The rapid technological advancement continues to drive disruptive fintech business models
The landscape of FinTech is changing at a lightning speed. With each passing day, we are encountering a radical change in the FinTech industry. With the new emerging technologies having the potential to transform the payments space, the Indian fintech market is estimated to reach $1.3 Tn by 2025, growing at a CAGR of 31%. Taking the conversation further, Mr. Bharath Raj, Director of Engineering and Site Leader of India Strategic Development Centre (SDC) at Blackhawk Network India shared more insights on the emerging trends and challenges with CXOToday.
- How is the role of technologies like AI and ML changing the fintech and payments space in India?
The fintech sector has undergone a massive transformation in the past decade, technologies like advanced AI and ML will lead the way in redefining the wider payment ecosystem in the coming years. With increasing quantities of payment data, organizations are required to enhance their capacity to rapidly study and analyze this data to create efficient and recognizable designs that can improve decision-making. From boosting revenue to uncovering new opportunities through an improved processing ability, next-gen technological models have the potential to disrupt the payment ecosystem in its entirety.
At Blackhawk Network, we use advanced artificial intelligence and machine learning to solve challenging problems in the areas of planogram optimization, inventory planning, demand forecasting, fraud prediction, risk identification, product recommendation, cloud capacity planning, and hosting cost optimization. AI & ML applications, over the last few years, have been significantly contributing toward top-line growth and bottom-line improvement for multi-billion-dollar gift card businesses. While providing an edge over the competitors, these technologies empower and enable Blackhawk Network’s business growth globally. That said, the digital maturity and the payment service providers’ creativity would be an important defining factors in gaining a greater competitive advantage by leveraging the potential of AI.
2. What are the 3 Trends that will continue to impact the Future of Digital Payments?
Mobile commerce revolution: In last several years, India’s mobile commerce ecosystem has flourished vastly. The e-commerce industry is booming because of the enhanced connectivity, accessibility of mobile devices and high-speed internet. The blurring lines between commerce and mobile will lead fintech players to deliver more effective as well as efficient, consumer-preferred payment experiences— including instant rewards, better choices, and more.
Voice-activated payments: Voice technology has already revolutionized how we browse the internet, make purchases, and interact with our devices. The integration of AI-powered smart assistants and voice-recognition technologies is set to bring a huge shift in how payments are made today. With voice-activated payments, smart assistants can directly access accounts for transactions and make payments frictionless. Seamless payment will lead the way in the digital transformation of financial services, and we will witness newer technological integrations remodeling the typical payment methods that we use today.
Banks and FinTech entering the metaverse: Metaverse is a three-dimensional virtual environment that mixes augmented and virtual reality with social media technologies to create a simulated digital environment. It is an ongoing trend penetrating the digital space and is transforming the way people connect, and businesses grow. In the fintech space, leaders are exploring how new solutions may deliver financial services by developing their own worlds in the metaverse.
The future holds exciting developments and utilization of the metaverse for e.g., virtual interactions, virtual training and virtual business. Leveraging metaverse technology to develop new business models will pave the way for next generation payment providers, and could give birth to metaverse wallets – similar to digital wallets.
- What are some of the challenges faced by the fintech sector currently?
Use of modern technologies: The rapid development of fintech continues to drive disruptive business models in financial services. While this has proven to be a great advantage for the space, the constant state of flux and competing upgrades that innovation brings, makes it a challenge for most tech companies to adapt.
Technologies like artificial intelligence, blockchain integration, big data, and machine learning can bring valuable benefits for companies looking for more clients and business opportunities. However, constant adaptation of these technologies will require experts to bring these ideas to reality to reap benefits. Tech has also changed customer demands and expectations. Open banking and personalization are becoming essential, and trends like machine learning are making waves in the ecosystem.
Talent war: While fintech companies are having huge successes in securing billions in funding to grow their businesses, recruiting the right talent to scale up their business is quite another matter and remains to be one of the biggest challenges the industry faces.
With constant technological progress and innovation in the industry, companies are looking for skills that are relevant to these developments. But the talent pool remains the same, which has resulted in a race for companies to attain these skills – starting a talent war.
The shortage of skilled tech talent has added to the challenge and the market is getting incredibly competitive for tech wizards with the right set of skills. Companies are adopting creative strategies to attract them. Few ways to approach the talent challenge are – upskilling/reskilling your employees and calibrating roles with future skills.