Ramkumar is a seasoned technology leader with over 26 years of experience in ad tech, big data, e-commerce, and database technology across multiple geographies. With a deep passion for scalability, quality, and sustainability in technology, Ramkumar has secured patents in distributed systems. He has held leadership positions at top organizations like Oracle, Yahoo, Informatica, MIQ & Jivox.

In the world, India is one of the fastest-growing FinTech markets, with over FinTech startups and significant investments from international markets. It is recognized as the third largest FinTech economy. The availability of capital, government support, and regulatory flexibility also play crucial roles in fostering the growth of the FinTech sector. India has experienced remarkable advancements in internet and mobile access due to technological progress. Modern FinTech companies are reshaping India into a more digitized nation with a wider reach. Notably, even tier and tier cities are embracing the FinTech revolution, shaping the future of financial services in India.

In conversation with Ramkumar Venkatesan, Chief Technology Officer, Cashfree Payments

What factors do businesses consider while developing ethical policies in fintech, especially in data handling and privacy? What guides and policies are needed to ensure technology is properly used?
In the fintech industry, where data is a central component of operations, businesses must carefully consider several factors when developing ethical policies, particularly concerning data handling and privacy. One critical factor is the sensitivity of the data involved. Personal Identifiable Information (PII) and financial data are highly sensitive and require rigorous protection to prevent misuse and unauthorized access. Additionally, regulatory compliance plays a significant role.

Adhering to regulations such as India’s Digital Personal Data Protection Act is essential to ensure that data handling practices meet legal standards and avoid potential penalties but also ensure that businesses respect individual data rights. The DPDP Act is particularly significant as it empowers individuals, known as data principals, by granting them rights over their data, including the ability to access, correct, or delete it. This ensures that businesses respect user autonomy and control over their information, reinforcing trust in how data is handled.

Businesses should prioritize data anonymization whenever possible, collecting and storing only anonymized data if person-specific details aren’t necessary. This reduces exposure risks while allowing valuable insights to be drawn, aligning with data minimization practices and enhancing privacy protection.

Customer trust is another crucial consideration. Building and maintaining trust hinges on transparency, obtaining consent, and ensuring accountability in how data is managed and used. This requires clear communication with customers about how their data is collected, used, and protected. Furthermore, addressing technological limitations is vital. As technology evolves, so do potential security threats, making it imperative for fintech companies to continuously update and strengthen their data protection measures.

To guide ethical practices in data handling, fintech companies should adopt several key principles. Data minimization is essential, meaning companies should only collect the data that is necessary for their operations. Purpose limitation ensures that data is used solely for its intended purposes, and data accuracy is critical to maintaining information that is correct, complete, and up-to-date. Robust data security measures must be implemented to protect data from breaches and unauthorized access.

Additionally, companies should have a clear plan for data breach notification, which involves promptly informing customers and regulators in the event of a data breach. Establishing data retention policies helps manage how long data is kept and when it should be securely disposed of. Privacy impact assessments should be conducted to identify and mitigate risks associated with data handling practices.

Lastly, ongoing employee training on data protection and privacy is crucial to ensure that all staff members are aware of and adhere to the company’s ethical policies.

How can the CTOs ensure that fintech products and services are designed and developed with compliance in mind, from inception to the delivery phase to reduce the risk of regulatory violations?
A CTO plays a key role in ensuring fintech products and services adhere to regulatory standards. To reduce the risk of regulatory violations, it's important to integrate compliance considerations throughout the product development lifecycle, from inception to delivery.

A proactive approach to compliance involves starting with early impact assessments to understand how regulations might affect the product. Maintaining an up-to-date map of relevant regulations and establishing a dedicated compliance committee can provide valuable oversight and guidance. Additionally, leveraging technology can enhance compliance efforts. Tools such as AI-driven monitoring, blockchain for transaction transparency, and advanced data privacy solutions can all contribute to better regulatory adherence.

Training and raising awareness among employees are also crucial. Providing thorough training and regular awareness campaigns helps ensure that staff understand their compliance responsibilities and contribute effectively to meeting regulatory requirements. Managing third-party risks is another important aspect. It’s essential to conduct thorough due diligence on vendors and include strong compliance clauses in contracts to mitigate risks from external partners.

Lastly, continuous monitoring and improvement are vital. Regular audits and reviews, along with staying informed about regulatory changes and industry trends, help ensure that FinTech products and services remain compliant throughout their lifecycle. By taking these steps, CTOs can better safeguard their companies from potential regulatory issues and maintain high standards of compliance. Companies can turn compliance into a competitive advantage. If technology is used to govern compliance requirements, then the cost of compliance comes down thereby providing a competitive advantage. Additionally, if these can be productized and sold to other companies that need compliance solutions, then one can convert a cost into a profit.

Cashfree Payments recently launched Secure ID, can you elaborate on the tech behind this offering?
Cashfree Payments’ Secure ID is a robust end-to-end solution tailored for identity verification, risk assessment, and fraud prevention, designed to enhance security while significantly reducing operational costs for businesses. We have built Secure ID, to help businesses navigate the complex regulatory environment today and are very adept at evolving with the changing framework

The platform boasts impressive operational metrics, having processed over 100 crore verification transactions and prevented frauds worth more than Rs. 50 crore. Secure ID efficiently handles over 10 crore verifications daily, maintaining a success rate exceeding 99 percent and ensuring 100 percent uptime. It aims to reduce operational costs by up to 75 percent, minimize fraud losses by up to 70 percent, and achieve higher conversion rates by up to 50 percent.

Secure ID employs advanced technology, including NLP-based Optical Character Recognition (OCR) and selfie verification with liveness checks, to enhance user verification security. Device intelligence supports these features, while AI and machine learning enable adaptive solutions such as bank statement analysis and risk scoring. AI-driven fraud detection algorithms effectively identify suspicious activities and anomalies.

The platform integrates identity verification, risk assessment, and fraud prevention into a unified system, offering data-driven insights for informed decision-making and continuous risk monitoring. With cutting-edge AI and Language Models (LLMs), Secure ID delivers a seamless experience by optimizing onboarding, data verification, and fraud detection processes.

What is the role of modern tech like AI and LLM in identity verification and fraud detection?
AI and LLMs have emerged as indispensable tools in combating this growing challenge. AI's ability to analyze vast datasets in real time enables it to identify subtle patterns and anomalies indicative of fraudulent activity. From transaction history to user behavior, AI can detect suspicious activities that may otherwise go unnoticed.

LLMs, on the other hand, excel at document verification. By analyzing text and images within documents, they can identify inconsistencies and potential forgeries, safeguarding against identity theft and other fraudulent schemes. Behavioral biometrics, powered by AI, can monitor user behavior patterns such as typing speed, location, and login times. Deviations from established patterns can flag potential fraud attempts, providing an additional layer of protection.