the guidelines for account aggregator ( aa ) in 2016, are examples rbi's proactive developmental role. the focus of the digital lending guidelines ( dlg ) on fair treatment of customers demonstrate the prioritisation of innovation with suitable guardrails. it is important to recognize that regulation plays a crucial role in managing the pace of change and allows the financial system to adapt to new innovations without threatening the stability of the system. self - regulation as regulators continue to contemplate, implement, and refine regulations for the orderly development of the fintech sector, self - regulatory organizations ( sros ) could play a pivotal role in the fintech industry by promoting responsible practices and maintaining ethical standards. these industry - led bodies establish guidelines and codes of conduct that foster transparency, fair competition, and consumer protection. sros can facilitate collaboration between fintech firms, regulators, and stakeholders, creating a framework for innovation with guardrails. by proactively addressing issues like market integrity, conduct, data privacy, cybersecurity, and risk management, sros help build trust among consumers, investors, and regulators. their voluntary compliance mechanisms contribute to a more sustainable and reputable fintech ecosystem, ensuring growth while minimizing potential risks and negative outcomes. in the context of a new and evolving sector like fintech, it is the industry participants who possess the deepest understanding of the processes and practices within the trade. therefore, they are bestsuited to establish common rules, enforce them, and effectively handle disputes that may arise from non - compliance with these rules. conclusion in conclusion, it is crucial for fintechs to continue collaborating and innovating to enhance the effectiveness of the financial sector. collaborating and competing with fintechs is essential for traditional financial entities too, in order to adapt. while innovation is vital, it should also support social and economic goals. regulation should play the role of guiding the sector to those goals. self - regulation needs to play a far more active role too. together, industry participants – fintech and banks alike -, regulators, and self - regulatory organizations can work harmoniously to shape a vibrant and resilient financial landscape that promotes inclusivity and progress for all. 3 / 4 bis - central bankers'speeches thank you for your attention and wish you all the best. 1 chapter 7 : extracting value through the innovation economy in the value of everything by mariana mazzucato 4 / 4 bis - central bankers'speeches

name'fintech '. it would be useful to remember that, apart from the difference in speed and scope, neither the older innovations nor the current fintech innovations change the basic nature and functions of the financial system. the major transformation that characterises the fintech ecosystem is the increased efficiency with which financial products and services are delivered and consumed. this efficiency is driven largely by ( a ) digitisation of information which can then be accessed, processed and transmitted with ease, ( b ) more direct interface between buyers and sellers, between borrowers and lenders and between payers and receivers, which optimises transaction chains, and ( c ) democratisation of fast communication channels that expands the reach of the financial system. put together, these efficiencies lead to lower cost, quicker transactions and better inclusion. this is clearly a desirable outcome 1 / 4 bis - central bankers'speeches and one that should be actively encouraged and promoted, which is what the focus of policy making and regulation currently is. but innovative developments raise different issues, not undesirable in themselves, but which need to be addressed nonetheless. one issue is the relative roles of traditional financial institutions, especially banks, vis - avis the fintech entities. should their interaction be driven by motives of collaboration or competition? the second issue is what should be the approach of financial regulators. how is fintech ideally regulated, same as traditional finance or differently. i shall try and talk about these two issues briefly in what follows. collaborate or compete traditional financial players ( let us use the term'banks'for simplicity ) have come to acknowledge the impact of fintechs on their functional roles and they are reacting in one of two ways. the first way is by internalising innovations, thereby placing themselves in competition to fintech entities. the second way is by collaborating with fintechs – either by engaging in one - to - one partnerships or by purchasing the services of fintech players. the latter kind of collaboration can be functional, in the sense that fintech entities can perform functions where they have the competitive advantage and banks focusing on areas of their expertise. while customers benefit from an improved experience with curated products and services at competitive prices, regulators also draw comfort in these arrangements as traditional financial entities like banks / nbfcs which are well regulated and continue to discharge the primary responsibility of risk management through their balance - sheets. perhaps the sweet spot lies in fintechs acting as both competitors as well as collaborators. the existence of