It is no secret that fintech firms have been reshaping the business landscape in the last few years. The industry is expected to grow to $698.48 billion by 2030 growing at a CAGR of 20.3% in this decade. The frenetic pace at which this sector is growing is an indicator of the speed at which the growing customer base is embracing new technology in every area of life. Fintech companies have played the leading role in the inclusion of futuristic technologies to create better and safer customer experiences.
Offering Value in Payments
The cashless payment system has single-handedly transformed customer behaviour. With the ease of completing transactions be it shopping, trading, buying a financial product or paying for any service, digital payments using the smartphone have revolutionised the way customers approach payments. Most businesses have introduced online payment options to provide their customers with an omnichannel buying experience. The days of carrying cash or cards in the wallet have been replaced by UPI and digital wallets which offer safety, convenience and flexibility. Without even realising it, payments have completely evolved over the last couple of years and the use of physical cash has become passe. The comfort of using your smartphone to pay for all your transactions with a single tap is unparalleled. Today, you can pay for your groceries, your utility bills and even your auto-rickshaw ride with your phone. Fintech has irreversibly changed the way transactions are completed and it is hard to imagine that none of this existed till a few years ago.
Putting the customer first, anticipating their needs and creating solutions that exceed their expectations has become the new normal in the fintech world. The leaders in the sector are constantly creating innovative solutions that preempt customer needs and resolve them before they even request them. Businesses are increasingly using Artificial Intelligence and Machine Learning to proactively understand customer needs and fulfil them. Whether it is in the form of AI-powered chatbots or voice-activated website navigation, fintech companies are focused on providing a delightful customer experience. Instant loan apps, stock trading apps, and digital wallets are all examples of how fintech has simplified financial transactions and democratised the playing field. Today, anyone with a smartphone and internet can manage their activities in the palm of their hands. Fintech solutions have successfully eliminated the time and physical limitations of banking by being available anytime, anywhere. The ability to access centralised databases in the blink of an eye using APIs has made customer verification so easy that loans can be processed or accounts opened in minutes. This crash in time and associated costs have virtually revolutionised the way credit and financial transactions are perceived by customers. Transferring funds using the smartphone has made transactions quick, efficient and seamless while maintaining the safety of customer data.
Standardization, Disruption, and Regulations
The government has issued regulations to ensure proper governance of the fintech sector. The first set of directives covers those in the actual business of digital financial services like lending, banking and payments. The second set of directives is for businesses using fintech technologies. The third set of regulations relates to data privacy and data sharing to protect the customer data that is available to fintech businesses. In India, all fintech lenders need to be authorised by the RBI to participate in lending activities.
Gig Economy is on the Rise
The digitization of businesses has led to the creation of tremendous freelancing opportunities for professionals as geographical limitations are no longer a handicap. Remote working has become a common feature as the pandemic forced enterprises to move to hybrid work culture. The benefits of hybrid work culture have been the wider access to professionals with specialised skill sets who may have been limited by the geographical boundaries earlier. Fintech technologies have helped to include the hitherto unbanked sections of the population and introduced them to organised credit.
Integrating the Role of Leadership
The role of progressive and visionary leadership is all-important when it comes to new sectors like fintech. Leadership needs to be able to envisage the future and be ahead of the curve when it comes to taking bold business decisions. The future of business lies in digital transformation and it requires a pragmatic leader with the foresight to set the enterprise on the right path. Enterprises need to adapt quickly to evolutionary changes in the landscape to survive and thrive in such a challenging environment.
Globalization and Emerging Markets
The benefits of fintech are so obvious that they are finding audiences in both developed and developing countries. New markets are emerging every day as wider customer bases are willing to try out new technologies that can make life easier. India is a huge market for fintech. There are over 658 million internet users in India and over 500 million smartphone users and these numbers are only expected to grow at a scorching pace in the coming years. As fintech advances rapidly, customer experiences are bound to become more intense and immersive as virtual and augmented reality will assist in simulating the real world. Firms will move towards offering omnichannel experiences to their customers where they can seamlessly integrate online and offline experiences to complete their transactions according to their convenience. Geographical boundaries are expected to blur as the world becomes an integrated marketplace.
Fintech companies are leading the change in the banking and finance ecosystem by creating new business models that disrupt the status quo. Traditional banks are no longer able to ignore the competition posed by fintech and are building their own fintech interface or collaborating with existing fintech players to offer their customers a better user experience. Times ahead are going to be very exciting as fintech companies will continue to apply new technologies to make use of the data available and create more proactive responses that will exceed customer expectations.The regulators will also assist in redefining the rules for the changing business landscape and enable businesses to create more customer-centric solutions.
The article has been written by Praveen Paulose, MD and CEO of Celusion Technologies