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@ChetanGhadge:

TY for your comment and nice to hear from you!

Well, my examples of the approach used by startups to get ahead of the law are all from other highly regulated industries viz. food, health, transportation, and housing.

The purpose of regulation is to protect consumer's interest. In theory, it can coexist with innovation. But, regulation happens via regulators. In actual practice, I've rarely seen a regulator who asks the consumer how they wish their interest to be protected. Instead, most regulators assume they know best how to protect the consumer's interest and regulate away in a manner that puts a brake on doing things differently from status quo aka innovation. So regulation does kill innovation far more often than it facilitates innovation in the real world.

2FA regulation for online payments in India created an entire industry of prepaid mobile wallets that succeeded by finding a way to circumvent 2FA. Not sure whether you'd call that an example of regulation facilitating innovation!

IMO, while some law breaking startups will be forced to shut down, I doubt if many startups that go out of the way to find out the legal position of their offering will ever take off.  

As for subprime crisis, TBH I haven't seen any regulation from any regulator that would guaranteee a non-recurrence of the crisis - even by traditional banks, let alone online lending marketplaces!

I'm not the only one saying this. According to Fast Company article titled "The Food-Sharing Economy Is Delicious And Illegal—Will It Survive?"

"As startups launch in heavily regulated industries such as food, health, transportation, and housing, clashes with the law have become as common in Silicon Valley as office ping-pong tables. The MOST COMMON APPROACH to these regulatory battles—successfully embraced by lodging site Airbnb, ride-hailing app Uber, fantasy football site FanDuel, and DNA testing and analysis company23andMe— is to IGNORE THE TROUBLESOME LAW as long as possible. "For a long time, the advice was, just keep your head down, build the kind of network you need to be viable, and then once you have viability, NOBODY IS GOING TO BE ABLE TO SHUT YOU DOWN," ... "If Uber had gone to the regulators first, the entrenched interests would have crushed them in seconds. What might have been easy for regulators to squash in a startup is another matter after the offending business becomes one of the most valuable private companies in the world. When New York City Mayor Bill de Blasio threatened to limit Uber’s expansion last summer, the former startup, now months away from being declared a $62.5 billion company, orchestrated a campaign, complete with television ads, lobbyists, and even a "De Blasio’s Uber" feature in its app that showed users a dystopian world in which they must wait 25 minutes for a ride. The mayor backed down." (capitalization mine for emphasis).

@GrahamSeel: Then we must agree to disagree. This whole concept of sensing risk, mitigating risk, etc., is enterprise world luxury. Even there, it mostly results in the enterprise doing nothing. So much so progressive enterprises are empowering their incubation units within their organizations to think out of the box and telling them "we'll think about regulation later". This whole legal awareness and risk sensitive approach is absolutely repugnant to the concept and style of startups. If Uber had followed this approach, it wouldn't be around in 459 cities today. AFAIK, Uber has retreated only one or two product categories in Germany - which is not a bad tradeoff for spreading to 75 countries. 

We probably won't have a Uber today had its founders bothered to find out the complete legal standing of their proposed car ride service amidst the regulated taxi industry. Ditto for AirBnB vis-a-vis hotel regulation. I tend to believe that whatever few fintechs will emerge from the hype successfully will be ones that ignore legislation, gather enough traction and use that to shape legislation ex post facto to their own advantage.

Even I don't think you're exaggerating. But to stop me from wondering if you're hallucinating, can you recommend a single fintech - out of the ones that're going to take away 50% of banks' business - that can offer me a credit card? My big fat bank has been promising an add on card for the past few months but I'm tired of waiting and am in the market for a new credit card.

"A key objective would be ensure a robust payments infrastructure in the country to increase accessibility, availability, interoperability and security." IMO, unless "increase convenience" enters the list of objectives, Vision-2018 won't make any significant difference to reality.

@StephenWilson:

You've nailed it. Regulatory filings for a company in India have to be signed digitally by the company's director. The procedure for doing this is utterly farcical: My outsourced agency sends me a digital signature file as an email attachment. I double-click it and run it on my PC. Then I sign the bunch of PDF files and upload them to the regulator's website. I asked the agency what would happen if the said email were to go to someone else, would that someone else be able to run the software on their PC and digitally sign the PDFs as me? They told me, "Oh, we're a chartered secretary firm, sorry we can't answer your IT questions"!

As a result, I've never felt comfortable with digital signatures. If ever I get disadvantaged on my regulatory filings, I'll describe this farcical procedure to challenge non-repudiation in a court of law.

"Deutsche banks"?

This is not the first time I've come across a country-agnostic comment by one commenter (e.g. John Candido - Black Cabs - Melbourne) to be parsed / interpreted / steered by another commenter towards a specific country inferred from the former's profile. 

This is not such a big deal except when the latter is anonymous and there's no country listed against them.

To establish a level playing field, I request @Finextra to either (A) stipulate that comments from anonymous members should not include unprovoked references to a country (hard to implement?) OR (B) mention the country of anonymous members (easier to implement?).

"Given the rapid rise in the number of marketplace lenders who often compete with traditional lenders for the same borrowers," Whaaat? Facts point to exactly the opposite: Marketplace lenders are bottom feeders and cater to the segment of the market that banks have shunned. They're already facing well-publicized problems selling their debt to finserv, there's no systemic risk if they fail.