In the past couple of years, we saw an inflection point where digital went from being an emerging element of society to becoming a required element for much of society, and that helped push the BFSI sector further and faster to get embedded within the customer’s lifestyles for convenient access. This trend was already evident before the pandemic, but it tipped over the edge. And so, when we talk about digital-first, with respect to banking and mobile payments, we really see the fact that for most customers, digital is their primary way of engaging for services.
Digital Customer Experience
Now, and well into the future, BFSI entities will have to accelerate the implementation and adoption of new cloud technologies powering futuristic changes in a very definitive way to turn the possibilities into practical. Low friction, low latency, with an element of experience design, and ZeroOps is necessary for its scalability.
Everyday financial services essentially become experience-driven and will be entirely virtual facilitated by platform-based models, fuelled by digital channels leveraging data analytics on the cloud, and made faster and safer by blockchain technology.
Open Banking
The Indian open banking ecosystem continues to thrive with active support from the government as well as the market. With the launch of Account Aggregators, API readiness of banks & NBFCs, and entry of multiple neobanks, Insuretechs, India has become a role model for Open Banking Deployments.
IndiaStack continues to revolutionise the fintech ecosystem through the initiatives of government-supported frameworks like e-KYC, E-Sign, AEPS, UPI, e-Marketplace, OCEN, etc. which provide potent rails for Open Banking to grow.
Also Read | BFSI sector adapting a dynamic cybersecurity stance
Open banking opportunities make banking offers more appealing to customers. With growing competition in the banking sector, it’s important to create holistic products and platforms to personalise the services and product offerings. If banks and fintech companies go hand in hand, open banking will bring benefits to every party involved.
InsureTech
It’s no surprise that InsurTech has become the new fintech and has become a powerful driver of change in the insurance industry. The combination of many intermediaries in the supply chain, each one taking margin, together with the inefficient friction that goes with it has fuelled the rise in InsurTech and become the services of choice for consumers and companies seeking to appeal to a consumer which is seeking the fastest, most reliable way to make decisions.
The interconnectivity between insurance technology and consumers’ lives is increasing rapidly. There are going to be more insurers leveraging IoT devices, environment sensors etc. to move ahead with pay-per-use, an emphasis on loss prevention, restorative services, and more.
Perhaps the speed and ease with which self- automating smart contracts could be changed could see more insurance policies that reflect actual personalised risk in a real-time manner.
Digital Currency
A digital rupee will be introduced by the RBI using blockchain and other technologies will give an impetus to the digital economy. The banks in India will move towards the banking 4.0 model, and it will enable banks to innovate at speed and scale to expand their product and services through partner ecosystems. Furthermore, this will simplify the lending process for credit delivery to diverse segments, demographics, and geographies.
Fraud Defence
Right now, the fight against cyber fraud is waged within our phones and computers, but that war will soon take on a whole new dimension. When we move away from these devices to everyday wearables, cybersecurity needs to take on a whole new domain. The war on fraud will be fought in front of our eyes and this will have massive implications for the brands, businesses, and individuals in this new decade as we enter the metaverse.
Identity verification and authentication solutions that worked in the past may no longer be as effective. Behavioral and biometrics offers a combination of risk signal and physical anchors to create an additional layer of defense without negatively impacting the consumer experience. And by pairing it with digital identity intelligence, businesses can gain additional risk signals across a spectrum of risk events such as opening accounts, logging in and making payments.
As online fraud evolves, so too must fraud detection and prevention solutions. Regulations play an increasingly prominent role in how customers interact online and what personal information can be collected and used, making identity verification and authentication even more tricky.
Zero-Trust Security
The latest catchphrase in cyber security might as well be “ZTNA” In the realm of enterprise security, zero-trust is increasingly becoming a universal ideal. As cyber breaches and attacks get increasingly avant-garde, adopting a zero-trust approach to enterprise security
is probably the only way to safeguard the business against threats.
With an approXimately 60 per cent growth rate for ZTNA, the market is increasingly converging toward an SSE agent-based architecture for the majority of deployments and agentless-based deployments in the case of unmanaged third-party access.
Also Read | BFSI sector strengthening its defence and incident response systems
Organisations are realising the dual benefits of more flexible workforce access, coupled
with the risk reduction achieved by following a broader zero trust strategy.
Conclusion
Digital acquisition is becoming the main modality of growing financial services brands. Their acquisition cost is very low per customer.
“The BFSI sector has undergone large-scale disruption over the past few years. The future is going to see the adoption of smart solutions like cloud computing, AI, ML, blockchain-based communication, and new marketplace models with fintechs & Insuretechs.”
New technologies are spawning, and new operating models are emerging for BFSI. We see big tech, fintech, and insure tech also getting into the play, and certainly grabbing market share. But also becoming an ecosystem partner and cooperating in this space, and the rise of other supporting players, such as cloud providers, data providers, and so forth.
Views expressed by: Byju Joseph, Chief Technology Officer, Future Generali Life Insurance Limited.
