Innovations in fin-tech is changing financial landscape

The emerging financial technologies continue to impact how companies do business and how people handle digital transactions. Since the turn of the century, innovation in technology has played a progressively substantial role in our daily lives. From Smartphones to home assistants to AI chat-bots, people are now relying on tech more than ever to simplify or improve productivity and quality of life! The COVID pandemic has only accelerated this trend, with increasing tech adoption across industries and sectors, making it more mainstream. This is also increasingly true for Banking and Finance.

Technology started playing a more critical role in the financial sector. As such, 57% of consumers now prefer to use online banking tools to manage their finances, to compare, this figure sat at 49% pre-COVID 19, as per market research. The personal finance sector has certainly been no exception. Consumers have already become increasingly dependable on tech to research, invest, and manage their investments, even more so over the past six months. The rise of financial technology has modernised many processes for both service providers and the consumers. To be more precise, fin-tech has made the vast, complicated world of personal finances far more accessible to the average consumers.

The technology boom in developed and developing countries has slowly moved from Internet banking to mobile banking and is now taking a new direction toward digital banking. The RBI governor sees four landscapes emerging in the banking sector in the current decade, including the growth of digital players who will increasingly emerge as critical pieces across all segments.

With the help of technology intelligence, intricate algorithms, machine learning and big data, are swiftly replacing traditional financial practices. Backed by such powerful tech innovation, FinTech is completely changing the corporate landscape in multiple industries and reinventing the way companies gain access to finance. Now the personal finance solutions can be offered on smartphones. Thus, it is now possible to make informed financial decisions in real time. Although some banks have started to develop their own personal finance management software, many are turning to fin-techs start-ups, Tech service providers, and smart device manufacturers, for their offerings.

With increased digitisation and development of FinTech, the traditional ways of credit evaluation are expected to be replaced by new-age credit evaluation methods that focus on a slew of non-financial and reliable transactional data. The IT revolution brings the fin-tech segment offered an alternative to the individuals and corporates alike, enhancing consumer experience, simplifying processes and making it faster and efficient format of financial transactions across platforms. It is fact that, now the Banks slowly started feeling the pinch of growing customer acceptance of such non-banks or start-ups, threatening them with their competitive high-technology low-cost products / services to keep customers delighted and raise the bar of expectations. FinTech is expected to challenge the financial sector with innovations and its exponential growth.

Dr. Deepak Kumar Sahu, Chief editor, VARINDIA