Financial Technology (Fintech) has come a long way and the pandemic has certainly helped it gain exposure by creating a need in banks and financial services organizations to adopt innovative technologies to drive more business and generate better ROI. Fintech companies help financial services (finserv) organizations in their digital transformation journey to create a digital footprint across tiers and build a truly-digital marketplace. Here are 5 such disruptive fintechs that will drive the next wave of digital finance.
- Digital Lending: One of the key areas that has managed to bring more business and underwritings – than any other channel – is digital. Digital has helped financial services (Finserv) organizations to penetrate even the most rural parts of India to acquire new users and expand organization’s digital lending footprint. Digital lending has helped both the lender and the recipient by reducing obstacles and optimizing the lending process. Some Finserv organizations have started accepting digital underwriting as well. Digital lending has certainly helped bridge the gap between the organization and the customer, helping organization in faster go-to-market and the customer in a seamless digital experience.
- Pre-Approved Loans (credit worthiness with AI/ML): Fintech companies are helping lending organizations to identify and segregate users basis their demographics, income, risk appetite, credit score, etc. to accelerate “go-to-market”. Fintech companies are using AI/ML and to study user behavior, interests, social engagement, etc. to identify user risk and credit potential. This has helped organizations to introduce a new service known as ‘pre-approved loan’ – which is a set amount approved and offered based on user’s history, credit score, risk, etc. which helps the organization to “go-to-market” faster, reduce operational redundancies, and process more loans.
- Payables/Receivables Consolidation: A lot of trending mobile applications and web-based SaaS companies are offering payment/account consolidation to their users. These companies consolidate all your payables and receivables in one place, helping you with better visibility across your finances. Receiving payments with one click, sending notifications, reminders to your payers, linking your bank account with an UPI ID for seamless payment processing are some of the features offered.
- Neo-banks: Neo-banks are a result of the new generation’s preference of convenience over loyalty, and the cut-throat competition between banks to acquire every customer and leapfrog each-other. Neo-banks are digital-only banks that offer the same set of services that their brick-and-mortar brethren do. Unlike a traditional bank, the customer on-boarding, engagement, offerings, and other banking services of neo-banks are completely digital and involves no in-person engagement whatsoever. If neo-banks are any indication, in few years, they will soon replace their physical brethren, and all transactions will become digital, thereby making ATMs redundant and obsolete.
- Blockchain: Fintech companies have adopted blockchain to facilitate financial services organizations to build a robust and secure foundation to their existing payment systems. Fintech companies are helping finserv to create a secure infrastructure with the help of blockchain to facilitate the next big wave of digital payments.
Fintech companies have leveraged trending innovations such as AI/ML/Blockchain to enable financial organizations to “go-to-market” faster, optimize their operations, and provide a safe, secure and seamless experience to their customers. This will certainly help finserv to build the next wave of digital financing.
(The author is Sr. VP & Head- Center of Excellence – Clover Infotech and the views expressed in this article are his own)