5 Ways FinTech Is Transforming India’s Banking Industry – Forbes Advisor INDIA
The banking industry has moved from physical to digital, and now to hybrid banking models. Thanks to emerging technologies and fintech companies using digital tools to transform the way we do our banking.
The use of Aadhaar card and video knowledge of the customer (KYC), as well as cardless cash withdrawals, onboarding of paperless customers, âtap and payâ via mobile are some of the first technological tools that reflect the acceleration of the digitization of banking in India. Let’s take a look at the five fastest ways fintech has brought more agility to banking and contributed to a versatile digital experience for users.
Advanced self-service capabilities
Gone are the days when consumers had to wait hours to get to the front line, complete paperwork, fill out forms, access customer service for help at banks. With fintech banking solutions, self-service capabilities provide customers with business processes that were previously only available through a physical branch.
These services are not just limited to the basics like checking account balances online or transferring money, but others like customers can open new accounts, opt for loans and buy insurance, all digitally.
It helps the client make the choice to understand their financial situation, learn about alternatives, and make better financial decisions for themselves and their family.
Application programming interfaces (APIs)
Ten years ago, the Reserve Bank of India (RBI) introduced NEFT and RTGS, followed by the National Payments Corporation of India (NPCI) which introduced IMPS. This was followed by the bank led by API. The operation is simple:
- In order for banks to perform their functions digitally and transparently, it is imperative to integrate their products and services with various third parties.
- To connect the two parts, they need API in the middle to communicate with each other.
- In a nutshell, an API is the bridge that helps banks and third parties securely connect and take advantage of each other’s offers in real time.
- An interesting example would be the money transfer requests sent by mobile wallets and received by banks during a transaction, thus providing a simpler and faster experience for the end user.
- Applying for a business loan, checking credit score, viewing balances in one place, was made possible by APIs.
- They allow banks and third-party companies to increase their strengths and complement each other, providing exceptional features and services to the customer in a better way than when they were doing it themselves.
While most Indian countries still preferred cash payments over the past decade, and point-of-sale or point-of-sale terminals had only started to be accepted around 2016, the rapid penetration of mobile internet services and demonetization have played a role in the wider Indian acceptance of digital payments.
The federal government has since urged people to choose to use online payment methods in the hopes of making India more economical. KYC bottlenecks have been resolved and fintech has grown to innovate in the payments industry to introduce new technologies at a faster pace.
It now takes a few seconds for a payer and a recipient to send and receive funds, which changes the way people spend and shop, increasing accountability.
So far, we’ve seen banks launch their own chatbots designed to meaningfully interact with customers and answer their frequent queries. With technological advancements, voicebots are likely to replace chatbots in the days to come. These voice assistants aim to enable consumers to interact with them using speech recognition technology supported by artificial intelligence and natural language processing.
What we’ve already seen in the form of voice searches on Google, Netflix, and various other customer-centric platforms, is also going to be married to the bank. Imagine a scenario where the system asks you to generate a new password or PIN or open a new account and you can do so without typing and instead using direct voice commands.
Iris, facial and voice recognition as passwords and the use of other forms of biometric authentication, validation chip for cards, invisible payments and thumbprint to validate payments are of other technological processes which are actively developed for banking services in India.
Neobanks are digital banks without physical branches. They offer a wide range of banking and financial services such as instant loans, mutual funds, savings accounts, term deposits, loan products, among others, which are easily accessible online or via the website or through a dedicated application in combination with other licenses. banks. This trend was accentuated during the pandemic, with many consumers looking for digital means of banking.
Although the journey of digitization has taken decades, it has accelerated exponentially as mobile data plans have become cheaper and the world has been grappled with the Covid-19 pandemic.
2021 is expected to provide organizations with the opportunity to leverage technological capabilities and drive digital transformation across the financial value chain far more than just an application. The rapid pace of adoption can fundamentally change a financial institution’s cost structure and a whole new set of customer offerings that have never been seen before.