Financial Technology or Fintech are innovations such as software, mobile applications, or algorithms that bring together the business owners and financial expertise at a single platform and enhance & automate the financial service offerings.
The Finance industry has expanded and observed global Fintech funding surpassing $9 Billion in the second quarter of 2020. It encouraged the innovators to come up with lucrative digital mediums to deliver seamless and innovative monetary management offerings to the banked and unbanked population. It can be concluded that technology has penetrated the financial service ecosystem deeply.
The Global Fintech Market was valued at USD 5504.13 Billion in 2019.
However, it is still unclear to many how and when technology started making its way into the Finance industry.
Flashback To Fintech
As per the experts, the recent 65 years proved to be the golden era for the development of the fintech industry.
1920s – The introduction of transactional cards
1960s – The introduction of credit cards
1967 – Barclays introduced the world’s first ATM in 1967
1990s – The advent of the internet
1999 – PayPal became the first electronic payment system or digital wallet
2009 – Cryptocurrency-Bitcoin- the digital currency was launched
Realizing Digital
The introduction of the Blockchain and bitcoins was just the beginning. To cater for the needs of the dynamic and competitive marketplace of the 21st century, the focus was shifted to delivering personalized solutions and user-friendly platforms driven by agile, DevOps, automation, AI/ML, blockchain, cloud, and other emerging technologies.
Therefore, global leaders emphasize awareness with the emerging fintech technologies to stay ahead of the competition.
Global Fintech Trends
Systems powered with Cyber Resilience
While 27% of the cyberattacks are targeted at banks or healthcare, the end-users are worried about the security of their personal information.
Robust firewall security measures keep the modern financial systems updated. Adhering to the best security measures helps in curbing cyber-attacks.
Capitalizing Big Data
Businesses have started relying on versatile solutions to manage financial operations. For instance, automating tax returns preparation, generating e-way bills among others.
With such critical information at stake, there can be scenarios of frauds and related risks. Modern financial management systems powered with big data thus play a major role in examining volumes of data to reveal hidden patterns, correlations & other insights. Besides it also helps the marketers to study the buying behaviour and other such patterns of the customers.
Digital Transformation with Artificial Intelligence (AI)
The relationship between AI and Fintech is going to be stronger and better in the future improving the operating costs. For instance, innovators are building solutions that can help the investors gather critical information, analyse them and make valuable market-reports for smarter investment decisions. Many banks are utilizing AI-powered platforms to make the best underwriting decisions and credit assessment processes.
Apart from these technologies, blockchain technology, smart contacts, RPA, agile, etc., make it to the list. Such innovations put the customer at the core, accelerate time to market, leverage the power of minimal viable product (MVP), eliminate legacy, and prepare smarter workforce & markets.
While these tech solutions are revolutionizing the financial ecosystem, it is important to acknowledge their impact on organizations across the globe.
Impact of technology on financial institutions
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Author
Rahul Bohra
AVP - Products • Product Management
Rahul Bohra is a techno-functional expert and has accomplished multiple integration projects for enterprises in various sectors like BFSI, NBFC, Manufacturing, and FMCG. He holds profound knowledge of implementing data-driven solutions, enabling businesses to make informed decisions in the fintech and taxtech landscape. His technical & analytical expertise has assisted clients in leveraging the benefits of automation and analytics to streamline their business operations and boost productivity. With the evolving fintech ecosystem, he has developed a strong understanding of financial data points such as GST, Banking, ITR. He is the subject matter expert for the DEPA framework and Account Aggregator; he is working with Sahamati to onboard FIPs on AA ecosystem building IT data schemas required.
