The traditional value capture business model of the finance sector has had its moment in the sun and is now yesterday’s news. Emerging technologies already have and continue to alter the strategic landscape. Blockchain was a notable entrant earlier in the decade, and today entire financial systems are powered by technology. There’s no doubt that the pandemic played the role of a catalyst, but this transformation was inevitable.
Considering the slew of innovations aimed at retail banking to empower consumers in ways traditional players couldn’t, Sanjiv Bajaj, Chairman & Managing Director of Bajaj Finserv is one of the best digital pioneers in India who believes that collaboration with FinTech game changers can help to “build a new avatar of lending, insurance, and investments.” To see how FinTech advancements are transforming the financial sector, read on.
Focuses on Automation as a Mainstay
Automation simplifies, and there’s no doubt about that anymore. In the financial sector, this is a huge upgrade for both, the incumbent, and the customer. It reduces costs and redundancy. Thanks to this technology, staying compliant in the financial domain is much easier as the machine is capable of much more than tracking and storing.
It can learn, in real-time, create codes and rule-based systems and execute them flawlessly. Effectively, automation revolutionizes risk management and fraud detection. In banking, the upsides are numerous, as it can protect customer information, restrict theft, and track suspicious trails before accounts are compromised.
Offers Hyper-Personalisation
Technology naturally gravitates towards personalisation, and the financial sector has the tools to offer this benefit in a more focused manner. Customers now expect more than just a transactional experience from digital services and artificial intelligence alongside machine learning enables these functionalities. Right from underwriting to processing, everything is now enhanced to work seamlessly.
For instance, with mobile cheque deposits, consumers are now able to click a photo of their cheques, and within no time, the money is deposited into their account! This Omni channel experience not only benefits the customer but simultaneously generates a wealth of data for the provider. The value proposition here includes enhanced customer relations and improved revenue.
Underpins Embedded Finance
Riding on the back of personalisation is embedded finance, and markets across the world are adopting these models. Common trends like BNPL (Buy Now, Pay Later) or integrated banking services are good examples of how technology can facilitate ease of access. The ultimate goal is to offer an integrated experience, digitally, as customers enthusiastically seek these across markets.
So long as the mind share exists, financial entities have unlimited potential at their fingertips. In personal finance, for instance, AI assistants can serve customers by not only tracking spending but optimising it for better savings.
Creates an Ecosystem of Technology-Driven Symbiosis
Fintech companies continue to rise in number, but these require financial partners like top NBFC leaders in India to hone into customer pain points and solve for the greater good. Earlier in the decade, fintech growth was seen as competition by most financial institutions, but not today. Acquisitions prove beneficial as it allows incumbents to expand their capabilities while giving fintechs a place in the market and the ability to bring about the right kind of disruption.
Contemporary financial technology is radically reimagining the infrastructure of modern finance, and there’s a lot to benefit from it. Will technology ultimately be a vessel for financial freedom and inclusion? It certainly appears to be.
