant payments through UPI are now accepted in several countries, including Bhutan, France, Mauritius, Nepal, Singapore, Sri Lanka, and the UAE, and encouraged Indian firms to export their successful models abroad to capture global markets. The Indian fintech market is projected to exceed USD 400 billion by 2028-29, reflecting an anticipated annual growth of 30%.
Several strategies can be employed to mitigate the risks of digital fraud. Multi-factor authentication, biometric verification (fingerprints, facial recognition, voice recognition), tokenization, and end-to-end encryption protect financial data at every transaction step. Real-time transaction monitoring, using AI and machine learning, can detect anomalies and flag suspicious activities.
Many fintech companies are already developing AI-powered solutions to proactively protect businesses from fraud. These solutions analyze data instantly, providing fraud scores to detect and respond to fraudulent activities quickly, employing techniques like device fingerprinting and behavior analysis to detect anomalies.
Collaboration between fintech players, regulatory bodies like the Reserve Bank of India (RBI) and the National Payments Corporation of India (NPCI), and cybercrime cells is also crucial in creating a safer digital finance environment. Initiatives such as Digital Payments Awareness Week and the RBI's Digital Literacy Campaign, along with tighter KYC norms, are examples of such collaborations.
