INTRODUCTION
In 2025, due to the increasing number of unwanted promotional messages and increasing consumer complaints about data misuse, the Telecom Regulatory Authority of India (hereafter referred to as “TRAI“) and the Reserve Bank of India (hereinafter referred to as “RBI”) established the pilot project, Digital Consent Management (hereinafter referred to as “DCM”). Whereas this project aims to make consent for receipt of commercial communications easier, this too is a milestone in a historical sense towards the cause of data privacy since this is designed to guarantee that personal data is collected, processed, and used openly, securely, and legally.
WHY DIGITAL CONSENT MANAGEMENT MATTERS FOR DATA PRIVACY?
The issue is two-fold:
- Unauthorized sharing of data: With the regulatory environment established by the Telecom Commercial Communications Customer Preference Regulations (hereinafter also be called “TCCCPR“) 2018, a company can initiate commercial communications to a consumer regardless of his/her Do Not Disturb (DND) choices as long as the company has secured express consent from the consumer. Nonetheless, financial institutions, telecom companies, and third-party agencies will occasionally obtain consumer information in absence of proper consent, resulting in unsolicited calls and messages.
- Poor Verification Processes: In most instances, the consents were obtained in offline processes and by unverifiable means, making it nearly impossible to verify consent provided. In most cases, consumers indicated that through misrepresentation, deception, or unauthorized data sharing, their mobile numbers were obtained by the concerned entities. Offline or paper-based consent mechanisms are greatly exposed to fraud, misrepresentation, and controversy.
These vulnerabilities generate major data-privacy concerns, as personal identifiers, phone numbers, and transaction-based data could be exchanged among organizations without safeguards in place. The DCM deals with these challenges by digitizing consent and protecting privacy at every level.
OBJECTIVES OF THE DIGITAL CONSENT MANAGEMENT SYSTEM
This pilot project will try to create guidelines regarding commercial communications and respecting data privacy and data protection principles:
1. Clear Collection of Consent: To guarantee that consumer consent is overt, verifiable, and auditable as per the Digital Personal Data Protection Act.
2. Greater consumer control: Consumers have access, modify, and withdraw their consent choices whenever they deem fit so as to avoid abuse of their data.
3. Data Minimization: Only the bare minimum personal data needed to verify consent is collected, hence minimizing the risk of exposing sensitive information.
4. Privacy Laws Compliance: The program suits any related regulatory amendments, namely TRAI’s TCCCPR 2018, RBI, and DPDP Act guidelines related to honoring people’s privacy while making communication.
KEY FEATURES PROTECTING DATA PRIVACY
- Consent Registration Function (CRF)
- Centralized Consent Repository: The CRF serves as a single source of truth by maintaining all consumer consent records in a digital format. In contrast to consent that is recorded on paper or offline, which can be lost, changed, or duplicated very easily, the CRF will help assure the consent is authentic and trustworthy.
- Auditability: The CRF will maintain a logging of all consent transactions, including when consent was given, and who requested consent, which thus provides an auditable trail for both regulators and consumers.
- Legal Compliance: By keeping a record of consent in digital form, the Significant Data Fiduciaries such as banks, telecoms, etc. may comply with Sections 12–16 of the DPDP Act, which mandate lawful collection, processing, and retention of data about the consumer.
- Real-Time Consent Verification
- Violations of Unauthorized Messaging: Before an entity sends out a promotional call or message, the system will verify that valid consent taken. This makes violations of TCCCPR 2018 and DPDP Act less likely.
- Access to Multiple Parties: CRF can work with multiple service providers to ensure consumer consent is respected by all banks, telecoms, and other entities.
- Transparent Regulations: Enabling real-time verification gives regulators a unique opportunity to more effectively monitor compliance and mitigate potential privacy violations.
- Protection and Management of Data
- Data Encryption: All personal data contained in the CRF will be encrypted in storage or transit, prohibiting access to unauthorized users.
- Access Control: Authorization will be utilized for accessing consent information, along with role-based access to limit exposure to sensitive data.
