Covid-19 is clearly pushing us further down the fintech, digital road. Technology and digitisation of businesses is no longer ‘nice to have’, but is a necessity. Fintech companies are now revamping the financial industry trends.
Zaggle builds world-class financial solutions and products to manage the business expenses of corporates, SMEs, and startups through the automated and innovative workflows. Raj N, Founder and Chairman, tells us more. Excerpts from an interview:
DQ: How are you witnessing cloud and big data analytics playing a role for growing fintech in 2021?
Raj N: Adapting to a contactless and faceless business processing environment wasn’t a choice, but a compulsionand organisations are recalibrating themselves to ensure that they remain relevant in these times by doing whatever is necessary for business continuity.
The impact that technologycreated during the Covid-19 pandemic was huge and we have seen a distinct shift in Tech adoption—from being an enabler to a positive disrupter.
Today, cloud computing has been the main driver of efficiency and cost-effectiveness. It has enabled companies to advance their business models and deliver better services at a lesser cost. This has been done in an effective manner to accelerate workflow and make them secure and more customer-centric.
Data-driven strategies help businesses to compete and innovate, and leads to better analysis. With digitisation being the new normal, Big Data and cloud computing will play a major role going forward.
DQ: What is the role for AI/ML and IoT in fintech for 2021?
Raj N: Automation, along with AI/ML, will continue to drive Businesses. New technology will feed processes and engagements that will deliver new levels of efficiency with products that are tailored to business outcomes and individual customer preferences.
As we keep advancing, AI and ML are becoming revenue generators or cost savers, and actually innovating and pushing businesses forward. The demand for easy and hassle-free services will continue to accelerate even after this pandemic is gone.
Digitizing processes will no more be limited to handling internal systems and processes, but also those associated with outside stakeholders. The seamlessness that technology has ensured across the many processes including those involving dealers and distributors or inter-state locations of businesses will keep many focused on what kind of technology can be inducted to make it smoother.
AI and ML will continue being the most important components for an organisation’s overall progress going forward.
DQ: How do you see RPA playing a role in fintech for 2021?
Raj N: Covid-19 has accelerated the demand for Automation. With the present contactless and social distancing norms, adopting automation is the most optimal solution today. It ensures safety, efficiency, productivity and profitability for an organisation.
By automating time-consuming processes, organisations today are boosting their overall speed and efficiency, while benefiting from comprehensive analytical insights.
Automatically controlling critical tasks removes the risk of human error and helps avoid losses and gives a competitive advantage to react quickly ensure faster decision making.
With digitisation continuing to be the necessity going forward, RPA will play a major role for efficient workflow and will help in running smooth operational procedures.
DQ: How do you see the evolution of 3D printing and biometric security systems for 2021?
Raj N: Since people are going to be quite hesitant to touch things going forward, touchless Biometrics like facial recognition, iris recognition solutions will be high in demand.
Going forward, 3D printing will become very important since its inexpensive and is quicker at creating parts within few hours, it is cost effective and it results in efficient outcome at a fast pace. Since they provide optimistic advantages, 3D printing and biometric security systems will evolve more.
DQ: What is the role for Defi or decentralized finance in 2021?
Raj N: DeFi, many FinTech leaders argue, is the world’s answer to the 2008 financial crisis since there was a major need to create an ecosystem dependent on every link in the chain, rather than centralized authorities hence the term “decentralized finance.”
The concept of blockchain, a decentralized ledger, was designed to ensure financial transactions would be transparent. Moreover, transaction approval would come from network individuals incentivized to approve them by solving complex mathematical equations or by network consensus voting.
Users can now find financial services on the distributed ledger for loans, insurance, margin trading, exchanges, etc. But there is still a way to go since not enough consumers are comfortable with DeFi quite yet.
Nevertheless, now the world is experiencing another economic crisis brought on by the Covid-19 pandemic, and DeFi is finally getting its day in the sun.
Decentralized finance, (DeFi) wasn’t heard much beyond murmurs about bitcoin and a mysterious new digital technology called blockchain. However, the pandemic changed everything! Since May 2020, decentralized finance projects rose a whopping 2,000 percent, according to DeFiPulse.
DQ: Will there be growth in digital-only banks in 2021?
Raj N: Digital-only banks are the banks that provide various virtual banking services like P2P transfers, contactlesstransacting, no transaction fees, etc. These banks are equipped to buy various cryptocurrencies like Bitcoin, Ethereum, and many more, and have gained popularity in a short span of time in the market.
This is majorly because it offers utmost convenience to their customers by eliminating tedious paperwork, and the traditional way of working, waiting in long queues, and the need to visit a bank physically. Digital-only banks will see a huge surge in the year 2021.
This surge will cause a significant drop in the number of people who visit the bank physically. As per a report, this drop will be of 36% from the year 2017 to 2022 and its main cause will be the rise of digital-only banks.
DQ: How do you see Reg-Tech taking off?
Raj N: The financial industry is a regulated sector and FinTech innovations need a simultaneous growth of Reg-Tech. This indicates new tech solutions that enhance and organize regulatory procedures. Reputed financial actors, tech firms, and legislators will work together for introducing new regulatory innovations; however, these require time for maturing.
The area of fintech most relevant to compliance officers’ responsibilities is probably RegTech. Regulatory processes are increasingly being managed through technology.
The RegTech marketplace can be split into a number of areas: risk and compliance management, identity management, regulatory reporting, fraud management, and regulatory intelligence. RegTech applications will continue to provide popular, embedded solutions for firms in areas such as compliance monitoring, financial crime, AML/CTF, sanctions, and regulatory reporting.
DQ: Will there be growing space for open banking?
Raj N: With FinTech’s coming in the market and building a new value proposition for customers, Banks have adopted a collaborative approach to work together and develop new products, business models, and value drivers for customers. Emerging demands from FinTech’s led to banks opening up its services and data through APIs and drive API-enabled banking. This is now widely been termed as Open Banking.
There are various business models evolved across financial services, be it payments, lending, investments, etc. FinTech’s have mainly benefitted in the entire business of open banking, big tech firms.
Open banking made things easier for them as they could use banking services from banks through APIs and build better customer engagement and value proposition for their set of customers. Before getting into the advantages of big techs having others to fast track their financial services, it is essential to look at the transition made by some of these big techs into banking.
DQ: What will be the impact for blockchain on fintech for 2021?
Raj N: Blockchain has completely transformed the FinTech industry in 2020. With this cutting-edge technology, the transactions can be done in a safe and secure manner with help of this technology.
Due to this, banks and financial institutions are adopting blockchain to leverage its benefits. As per a report by Business Insider Intelligence, around 48% of banking representatives think blockchain will have the biggest impact on banking in 2021 and beyond.
One critical thing about blockchain is that it not only helpswith technology, but also a new philosophy finance, which focuses on minimizing centralized procedure. In blockchain, once the data is recorded in the system then it becomes extremely difficult to modulate thus it remains protected.