Navigating the financial frontier: Fintech disruptions and future trends

By Vaibhav Kanyalkar

The evolution of financial technologies, commonly known as fintech, has propelled us from the era of barter trade to a seamless digital age. From grains and coins to mobile apps and blockchain, the financial landscape has undergone a radical transformation over centuries.

With the emergence of advanced technologies such as blockchain, cloud computing, artificial intelligence (AI), data analytics, and peer-to-peer (P2P) lending, the reshaping of the banking, financial services, and insurance (BFSI) sector has been unparalleled over the last two decades. In fact, another wave of transformation is on the horizon with players in BFSI adopting new tricks of the trade. Here are a few trends to look for:-

The Digital Revolution: Fintech has laid a robust foundation, giving rise to innovative financial products that are revolutionising the BFSI space. Websites, mobile apps, peer-to-peer payments, and integrated payment technologies have become game-changers, enabling customers to shop and pay bills conveniently and securely through digital mobile wallets. This shift has not only improved customer experience but has also significantly reduced transaction costs by eliminating manual and paper-based processes.

Blockchain in Finance: Blockchain technology is poised to disrupt the banking industry, much like the internet transformed media. Recognised for its transparency, high security, and cost-effectiveness, blockchain is gaining traction among financial institutions. As more organisations realize the potential of blockchain in enhancing security, reducing costs, and improving customer satisfaction, widespread adoption of this technology is imminent.

Cloud Computing: This technology has become instrumental in providing 24X7 customer service from anywhere, enhancing the agility of financial institutions, and facilitating the scaling up of services. The pay-as-you-go model of cloud computing helps control costs while enabling secure online payments, digital wallets, and online transfers. Financial institutions are increasingly leveraging cloud solutions to stay competitive.

AI Reshaping Financial Services: By this time it is clear as day that AI is not just a buzzword; it is a game-changer in the financial services industry. A PwC study reveals that a majority of financial services decision-makers are making substantial investments in AI, considering it a strategic advantage. AI-driven solutions are enhancing decision-making processes, automating tasks, and personalising customer experiences, ultimately leading to increased efficiency and competitiveness.

Data Analytics Driving Real-Time Decisions: Big data and analytics have become integral to the banking sector, empowering institutions to make real-time decisions based on customer behavior, spending habits, and feedback. Financial institutions are leveraging data analytics for sales management, fraud detection, risk assessment, and targeted marketing. The ability to analyse vast amounts of data in real-time is a key factor in staying ahead in the competitive financial landscape.

Data Sensitivity: With the flow of sensitive data across various organisations and agencies, fintech solutions must be robust, scalable, and adaptable to changing market needs. The ability to make on-the-fly adjustments, such as configuring special offers across products from a single application, is crucial. Organisations must also be prepared with alternative means to address scenarios like service downtime or insufficient data to ensure a fail-safe mechanism.

P2P Lending: Peer-to-peer (P2P) lending has emerged as a notable financial product, democratising access to credit. It gained prominence globally after the 2008 financial crisis. Given its rise in India, the country’s banking regulator, Reserve Bank of India, introduced regulations for P2P lending, opening avenues for easy credit access through apps in 2017. P2P lending is empowering individuals and organisations to reach underserved and unbanked segments, fostering a more inclusive participation in economic activities.

The emergence of fintech has not only simplified business and finance but has also elevated the overall customer experience. As technology continues to advance, the BFSI sector must stay nimble, embracing innovations to remain competitive in this dynamic landscape. The future promises further disruptions, and organisations that adapt swiftly to the evolving fintech ecosystem will undoubtedly thrive in the financial frontier.

(The author is Vaibhav Kanyalkar, CTO, Privezi, and the views expressed in this article are his own_