Noida: FinTech is enhancing the banking industry in India. We are witnessing several banks are now moving towards digitization as well as cashless and paperless processes. The existing FinTech companies in India are helping banks, business owners and consumers to manage their finances and operations on their digital devices. India is one of the world’s fastest-growing economies which has emerged as one of the FinTech hotspots in the last few years. Services like paperless lending, mobile and internet banking, secure payment getaways, mobile wallets are being adopted rapidly in the country.
On the second day of the two-day virtual BFSI – Finnovation Conclave by APAC News Network, the panel titled, ‘The Emergence and Growing Role of Fintechs in the Financial Landscape’ covered various aspects of growing FinTech and how they are enabling the banking sector. The panel was moderated by Rajneesh De, Consulting Editor, APAC News Network. Followed by empanelled speakers from the industry including Dipesh Karki, Co-founder- CTO, LenDenClub, Yashoraj Tyagi, CTO & CBO, CASHe, Akshay Mehrotra, Co-Founder & CEO, EarlySalary, Rajat Gandhi, Founder & CEO, Faircent, Nirav Choksi, Co-Founder and CEO, CredAble Akshat Birla, Founder & CEO, Finovate Capital.
Driving the panel, Rajneesh De, asked the panellists about what was the state of FinTech during the pandemic and what is the scope of its further expansion.
Was the pandemic a boon or a curse for the fintech sector?
Akshay Mehrotra, Co-founder and CEO, EarlySalary said, “The pandemic was an extremely interesting period. First, it gave us time to think about how to change the way we approach the consumers. Second, it allowed mass digitization and whatever the inhibitions like digital will take time to grow, and FiinTech will take time to emerge those inhibitions got diminished. Third, as we started recovering from the pandemic, the agility of early-stage companies are far larger than traditional. And we could grow and expand rapidly. And the fourth part is the clear partnership, the way of building our businesses, the openness of both banks to collaborate with fintech, across the industry has happened.”
Since the Fintech companies are born on the internet or the cloud. These are internet native companies and hence they are more technology savvy. Technologies like big data and artificial intelligence accelerated the growth during the pandemic. Dipesh Karki, Co-founder & CTO, LenDenClub said, “FinTech use Big Data, Machine Learning and Artificial Intelligence widely to monitor various accounts such as credit cash, investments with management. Even Robo advisor to some extent. With the advent of AI and big data today, BFSI can build a much richer insight about the customer as compared to the traditional or physical mode.”
FinTech supporting Banks and other NBFs:
Yashoraj Tyagi, CTO & CBO, CASHe said, “If you look at a very broad level, we all know that personal finances of customers are extremely close to them. And as a result of that, banking/finance has always been a high trust game. Before the pandemic that was a prohibitive factor for certain segments of the population who were extremely comfortable with traditional banking services. However, the pandemic forced that change in customer behaviour, through rapid digitization and simply because of simple facts, that people weren’t able to visit the branch closest to them for a banking transaction. With the increasing digital/online movement of personal finance, be it lending investments, insurance etc. we have seen that even banks have tried to make that move big time. However, such changes don’t happen overnight and as a result of that, we have seen increased collaboration between traditional financial institutions and fintech to help drive this change and make sure these changes happen smoothly.”
FinTech enhancing customer experiences for banks:
One critical aspect for banks and other financial services companies is enhancing their customer experience and delivering through omnichannel. It can be through video and social media, texts, bots etc. “ There are lots of innovations and digitalization possible to give a better UI and UX to the customer and digital is a clear path winner when people are adopting newer things. Three or four partnerships are emerging, while some fintech partners with traditional banks and are allowing them to compete digitally”, said Akshay Mehrotra, Co-founder and CEO, EarlySalary.
The future of financial mobile apps | Cybersecurity and Compliance:
BFSI is a highly regulated industry and therefore compliance plays a critical role. Rajat Gandhi, Founder & CEO, Faircent said, “Mobile apps itself doesn’t do anything. It is just a distribution medium. There are two parts – one is a regulated entity and another is a non-regulated entity. Now, services are being offered by a regulated entity, whether it’s via mobile app or website or any other distribution, whether a branch network is governed by whichever the regulator directory. The concern is around non-regulated entities. They could be legitimate entities, non-regulated entities doesn’t mean that they’re not legitimate. The issues are coming up when the non-regulated entities started offering financial services or became distributors without any regulatory oversight on them. From here the cybersecurity concerns are up.”
The challenges of mobile app security, mobile banking frauds, risk-based authentication, data privacy:
“When fintech is integrating into new banking ecosystems and have access to sensitive customer data, then obviously that fintech need to have robust enough to be able to manage the data in a secure environment. Unfortunately, there isn’t any real regulation for non-NBFC fintech yet, but it’s a matter of time before that comes out. RBI has already indicated that they’re working on a framework for this. Also, data security is at a very loose end and we have seen data being sold or data being used for purposes other than what was consented for. I think that’s really where the challenge is likely to be.”, said Nirav Choksi, Co-Founder and CEO, CredAble.
FinTech Vs BFSI migration on the cloud:
Akshat Birla, Founder & CEO, Finovate Capital said, “Fintechs are bringing systems that are cloud-based systems, which are easy to plug and play. They are providing the right bridge to bring in the right level of digitalization of service to their customers, bringing even to the extent of their going down the route by assimilating the big data and machine learning with all the data they have got. There is an immense amount of data out there which provides us with a great opportunity to leverage together with the BFSI segment. Right now the conversation is very cordial. FinTech needs the banks or NBFCs and NBFCs need the FinTech.”
Impact of cryptocurrencies on the financial landscape:
On the conclusion note, almost all the panellists agreed with the point on regulating cryptocurrency. They have also raised concerns about the protection of the consumer’s data. As India is not a very financially savvy market where people understand the impact of fluctuation and pricing. In the last two months, crypto has gone downhill. There are lots of challenges in the market around it. The market has to rectify that rather than looking at regulators putting more compliances in place on the aspect of the digital currency or the cryptocurrency. There is still from the policy level and the government side, it’s still not clear whether the transaction is legal or not.