TLDR: The Fintech Association for Consumer Empowerment (FACE) has launched the first RegTech Code of Conduct, a significant move towards standardizing regulatory technology practices and fostering self-regulation within the fintech sector. This voluntary code aims to ensure ethical, secure, and transparent use of RegTech, addressing critical areas like data protection, AI ethics, and auditability.
In a landmark development for the financial technology sector, the Fintech Association for Consumer Empowerment (FACE), recognized by the Reserve Bank of India (RBI) as a self-regulatory organization, has officially introduced its pioneering RegTech Code of Conduct. This initiative marks a crucial step towards standardizing regulatory technology practices and promoting a culture of self-regulation across the industry.
The newly established code provides a comprehensive framework designed to ensure the ethical, secure, and transparent application of RegTech solutions. Its core objectives include enhancing governance, bolstering accountability, and aligning industry practices with regulatory expectations. While the code is initially applicable to FACE’s RegTech members, it is structured to encourage broader adoption throughout the entire fintech ecosystem.
This move follows the establishment of a dedicated RegTech Forum earlier this year, which brought together member firms to collaboratively draft sector-specific norms. The timing of this code is particularly pertinent given the rapid integration of technology into compliance functions, which has simultaneously raised important concerns regarding data protection, the ethical implications of artificial intelligence (AI), and the auditability of technological processes.
The Code of Conduct is built upon broad principles spanning seven key areas: 1. Regulatory Engagement: Promoting open and transparent communication with financial regulators. 2. Partnership Governance: Ensuring thorough due diligence of partners. 3. Auditability: Mandating the creation of clear audit trails to monitor service levels and ensure transparency. 4. Ethical Conduct: Upholding high ethical standards in all RegTech operations. 5. Data Protection: Emphasizing robust measures for safeguarding sensitive data, including compliance with India’s Digital Personal Data Protection Rules, 2025. 6. Responsible AI Use: Requiring firms developing AI tools to document model validations to ensure fairness, explainability, and accountability. 7. Grievance Redressal: Establishing multi-channel systems for addressing grievances and reporting major incidents, such as data breaches, to relevant authorities.
Companies are also expected to implement strong internal controls, including whistleblower policies, and are encouraged to pursue certifications like ISO 27001 and SOC 2 to demonstrate their commitment to security and compliance.
Industry leaders have voiced strong support for this initiative. Sugandh Saxena, CEO of FACE, stated, “This initiative is a signal of maturity and intent—not just for FACE but for the broader FinTech and RegTech ecosystem.” Ranjan Reddy, CEO of Bureau, described it as “a crucial and timely initiative,” while Rahul Lakhani of IDFY characterized it as “a strategic opportunity.” Arpit Ratan of Signzy further emphasized that the code reinforces the vital role of transparency and compliance in building responsible digital infrastructure.
Also Read:
- India’s Dual Focus: Streamlining Infrastructure Finance and Advancing AI-Driven Digital Public Intelligence
- Perfios.ai Unveils Advanced GenAI Intelligence Stack to Triple BFSI Productivity
It is anticipated that this code will foster greater collaboration between RegTech providers and financial institutions, thereby accelerating the adoption of secure and AI-powered compliance tools across the industry.
