India is one of the fastest-growing Fintech markets with the digital adoption rate almost double than it was before. The EY Global Fintech Adoption Index states that India has the highest fintech adoption rate globally of 87% which is significantly higher than the global average rate of 64%.
The Reserve Bank of India has changed its focus towards Fintech industries now, with a special department in place which will solely be responsible for policies regarding Fintech. As per a report by KPMG, the Indian digital payment industry is expected to touch $10.07 trillion by 2026. Intending to build a ‘cash-free’ economy, the policymakers are ensuring uninterrupted availability of safe, secure, and affordable e-payment systems. One of the key aspects to boost digital payment with a new spin would be, to engage customers and build trust.
Strategic partnerships towards customer engagement
The Fintech industry is dominated by various players that offers an innovative and transparent digital payments experience. Banks continue to maintain the reputation of being one of the most trusted providers in the financial services industry. Thus, it’s easier for banks to engage in strategic partnerships with new-age fintech companies to build credibility and gain trust to provide customers with the best of services. These partnerships will be beneficial for fintechs to build confidence and get access to a large consumer base by introducing new digital service offerings. This way banks and fintech both can utilize each other’s expertise to better engage with their customers.
Enable digital payments with greater security
The strict norms and policies introduced by the Reserve Bank of India, fintech companies will have to enable higher security with the payment products being offered. One of the major challenges faced by financial companies are cyber threats, thus making it key motive to strengthen payment gateway to safeguard customer data and transaction process. Along with the convenience of easier payment methods, fintech companies should invest in educating their customers to protect themselves from fraudsters. Creating awareness about safe digital transaction practices on how to protect their sensitive information can be one step towards creating trust among customers.
Also Read:- Growing Significance of FinTech in India
API-based platforms developed by tech providers have built ready-to-use solutions that include the latest security features like interceptors, tokenisation, risk-based authentication and more. Fintech companies can make use of these robust solutions and ensure greater security of sensitive customer information and transaction data. With India expected to clock the fastest growth in digital payments’ transaction value, it is critical for banks and other financial institutions to build digital capabilities for payment security and user convenience.
Digital transaction made easy in rural areas
Due to the increase in internet penetration, digital payment is experiencing an unprecedented growth and the current pandemic has further acted as a catalyst in the process. However, the rural section still prefers cash over digital modes and depends on local banks for their daily financial needs. Some of the major challenges includes:
● Lack of digital infrastructure
● Lack of merchant acceptance of digital payments
● limited financial literacy, impending wider digital adoption
Fintech can play a crucial role by partnering with local banks and provide the technology to support a digital payment infrastructure. Such collaborations will increase awareness amongst the rural customers and also help fintech companies to build trust in the local community. Co-operative banks can also facilitate merchant onboarding initiatives to improve digital payment acceptance in such areas. Offline solutions like dynamic PIN, QR code payments can also help address authentication challenges in areas with poor connectivity. This makes it easy for co-operative banks to roll out new-age banking products at a much faster rate while ensuring complete compliance and security.
End-User Experience through Modern-Banking
In an increasingly fast-paced and digital world, customers expect financial institutions, and banks to understand their needs and offer them a personalized solution for a hassle-free experience. While the Reserve Bank of India is focused on improving digital security &fraud protection, Fintech companies are reshaping their technology to provide an exceptional and secure digital experience for the customers. They are using AI, ML and Big data to understand customers more intimately and proactively to serve their needs in real-time. With best-in-class security, powerful APIs and all the required integrations in place, such solutions can help fintechs ensure higher payment success rates, and therefore improve overall customer experience.
Views expressed in this article are the personal opinion of Bhavin Turakhia, CEO and CO-Founder, Zeta.