With fintech becoming a buzzword in the banking & finance sector with new technologies that can disrupt the sector, various financial institution from government owned banks, private bank and even non-banking financial institutions are eying this technology.
This technology have made banking industry to undergo tremendous transformation vis-à-vis technological innovations and changing customer behaviour.
With fintech entering the markets with various innovative products with a mission to serve unbanked population of India mass consumer base. Fintech startups have revolutionized this transformation and led to financial inclusion of communities which were not included in the financial space.
In India, banks are now interested in incorporating new technologies in their business and operations. From ATMs, online banking, mobile banking, point-of-sale (POS) machines which are already with banks, fintech players have emerged as disruptors in the financial service industry by incorporating a number of cutting-edge technologies in their products and service offerings.
Due to COVID-19, digital transformation in the country was accelerated as the social distancing norms almost destabilized branch operations, and banks needed to focus on remote solutions for customer-facing operations.
App-based digital payment providers, e-wallets and payment banks expanded their business during the pandemic. The emergence of new lending providers for micro-loans has now started offering credit and forex products to individuals without needing to have a bank account.
In FY20, the number of new retail digital payments breached the 30 billion mark and the value of such transactions went past INR 300,000 billion for the first time in India.
The emergence of new-age technologies such as artificial intelligence-machine learning (AI-ML), big data, blockchain, cloud computing, robotic process automation and others enabled the banking industry to offer customer-centric offerings to diverse groups of people, Chief Business Officer of Manipal Global Academy of BFSI Robin Bhowmik said.
Bhowmik also said AI-ML lets banks automate their core-banking services thus easing the customer relationship. Banks are now incorporating powerful technology such as blockchain to develop an efficient distributed ledger to record transactions thereby securing the financial data from leaks. In fact, cybercrimes are a real challenge for banks. Statistics show its rising trend also owing to digital transformation.
The fintech innovations such as e-wallets, payment gateways, UPI, peer-to-peer lending, etc. have expanded banking services to a wider customer base and enabled a seamless banking experience.
Because of work from home concept introduced in the banking industry due to COVID, banks are trying to adopt more comprehensive business continuity plans to prepare for unexpected situations like the current crisis. This includes a mix of digital workspaces, cloud scalability, intrinsic security and enhanced network capabilities.
Despite all these improvements and prospects, banks are crippling with acute skills gap and talent shortage to take up emerging roles. It highlights the significance of up skilling and reskilling of banking professionals and freshers to build a future-ready workforce. It is a collective effort of all the stakeholders including the industry, banks, employees, and educational and training institutions, Bhowmik said.
Banks are also exploring customer-engaging platforms such as social media and messenger services to expand their businesses.