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Mumbai: From online banking to grocery shopping, digitization has transformed daily financial transactions. But research suggests that this merging of the financial and digital aspects of human lives, or digital financialization, has come at some cost for India.

In a new study, Sudeep Jain and Daniel Gabor of the University of the West of England analyze its growth in India. They argue that it is often coerced and thrives at the cost of user data being used for political surveillance and monetization by companies. In developing countries, such as India, which has a large share of unbanked population, digital financialization is often heralded as a critical tool for financial inclusion. But financial inclusion is no longer just about opening more bank branches. For instance, policy measures, such as direct transfer of subsidies to bank accounts and demonetization, have pushed people into using digital financial services. According to the authors, these are coercive means to further digital financialization.

The coerced fusion of digital technologies and finance is not limited to the development sector and the poor. The push to link Aadhaar to bank accounts and mobile numbers, blurs the financial and digital identities of individuals, making it difficult for citizens to separate the two, say the authors. They argue that both the state and private tech companies are huge beneficiaries of the fusion of digital and financial services. The digital infrastructure allows for increased state surveillance, while the large volumes of customer data generated allows for greater monetization by tech companies. This monetization has become an avenue for profits for both domestic players, such as Paytm, as well as foreign firms such as MasterCard and Google. This is contrary to the narrative of tech nationalism deployed by the government, say the authors.

Also read: The Rise of Digital Financialisation: The Case of India

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