The fintech revolution has taken the world by storm — and India has been part of it. Home to some of the most innovative financial technology, as well as a flourishing market for technological import, India has transformed the meaning of financial services with the aid of digitization and the internet. Despite a significant chunk of the country struggling to access modernized infrastructure, financial services have been at the forefront of penetrative change across demographics and locations (the spearhead of which has been the UPI).
It is undeniable, then, that technology has been the crux of this transformative movement. Even the name fintech — financial technology — indicates the role that technology has had to play in the evolution of the fintech industry.
- Artificial Intelligence (AI)
AI has been the forerunner in the transformation of most industries that utilize technology. Playing a crucial role in customer experience, AI is seen almost everywhere in the digitization of consumer services — from chatbots and customer support to large-scale data analytics and predictions.
In the future, AI could be implemented not just for customer support but also to support backend operations for financial institutions. From data-driven decision making, financial forecasting, to even credit score calculations and predictions, AI could fundamentally alter how the financial world handles assets and liabilities. Moreover, it could even cleverly shape how personal finance literacy and empowerment function.
- Cloud Computing
Cloud computing has transformed the way in which digital spaces function, on a personal as well as a professional level. Providing global and versatile access to datasets, cloud computing has done a significant job of drastically reducing operational and infrastructural costs for businesses. This holds doubly true for finance, where the cloud has become central to storing and extracting large volumes of data.
Additionally, the security tech surrounding the cloud has also become equally important given the sensitive nature of the data stored on it. The overall efficiency of financial services has vastly increased due to cloud computing allowing simultaneous work, easy access to work, and globally accessible financial tools.
- Open Source & SaaS
The combination of accessibility, scalability, and quick processing is the framework around which people are investing their resources into new technologies. Open source software and software-as-a-subscription (SaaS) have been revolutionary in providing this to users at a fraction of the cost initial technology investment involved. Not only does it automatically implement cloud computing in its data storage processes, but it also allows for a more customizable and choose-what-you-use experience for end users.
Moreover, the lack of complete ownership over the software means that there is no time or money wastage on maintenance. The updates, integrations, and troubleshooting of the software are taken care of by the owners while software users only pay for utilization and any customer service aid.
- Digital Banking and Applications
Digital banking is the newly established way of conducting banking operations. Not just from the backend, but on a user level, bank customers increasingly prefer the option to conduct transactions from a remote location. Whether this is through a website or a mobile application, the concept of going to a brick-and-mortar bank to add money to an account, transfer money, or pay bills is becoming obsolete.
Newer fintech applications even allow users to remotely apply for loans and cards — a process that was once arduous and relied heavily on manual verification and hardcopy data. As banking applications evolve, it is likely that the only physical work bank employees will do will be backend data processing and intra-business tasks. If anything, bank teams will now be pushed to provide better customer support and constantly updated applications to allow users to handle their money in the quickest and least confusing manner possible.
Blockchain technology has changed the way in which users view classic currency and monetary value. DLT (distributed ledger technology) has made it possible for data to be stored and shared across networks simultaneously. Moreover, it is doing so in a decentralized manner.
The concept of non-fungible tokens (NFTs), decentralized finance (DeFi), cryptocurrency, and an increased amount of digital assets are set to completely rewrite the foundation of financial ecosystems — even at a policymaker level.
(The author is Mr. Rajith Shaji, CEO & Co-Founder, Volopay and the views expressed in this article are his own)