Trust Through Responsible Finance For Inclusive Growth

"In a rapidly evolving Indian financial landscape, true profitability and respectability are earned, not by short-term gains, but by fostering deep-rooted trust through responsible actions. When consumers believe in the system's commitment to their well-being, the financial sector becomes a success of inclusive socio-economic progress, where innovation and integrity go hand in hand."

Governmental policies, coupled with a financial regulatory approach that encourages technological innovation through sandbox environments, have positioned India at the vanguard of global financial innovation. Finance is now intrinsically linked with technology, business models are rapidly transforming, and consumer engagement has become more dynamic than ever.

As emerging technologies like artificial intelligence, quantum computing and renewable energy drive further disruption, the sector must be prepared to mitigate new risks while tapping into immense potential. A crucial aspect of this transformation is ensuring that it keeps pace with consumer needs, prioritising safety and financial stability.

At its core, 'responsible finance' is about more than just compliance. It is about creating resilience, mitigating risks, and improving the financial well-being of consumers. Much like a tobacco seller refusing to sell to underaged customers, the financial sector must act in the long-term interest of consumers, ensuring their protection and security. This responsibility extends across all interactions, guiding every decision and innovation.

With Indian consumers becoming more informed, tech-savvy, and discerning, their expectations of financial services are shifting. They now seek not only products or services but also experiences that are transparent, fair, and aligned with their personal needs. Financial institutions must go beyond providing mere access — they must earn the trust and respect of their consumers by acting in their best interests.

Also Read: Linking Centre-To-State Loans To Social Indicators Can Build Cooperative Federalism

For the financial industry to remain profitable and respectable, it must prioritise consumer trust as a central objective. Trust cannot be built through superficial efforts or short-term marketing strategies. Instead, it must stem from a genuine commitment to a shared ethos of responsibility, where the interests of the consumer are paramount.

Profitability is closely tied to consumer confidence; when consumers believe their financial service providers are acting in their best interests, they are more likely to engage, invest, and remain loyal. That is why financial product development needs consumers at the core of its principles.

A significant element of trust-building is the creation of seamless grievance redressal mechanisms. Consumers need assurance that if something goes wrong, there are transparent, reliable systems in place to address their concerns. Having such mechanisms in place fosters a sense of security and reinforces consumer confidence in the broader financial system.

Collaboration between financial institutions and regulators is essential in creating a balanced ecosystem. This relationship should not be adversarial, but rather cooperative. A financial industry that works hand-in-hand with regulators to safeguard consumer interests can help shape a regulatory framework that benefits all stakeholders. Such cooperation ensures that regulations are not rigidly imposed but are informed by industry insights and real-world experiences. When consumers see this collaboration in action, their trust in the system strengthens.

Moreover, the development of agile regulatory frameworks that can quickly adapt to emerging risks is crucial. As technologies evolve, so too must the mechanisms for managing new threats. By maintaining an open dialogue, financial institutions and regulators can create a resilient financial ecosystem that protects consumers and fosters innovation.

Also Read: The Unseen Cost Of Climate Inaction: Financing India’s Sustainable Future

As India's financial sector continues to innovate, a steadfast commitment to consumer welfare is essential. The profitability and respectability of the industry rest on its ability to earn and maintain consumer trust. This requires a comprehensive system that is transparent, accountable, and responsive to consumer needs. When consumers feel protected and valued, they are more likely to engage deeply with the financial system.

Consumer financial literacy is vital for empowering individuals to make informed decisions, especially in a diverse market like India where many remain underbanked and lack access to formal financial education. The financial industry's responsibility goes beyond offering products—it must actively contribute to building financial awareness and inclusion, ensuring that all consumers can participate meaningfully in the evolving financial landscape.

While regulation plays a critical role, the industry must adopt a mindset of self-regulation, where protecting the customer is a fundamental priority. A unified approach that centers on consumer trust is not just desirable—it is necessary for the sector's growth. Although India’s financial sector has made significant strides, the next phase of expansion depends on financial institutions, particularly fintechs, winning the trust of a broader population base.

Responsible finance, therefore, is not just a policy goal. Responsible finance in India is the bridge between innovation and inclusion, where every stakeholder—from regulators to industry leaders—must work in harmony to create a system that prioritises trust, transparency, and the long-term well-being of consumers. To build a resilient financial ecosystem, every stakeholder — from banks and fintech firms to consumers themselves — must play a role.

Responsible finance is a key pillar of a Viksit Bharat, where economic growth is driven by transparency, inclusivity and trust. As the country continues its journey toward economic development, the financial industry has an opportunity to lead by example, demonstrating that growth and responsibility are linked.

Srinath Sridharan is a policy researcher and corporate adviser. X: @ssmumbai.

Ram Rastogi is a digital evangelist. X: @ramrastogi

Disclaimer: The views expressed here are those of the authors and do not necessarily represent the views of NDTV Profit or its editorial team.

Also Read: 'We, The Corporate People' Have Failed Women