FinTech has grown exponentially in the entire duration of covid 19. The Indian FinTech market grew to USD 766.90 billion in the financial year 2021. The FinTech industry is not more than a decade old, but the progress made in this field is exponential. FinTech took a major surge in tier 2 and tier 3 cities along with the metros. With restrictions in travel and public gatherings, a massive transformation was the only way forward for all businesses.
Top fintech trends of 2021
E-KYC
E-KYC or electric KYC was introduced and encouraged in 2021. Hence, video KYC was launched which verified the authenticity of the user digitally with the help of the Unique Identification Authority of India’s (UIDAI’s) Aadhar. The current E-KYC process includes 4 steps that are: PAN card verification, Aadhaar card verification, video call confirmation based on PAN and Aadhaar card, and facial identity check based on the photo of PAN and Aadhaar card.
Open Banking
An innovative force in finance, open banking is a great platform that merges banks and technology. Open banking provides data of consumers to authentic apps through data sharing using APIs and AI. These platforms can help in providing seamless financial services, sharing the desired data with other financial institutions by relying on networks instead of centralization. Tech companies entering banking and payment services are leading the innovation front even in tier 2 and other smaller or remote regions.
Robotic Process Automation (RPA)
RPA technology is assisting financial institutions and traditional banks to automate repetitive mundane tasks, enabling the staff to focus on more complex and superior services. RPA can be helpful in account status, personal information, application status, account details, data entry, and many such tasks. RPA helps by saving up to 25% to 50% cost and processing timewhile maintaining a lean process.
AI and ML
The fintech application using AI and ML helps the user save their finance by assisting them to take investment decisions quickly, assistance provision of queries, risk assessment, forecasting, data management, automation, managing cybercrimes, and many more. AI-based platforms can learn from one consumer and improve the service for other consumers.
Trends expected in the year 2022
The country saw a FinTech boom in the past year. Here are some upcoming trends that are likely to evolve in the FinTech space this year.
Also Read: FinTech Industry Growth Outlook 2021 and Future Trends for 2022
Bank as a Service
“Bank as a Service” widely known as BaaS provides services effectively and efficiently as it possesses additional features to provide financial services established on open banking. Traditional Banks need to incorporate with FinTech industries and with a service composable or modular architecture to have steady growth and innovation.
Central consolidation
Consolidation or merging on a higher level is expected in the upcoming year, especially in the neo rational banking world. They are expected to merge with fintech to update themselves in terms of technology, providing a wider range of services and a better consumer experience.
Core platform transformation
Traditional banks are focusing on building real-time platforms for their consumers. The platform will support digitalization, cloud, API, and their existing service. Core Platform provides a back-end approach that processes daily banking transactions and commands updates to accounts and other financial records.
Voice for FinTech
The most natural form of communication is the voice and one of the hardest modes to replicate – voice assistance can prevent fraud as it cannot be duplicated. AI-enabled voice assistants can handle payments, card activation, password resets, and set payment reminders for customers, freeing-up customer-service teams to focus on more complex customer queries. Many new-age fintechs have also enabled voice-based payment systems.
Going beyond QR to Tap & wave pay
QRs codes have eliminated the need to swipe a card. With NFC-based payment systems, contactless payments for small-ticket items are two times faster than the traditional card or cash-based transactions. quicker and even more hassle-free. Through NFC-based wearable devices, payment service providers have created rings, payment bands, and smartwatches to help customers make payments, without having to worry about theft.
Payroll FinTech and wage access product
New-age fintech companies’ partner with organizations to provide financial services to individuals and the company as a whole. Using the payroll feature provides various advantages like real-time payments, and salary advances. Wage accessproduct helps the employee to access a portion of their unpaid salary before the payment date.
Also Read: Fintech industry disrupting rural financial services market : Praveen Dhabhai, Payworld
Wealthtech
Wealth Management Technology widely known as wealth tech consists of technological innovations like AI, big data analysis, and SaaS to manage financial assets like savings and investments. Wealthtech is advancing in various terms like new investment tools, Robo-advisors, non-fungible tokens (NFTs), digital brokers and Robo-retirements.
Bottomline
2021 saw a larger adoption of tech in the financial sector. The sector saw large investments, growth in career opportunities, and increased consumer satisfaction of the traditional finance consumers. This year too, new technology will continue to disrupt the financial industry. With emerging trends replacing legacy systems, FinTech will transform traditional banking into a frictionless experience.
Views expressed in this article are the personal opinion of Akshay Mehrotra, Co-Founder and CEO, EarlySalary and Anil Sinha, Chief Technology Officer, EarlySalary.
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