“Fintech” sounds like an uncommon word? In simple word, it can be described as technology to improve and automate financial services. Fintech emerged during the 21st century and was limited to the backend processes developed for delivering financial solutions. Today, this backend support services expanded to more customer-oriented services and user experience. The use of crypto currency like bit coin, use of digital wallets, etc. is booming and gradually replacing the old-fashioned way of transacting. However, big money still lies in the traditional banking industry.
The transformation from traditional to new
Internet invention, smart phone innovation has changed the face of financial services. These revolutionary changes have changed personal and commercial finance transactions and services.
Time consuming and tedious payment system has been taken over by electronics payments. This is a typical example of fintech innovations. Internet and smart phones made these payments more comfortable and convenient.
Bill Gates said – “Banking is necessary, banks are not “.
Being the largest base of technology innovations and fintech startups, India is the fastest growing country. The government is also encouraging digital initiatives and cashless payment services. Obviously, this technology growth demands the changes in traditional financial services.
Below are the drivers influencing the fintech innovations:
- Changes in interest rates
- Automation and pressure to reduce the costs
- Retaining the customer database and maintaining customer satisfaction
- New technology innovations
- Security and regulatory policies
- Trust building
Below are the trends in fintech innovations
Telematics is nothing but handling seamless insurance transactions. This will streamline the process of insurance. People can also take the help of robo advisors for comparing different financial services and wealth management companies.
Regtech is the blend word of ‘regulatory technology’ to solve the regulatory challenges by leveraging on innovative technology. Regtech solutions are designed to mitigate the risk and protect financial institutions.
Regtech solutions provide you with advanced technology to work on data related operations such as data extract, transfer, loading and simplification.
It gives you more flexibility and agility to solve real-time problems. Regtech also helps to monitor, analyze and report the data in an efficient manner. In short, it offers easy adaptability for changing processes.
Financial industries are regularly providing digital assistance to their consumers. Artificial intelligence technology had developed new interfaces like voice assistants, chat boats, call centre assistance to the customer to handle banking functions.
Collaboration and Innovation
Big banks have pressure to innovate as well as collaborate with new customers. You might have seen an advertisement such as shopping with Axis or ICICI bank debit card get 10 % extra cash back on Flipkart. Here banks have to also collaborate with a third-party vendor for promotional offers. Banks also need to innovate their products like prepaid cards, wallets, cashless payment banks etc.
In simple words, financial inclusion is nothing but providing financial products and services to low-income segments with an affordable cost to meet their requirements. The best example of this would be, providing of zero balance account to the people below poverty line. Financial inclusion services like payments, savings, and credits, insurance will be provided affordably and sustainably.
In short, new technologies such as machine learning, smart phones, artificial intelligence, predictive analysis, data-driven markets, automation, chat bots and online transactions are going to define the banking and financial industry in the future. These technologies will pave way for fintech startups, thus giving boost to the employment opportunities in the country.