How to Automate Consent Collection for Fintech Apps

The fintech industry processes millions of transactions daily, handling sensitive financial data at an unprecedented scale. Yet many fintech applications still rely on manual consent collection processes that create bottlenecks, compliance gaps, and regulatory exposure.

With India's Digital Personal Data Protection (DPDP) Act now enforced through the Rules notified on November 14, 2025, automating consent collection isn't just convenient - it's essential for survival. Fintech companies must navigate overlapping regulatory requirements from the RBI, IRDAI, and SEBI while maintaining frictionless user experiences. Most operational obligations take effect gradually over an 18-month phased timeline rather than immediately.

The Consent Crisis: Why Manual Processes Fail

Fintech companies face a unique compliance paradox. They must obtain granular, purpose-specific consent at every stage while maintaining seamless payment flows. Manual consent tracking creates incomplete data, audit nightmares, and regulatory exposure.

The stakes are tangible: non-compliance penalties can reach ₹250 crores under the DPDP Act. When consent revocation requests arrive, manually updating downstream systems creates delays and violations. Payment platforms must navigate per-transaction consent requirements while managing user experience - a balance that manual systems cannot achieve.

Understanding the DPDP Act's Consent Framework

India's Digital Personal Data Protection Act, enacted August 11, 2023, fundamentally transformed consent requirements. Under Section 6, consent must be:

• Specific: Tied to particular purposes, not bundled
• Free: Without coercion or hidden conditions
• Informed: Accompanied by clear notices
• Unconditional: Not dependent on unrelated processing
• Unambiguous: Demonstrated through clear affirmative action

The DPDP Rules, 2025 (notified on 14 November 2025), establish implementation timelines. Institutional machinery is now active, while most operational duties become binding over a phased 18-month period after notification (expected around mid-May 2027, depending on the obligation).

The Act also permits processing under defined “legitimate uses,” meaning not all processing must rely on consent. However, for consent-based processing, the requirements above are strict and must be met.

Why Fintech Needs Automated Consent Management

An automated consent management platform addresses three critical needs simultaneously:

1. Compliance Across Jurisdictions

Fintech applications often serve users across multiple regions - India, other Asian markets, and globally. Each jurisdiction has different requirements: DPDP Act (India), GDPR (EU), CCPA (California), and LGPD (Brazil).

A modern consent management platform with pre-built templates for various regulations simplifies this complexity. Rather than building a separate compliance infrastructure, fintech teams can activate region-specific consent flows with minimal developer intervention.

2. Handling Granular Consent Requirements

The DPDP Act requires purpose-specific consent for consent-based processing, limited to data necessary for that purpose. Some processing may rely on “legitimate uses,” but when consent is the legal basis, purpose specificity is mandatory.

 An automated system can present simplified, transaction-type-specific consent without disrupting user experience through layered consent frameworks that track consent at the transaction level and store comprehensive audit trails.

3. Real-Time Consent Enforcement

When a customer withdraws consent, processing must stop within a “reasonable time” as required under the Act, not necessarily instantly. However, in practice, fintechs should aim to propagate consent withdrawal as soon as reasonably practicable, ideally using automation.

An automated platform solves this through API-driven integrations and webhook-based automation that trigger instant consent updates across all systems. For NBFCs and digital lenders where compliance liability extends to service providers, this capability is essential.

Implementing Automated Consent

Map data processing activities to identify personal data collected and its explicit purposes.

Design user-centric flows with mobile-optimized interfaces and easy revocation mechanisms.

Integrate with your systems using APIs and SDKs that synchronize consent across your tech stack.

Automate enforcement by automatically updating processors when consent changes.

Maintain audit trails for regulatory audits and compliance proof.

Real-World Applications Across Fintech Segments

Payment Platforms: Handle per-transaction consent without disrupting payment velocity while maintaining DPDP compliance.

NBFCs & Digital Lenders: Collect granular consent for each lending-related purpose and monitor third-party processor compliance under RBI's Digital Lending Guidelines (2022, updated 2025).

Banks & Traditional Institutions: Seek fresh consent from existing customers for new purposes using automated re-consent workflows across millions of customers.

Insurance Companies: Comply with IRDAI requirements while managing policyholder data consent transparently.

Why Automation Delivers ROI

Risk Mitigation: The cost of non-compliance fines vastly exceeds investment in automated consent management.

Operational Efficiency: Reduce developer time on custom integrations, customer support overhead, and compliance team manual audits.

Customer Trust: Transparent consent management and easy preference control build lasting customer relationships.

Conclusion

Fintech companies cannot rely on manual consent collection. The DPDP Act, RBI Digital Lending Guidelines, and similar global regulations demand consent that is specific, free, informed, unconditional, and unambiguous - requirements best met through automated systems.

Redacto's Consent Manager Platform simplifies multi-region compliance through pre-built templates for DPDP, GDPR, CCPA, and other regulations. It handles granular consent requirements through layered frameworks, enforces consent across all systems via APIs and webhooks, and generates audit-ready documentation automatically.

Ready to automate consent management? Contact us today to discuss how Redacto transforms your fintech compliance posture. Or reach out via WhatsApp for a quick consultation.

FAQ

Does automated consent management violate the DPDP Act requirements?

No. Automation ensures consent meets DPDP standards - freely given, specific, informed, unconditional, and unambiguous. The key is designing user interfaces that genuinely inform and provide clear affirmative action.

Can automated systems handle per-transaction consent?

Yes, through layered frameworks. Collect purpose-specific consent during onboarding, then use simplified notifications for individual transactions with easy revocation mechanisms.

How quickly must downstream systems be updated when consent is revoked?

The DPDP Act requires processing to cease within a “reasonable time” after withdrawal, not necessarily instantly. Automated platforms enable propagation as soon as reasonably practicable, which in fintech environments often means minutes to hours, depending on architecture.

Do we need to re-collect consent from existing customers?

Yes, typically. The DPDP Act requires specific, informed consent. Generic prior consent usually doesn't meet requirements under the new framework.

How do we handle customers in multiple jurisdictions?

Modern consent management platforms support region-specific templates. Users from India see DPDP-compliant notices; EU users see GDPR-compliant notices. The platform automatically applies the appropriate framework based on location.