New innovations in finance technology have led to a complete shift in how the BFSI sector functions today
The Coronavirus pandemic has only accelerated the pace at which companies are now being forced to make their digital transformation investments. Data science, big data analytics, cloud, security, artificial intelligence (AI)/ machine learning (ML), and blockchain backed features and capabilities are some of the top trending technologies that now see increased popularity and demand within the BFSI sector.
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For banks to keep up with modernization needs of a remote-first global customer base, public/private cloud systems are becoming a priority. As customers start embracing a more digital-only business and transacting environment, these emerging fintech trends in BFSI will help pave the way forward.
As per an earlier study by Zinnov, banking and financial services (BFS) companies are making most of their digital investments in technologies such as data science, big data analytics, cloud, security, artificial intelligence (AI)/ machine learning (ML), and blockchain.
Welcoming a New Normal for BFSI
A combination of newer digital capabilities and platforms teamed with upgraded processes will help BFSI companies further comply with the norms of the new normal. Those businesses that already had a well-established digital process could adapt to the needs of today’s social distancing guidelines faster and with more ease because their fundamentals were already in place. In the recent years, even capital markets look at new fintech solutions to help reduce costs and boost operational efficiencies.
While on the one hand, automation helps promote certain promotes and capabilities, it also needs to help leaders understand how to address cash flow issues in time of a pandemic.
As companies adjust to new guidelines and requirements, though, what technologies will drive impact in BFSI? A few thoughts:
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Digital Lending Platforms
New-age digital lending solutions that comply with changing local regulations and norms help business and individual borrowers address economic hardships far more easily. With the influx of digital lending solutions, mortgage, loan servicing, debt collection providers can cut costs and serve the needs of various clients instantly. This helps boost brand reputation and increases adoption rate of the platform. The rise of low-code processing platforms further enables easier adoption of these tools across the organization.
A Boost to RegTech
Financial fraud and crime has been on the rise in 2020, not only have the numbers of these crimes gone up, the type and extent of these fraudulent activities are also evolving everyday. RegTech is therefore becoming far more important to FIs and banks today than ever before, with a partial/complete move to remote work in BFSI, moving the everyday aspects of the business to the cloud takes care of one aspect.
But there is a need to implement updated RegTech to ensure compliance and protection against these growing frauds.
Modern regulatory technology solutions now offer the possibility of implementing systems that help automatically monitor, analyse, organise, report, and take direct action on non-compliant events to prevent fraudulent activities.
WealthTech Find Its Place in the Spotlight
The financial hardships borne out of the ongoing pandemic further stresses the importance of better investment decisions and better need to streamline how money is invested, accessed and repurposed as capital for future business growth. In a digital only world, both individual and business leaders/owners need to plan for better investment practices. What BFSI companies need to now more actively focus on is reducing unnecessary operational costs (on fees/transactions) while offering a complete solution that better allows users to prepare for risk, plan for risk, allocate funds for future risk while growing profits.
Contactless Payments and Solutions Will Take a New Shape
There was no choice for the global marketplace but to move to safer contactless payment solutions during the Coronavirus lockdowns this year. In earlier reports, credit card giant, Mastercard reported a 40% jump in contactless payments, including their tap-to-play and mobile pay services.
The need to minimise interactions has led to more online transactions. As businesses and individual continue to adopt a digital strategy, newer advances in contactless solutions that allow users a more insight-driven approach that also helps mitigates risks will change the way contactless solutions function.
As the world continues moving through the pandemic, the BFSI sector will have to keep adapting to new technology trends and changing consumer behaviors. It will be interesting to keep an eye out on what’s in store.