- Incident Reporting: The organization will report incidents of a security nature to any regulators, and any affected consumers, when necessary
- Privacy by Design: These security controls will ensure that privacy is designed into the architecture of the system, while mitigating overall risks of misuse or disclosure
- User-Friendly Interface with Transparency Functionality
- Personalized Consent Options: Shoppers will consent to receive, or not receive, specific type of records, either promotional, transactional or alerts, giving the consumer direct control of their personal data is used.
- Transparency Dashboards: Users will be able to see the entities that accessed their information, when consent was given, and for what purpose, in order to help bolster trust in their privacy transparency.
- Alerts and Notifications: Shoppers will receive alerts and notifications if their consent is changed, or if another entity requests consent to access their personal information.
PRIVACY CHALLENGES AND CONSIDERATIONS
Although the TRAI-RBI DCMsystem has made significant strides in improving data privacy, there are some aspects that may need the attention of law-firms, regulators and companies, to afford compliance and consumer protection.
1. Consumer Awareness and Understanding
- Many consumers still have no understanding of digital consent management systems or their rights under the DPDP Act.
- If consumers are not properly informed, they may accidentally provide discretionary consent, which is in contrast to the intent of these privacy-focused systems.
- Companies and regulators should work with users through campaigns, tutorials, and in their privacy notices, so that person knows what they are consenting to.
2. Data Security & Cyber Threats
- Centralizing consent records to a digital platform is basically a big target for a cyber incident.
- After the consent is accessed, cyber criminals can commit identity theft or fraud with the primary data, or otherwise misuse primary data, which would violate DPDP Act obligations regarding protecting personal data, and fiduciary duties.
- Companies should prepare for a cyber incident consider using end-to-end encryption, and ensure that the company has multi-factor authentication, intrusion detection, and an incident response plan with notification to consumers and/or regulators, in accordance with DPDP Act.
3. Integration with Existing Systems
- There may be integration difficulties in connecting the DCM platform with our CRM, messaging, and data management solutions to the existing providers for e.g., banks, telecoms, and third-party providers.
- Often, insufficient or poor integration will lead to incapable consent mismatches, data duplication, or unauthorized access, thereby undermining compliance.
- SDFs must use standardized application programming interfaces (APIs), access control, and real-time verification mechanisms to better ensure integration is seamless and secure, yet auditable.
4. Granularity of Consent and User Control
- DCM offers consumers the ability to revoke consent, but we expect that granularity of consumer control over what specific types of communication tools will not be realized.
- Because consumer consent is often without written awareness, consumers will be at risk of consenting to wide-ranging categories and as a result overexposing of personal data.
- Developing fine-grain consent and clearer dashboards will provide enhanced control and transparency for the user, thus reducing privacy risks.
5. Cross-Border Data Transfer Hazards
- Banks and their fintech partners typically operate in an international context, which may necessitate the sharing of consent data with global partners.
- Distributing consent data across borders may run afoul of the requirements of the DPDP Act if adequate safeguards are not in place or appropriate contractual agreements are not obtained.
- SDF is required to have data localization, legally enforceable contracts, and encryption standards for consent data that is retained or stored across borders.
6. Trust and Responsibility for Ongoing Data issues.
- Challenge: DCM does rely on consumers trust that their personal data will be used legally.
- Privacy Risk: If anyone breaches or misuses DCM personal data or if there is an absence of transparency, consumers may lose all trust in DCM with little to no hope of retraining consumers leading to low participation and effectiveness.
- Consideration: Strong and clear privacy policies, audit trails, and accountability are necessary to support consumer trust. The regulators can enhance this much needed credibility through planned audits and public reporting.
AMLEGALS REMARKS
The TRAI-RBI DCM project is much more than an official compliance tool. It is a privacy-first infrastructure that embeds obligations, transparency, and control for consumers into the digital communications market. The DCM program demonstrates the ability of privacy, accountability, and operational efficiency to coexist in a single system by including legal protections, technological advancements, and fiduciary responsibility.
As the pilot progresses and lessons are learned, the DCM initiative has the potential to inform digital consent management in India providing an atmosphere that is safer, more transparent, and more privacy-compliant than previously thought possible.
For any further queries or feedback, feel free to reach out to mridusha.guha@amlegals.com