After the assault on Chinese apps like TikTok, WeChat and PUBG, the government is mulling over action on financial technology (fintech) firms with China links. Fintech startups surged in the country in the last few years and many of these apps offer online lending, but the problem is that most of them are funded by Chinese giants. And the Chinese military could use the sensitive data shared by the people in cyber warfare or target them as agents.
“The potential implications of a data compromise from fintechs such as lending apps are quite grave, since it involves sharing sensitive financial data of the user to the lender,” quotes the original report by Livemint, the business daily. “The kind of data one provides to fintech firms is riskier than what one would share on social media networks. Data on income tax, Aadhaar card and other details are taken by these app-based lenders,” it adds.
So far, India has banned 177 Chinese apps since the June 15 fight in which 20 Indian and at least 40 Chinese soldiers were killed. The government is trying to protect crucial user data from Chinese companies which share it with People’s Liberation Army. The fintech apps, financed by China, have Chinese directors on their boards despite the fact that these companies are Indian and are registered with the Government of India.
“What has set the alarm bells ringing is the presence of Chinese nationals as directors in several of these lending apps,” a person said, as per report by Livemint. “The government is trying to ascertain the reasons behind it.”
Around the world, there is a growing consensus that China and its ruling Communist regime uses mobile applications distributed across the world as tools for espionage, spying, and data thefts. The world and the USA in specific took a cue from India’s banning of TikTok to pull a similar manoeuvre back in the states. The Donald Trump Administration has given an ultimatum to TikTok to sell its American arm to Microsoft and pack its bags and leave the country.
The massive ban on Chinese tech services/apps by India will also result in investors growing apprehensive of putting in their fortunes with Chinese companies, as in the post-COVID world order, no one knows which country might end up taking anti-China decisions. Instead, investors will be looking at putting their money in more stable economies, such as India, who face no negative sentiments globally. This will spell the death knell for the Chinese tech sector.
Almost all the Chinese companies, including telecom giant Huawei have been caught in data theft, and this has become a major concern for countries around the world. Huawei has been banned in the United States and many other western countries after it was found that the company supplies Pentagon secrets to the Chinese military. Since then, the US has pushed all the countries to ban Huawei.
Chinese companies are seen with a high degree of suspicion given the absolute state control over private companies, from whom the Communist government could take the crucial data anytime it wants. Therefore, a ban of Chinese investment in fintech and the removal of Chinese directors from those companies given the fact that users share their most crucial data to get loans from fintech apps.