Hello everyone, 

Welcome to the 64th edition of The Pattern, a weekly newsletter where we untangle the latest rumblings from the world of finance, technology, and the economy. Let’s get started!

A few weeks ago, in the 59th edition, I’d written about the Finance Minister’s warning against blindly trusting social media ‘fin-fluencers’ - many of whom are simply lifestyle influencers who dispense financial advice as part of a brand partnership.

However, it now looks like the RBI isn’t planning to crack the whip on them just yet - largely because SEBI is already watching them like a hawk. The regulatory body for the stock and commodity markets has been mulling action since January 2022, and while there have been no official recommendations, it has been taking action where required.

For instance, last month, it imposed a hefty fine on influencer PR Sundar for alleged violations of investment advisor norms. The YouTuber paid a fine of INR 6.5 crores and accepted a year-long ban from the market.

Is this enough though, or are strict guidelines required? I ask this because according to this CNBC TV article , certain fin-fluencers are attempting to escape SEBI’s spotlight by  partnering with smaller research analysts to use their licenses to reach out to clients.

It’s only to be expected - as scrutiny increases, so will innovative methods to escape it. I’m curious to see how regulators handle this, considering influencers of all kinds aren’t going anywhere - their global market size has more than doubled since 2019. In 2023, the market was estimated at a record USD 21.1 billion.

Speaking of regulators and consumer protection, an RBI Committee recently released a set of recommendations to improve customer banking, responding to complaints made over the years.

The committee’s recommendations include having auditors to check mis-selling of insurance products, use of AI and ML algorithms for instant resolution of small-value complaints, and  a specified  time limit for the return of property documents to borrowers after loan closure.

These recommendations have been a long time coming (the Committee was formed in May 2022), and they did not disappoint. It’s heartening to see customer service being taken so seriously by the regulatory body, especially when it comes to traditional banking institutions.

Other recommendations include allowing pensioners to submit a life certificate at any branch of the bank where they maintain their pension account, and Faceless/ Straight Through Processes' (STPs) for account closures.

However, the fact remains that that’s all they are - recommendations. But maybe it’s time for the regulator to take a hard stance?

That’s all from me this week - as always, leaving you with my favorite reads and interesting numbers from this week:

Between the digits:

• $15 billion: Global FinTech funding in Q1 2023, a a 55% increase from Q4 2022

• 46%:  of all real-time payments made worldwide in 2022 were made in India

• 7%: The number India’s GDP is expected to grow to in 2024-25, according to OECD

Reading recommendations:

• Indian banks’ credit profiles resilient amid global banking sector stress: Moody's

• The Maths behind the rise in credit card transactions in India - Banking on Banks

• Funding in Indian fintech down 40% in 2022, says IIFL Fintech report

Thank you for reading. If you liked this edition, forward it to your friends, peers, and colleagues. You can also connect with me on Twitter here and follow FinBox on LinkedIn to never miss any updates.  

Cheers,

Mayank All opinions expressed are my own and do not necessarily reflect the views of FinBox or its promoters.