![\"Crypto](\"https:\/\/static.toiimg.com\/thumb\/msid-134011247,imgsize-39392,width-400,height-225,resizemode-4\/fintech-industry-should-step-up-investments-to-counter-risks-from-emerging-tech.jpg\" "\\"FATF")
<\/div>\n<\/div>\n<\/div>\nMUMBAI: Vivek Aggarwal, the first Indian bureaucrat elected to the Financial Action Task Force (FATF), said risks from virtual assets, which include crypto, remain unresolved, particularly because of decentralised peer-to-peer transactions and gaps in anti-money laundering and counter-terror financing regulation across jurisdictions. He called for stronger partnerships through FATF workstreams and at the national level to tackle virtual-asset risks and technology-enabled fraud, saying such threats can no longer be tackled by regulators alone.Speaking at the Global Fintech Fest, Aggarwal, secretary, ministry of culture, said FATF must keep adapting its standards to emerging risks. Its current two-year programme includes a toolkit to combat fraud linked to emerging technologies, while the body is also examining cybercrime and scam compounds.He called for risk-based regulation, with requirements calibrated to the risks posed by different businesses rather than applied uniformly. Excessive regulation could put pressure on private-sector businesses, he said. Effective implementation would also require self-regulation and stronger private-to-private partnerships.India has expanded its institutional response to cybercrime, with I4C-type institutions now operating in every state and UT, Aggarwal said. State police and central agencies work together, while cross-border cases are addressed through mutual legal assistance and diplomacy.AI presents both a threat and a tool in fighting financial crime. Criminals can use it for deepfakes, scams and data manipulation, while financial institutions can deploy it for transaction monitoring, screening and customer due diligence, he said.Aggarwal called for more sophisticated screening systems to reduce false positives and faster resolution when they occur, ideally within T+1 or T+2 days. Both regulators and private-sector firms need to address the problem, he said.For fintech firms, he said the key challenge was recognising emerging risks and investing in the resources needed to counter them. AI, scam compounds and quantum computing pose risks requiring timely investment and preparation.Aggarwal urged the industry to move from peer competition to peer cooperation on self-regulation, sector-wide risk identification and collective risk management. Firms could jointly invest in technology platforms to reduce costs and achieve economies of scale.He also urged industry associations to go beyond advocacy and focus on self-regulation, self-introspection and stronger private-to-private partnerships to combat financial crime.<\/div>\n