The Power of One Click: What Your Consent Really Means

By Dr. Annapurna Valluripally
Professor in Finance, Siva Sivani Institute of Management (SSIM), Hyderabad

Today, many financial services begin with a simple click on “I Agree.” Whether you are applying for a loan, purchasing insurance, or buying a consumer durable product on EMI, you are often asked to provide your consent. How many of us actually know what we are consenting to?

Imagine walking into an electronics store to buy a refrigerator. The salesperson offers an attractive EMI scheme with instant loan approval. Within minutes, you receive a message on your mobile phone asking you to provide your consent. You simply click “I Agree,” and the process moves forward.

Similarly, while purchasing insurance online, applying for a personal loan through a mobile app, or requesting a credit card, you are often asked to provide your consent before proceeding.

Most of us click “Accept” without reading the details. But before clicking “I Agree,” it is worth pausing for a moment and asking:

• What exactly am I agreeing to?
• Why is my consent required?
• What information is being collected?
• How will my information be used?
• Can I withdraw my consent later?

In today’s digital financial world, consent is much more than simply clicking “I Agree.” It allows customers to make informed choices about how their personal information is collected and used for the financial service they have requested.

Understanding Consent

In simple terms, consent is your informed and voluntary permission for a financial institution to collect or use specific personal information for a clearly stated purpose.

This means your consent should not be treated as a mere formality. Before agreeing, you should have enough information to understand what you are consenting to and why your consent is being sought. A clear and transparent consent request enables you to make an informed decision rather than simply accepting it without knowing its purpose.

What Does Your Consent Actually Mean?

Many people believe that clicking “I Agree” means they are accepting a loan or purchasing an insurance policy. Not exactly.

Giving consent does not automatically mean that your loan will be approved or your insurance policy will be issued.

Instead, it generally means that you are permitting the financial institution to collect, verify and use specified personal information to evaluate your application or provide the requested financial service.

The final approval of a loan, credit card or insurance policy depends on the institution’s assessment and applicable eligibility criteria.

Why Do Banks, NBFCs and Insurance Companies Seek Consent?

Banks, NBFCs and insurance companies seek customer consent for specific purposes while providing financial products and services. In addition, they may collect or process certain information where required under applicable laws and regulatory requirements.

Some common purposes include:

Identity Verification
To verify the identity of the applicant using officially valid documents permitted under applicable Know Your Customer (KYC) regulations.

Credit Assessment
To assess the customer’s creditworthiness, which may include reviewing repayment history and other relevant financial information before taking a lending decision.

Loan Processing
To evaluate eligibility, determine the loan amount, repayment capacity and EMI structure.

Insurance Underwriting
Insurance companies may seek relevant information, with the customer’s consent where applicable, to assess risk and determine appropriate coverage.

Fraud Prevention
Consent may also enable financial institutions to verify customer information and help detect or prevent fraudulent activities.

Where Do We Commonly Give Consent?

Today, giving consent has become a routine part of many financial transactions.

You may have already provided your consent while:

• Purchasing a mobile phone on EMI
• Financing a television, refrigerator or washing machine
• Applying for a personal loan
• Purchasing a two-wheeler through finance
• Applying for a credit card
• Buying health or life insurance
• Registering on a digital lending platform

Depending on the product and applicable regulations, consent may be obtained electronically through an OTP, digital acceptance, a mobile application or website, or through physical documentation.

Read Before You Click

Many customers focus only on obtaining quick approval and overlook the consent request. However, taking a minute to read it can help you make more informed financial decisions.

Before clicking “I Agree,” make it a habit to:

• read the consent request carefully,
• understand why your information is required,
• check whether the purpose is clearly explained,
• read the important terms and conditions, and
• seek clarification if anything is unclear.

A minute spent reading today can help prevent misunderstandings tomorrow.

Can Consent Be Withdrawn?

Many customers also wonder whether they can withdraw the consent they have already given.

In many financial services, customers may have the option to withdraw their consent, depending on the applicable laws and regulations and the terms and conditions of the financial product or service.

For example, consent provided during the processing of a loan application helps the lender evaluate the application. Once a loan has been sanctioned and the loan agreement has been executed, the customer’s repayment obligations generally continue according to the agreed terms and conditions. Likewise, the impact of withdrawing consent may differ for insurance products or other financial services.

Customers should therefore understand the purpose of the consent they are providing and, where applicable, the implications of withdrawing it.

Why Responsible Consent Matters?

For customers, informed consent offers several benefits:

• Greater transparency
• Better understanding of how personal information is used
• Increased confidence while using digital financial services
• More informed financial decisions

For banks, NBFCs and insurance companies, obtaining appropriate customer consent helps build trust while supporting compliance with applicable legal and regulatory requirements.

Consent is one aspect of protecting personal information. Financial institutions are also expected to safeguard customer information through appropriate security and privacy measures.

The Road Ahead

As financial services continue to become more digital, customers are expected to gain greater visibility and control over how their personal information is used, subject to applicable laws and regulations.

Rather than repeatedly submitting the same information through different channels, future digital ecosystems are increasingly being designed to make financial services more secure, transparent and customer centric.

Customer consent is becoming an essential foundation of this transformation.

Final Thoughts

The next time you see “I Agree,” remember that you are not simply clicking a button.
You are permitting a financial institution to collect, verify and use specified personal information for the purpose explained to you.
Taking a few moments to understand the consent request can help you make better financial decisions and protect your personal information.

In today’s digital world, consent is not just about saying “Yes.” It is about understanding what you are saying “Yes” to. An informed customer is an empowered customer.

Coming Next Month

In this article, we explored why customer consent is an essential part of digital financial services.

In the next issue, we will look at India’s Account Aggregator framework and understand how it enables customers to securely share their financial information with regulated financial institutions while remaining in control of their consent.

Dr. Annapurna Valluripally
Professor in Finance
Siva Sivani Institute of Management (SSIM)
Hyderabad

Disclaimer: This article is intended solely for educational and awareness purposes. The requirements relating to customer consent may vary depending on the nature of the financial product or service, the institution involved, and the applicable laws and regulatory guidelines.