Disruptive technologies that will help drive Digital Finance

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Disruptive technologies have dominated the digital finance space over the years. Financial Technology (Fintech) has come a long way and the pandemic has certainly helped it gain exposure by creating a need in banks and financial services organisations to adopt innovative technologies to drive more business and generate better ROI.

Fintech companies help financial services (finserv) organisations in their digital transformation journey to create a digital footprint across tiers and build a truly-digital marketplace. Fintech companies play a crucial role in building these disruptive technologies and helping finserv organisations today.

Here are 5 Disruptive technologies that will drive the next wave of digital finance.

Digital Lending: One of the key areas that have managed to bring more business and underwritings – than any other channel – is digital. Digital has helped financial services (Finserv) organisations to penetrate even the most rural parts of India to acquire new users and expand the organisation’s digital lending footprint.

Digital lending has helped both the lender and the recipient by reducing obstacles and optimizing the lending process. Some Finserv organisations have started accepting digital underwriting as well.

Digital lending has certainly helped bridge the gap between the organisation and the customer, helping the organisation in faster go-to-market and the customer in a seamless digital experience.

Pre-Approved Loans (creditworthiness with AI/ML): Fintech companies are helping the lending organisations to identify and segregate users basis their demographics, income, risk appetite, credit score, etc. to accelerate “go-to-market”.

Fintech companies are using AI/ML and to study user behaviour, interests, social engagement, etc. to identify user risk and credit potential. This has helped organisations to introduce a new service known as ‘pre-approved loan’ – which is a set amount approved and offered based on user’s history, credit score, risk, etc. which helps the organisation to “go-to-market” faster, reduce operational redundancies, and process more loans.

Payables/Receivables Consolidation: A lot of trending mobile applications and web-based SaaS companies are offering payment/account consolidation to their users. These companies consolidate all your payables and receivables in one place, helping you with better visibility across your finances.

Receiving payments with one click, sending notifications, reminders to your payers, linking your bank account with a UPI ID for seamless payment processing are some of the features offered.

Neo-banks: Neo-banks are a result of the new generation’s preference of convenience over loyalty, and the cut-throat competition between banks to acquire every customer and leapfrog each other. Neo-banks are digital-only banks that offer the same set of services that their brick-and-mortar brethren do.

Unlike a traditional bank, the customer on-boarding, engagement, offerings, and other banking services of neo-banks are completely digital and involves no in-person engagement whatsoever. If neo-banks are any indication, in a few years, they will soon replace their physical brethren, and all transactions will become digital, thereby making ATMs redundant and obsolete.

Blockchain: Fintech companies have adopted blockchain to facilitate financial services organisations to build a robust and secure foundation for their existing payment systems. Fintech companies are helping finserv to create a secure infrastructure with the help of blockchain to facilitate the next big wave of digital payments.

Fintech companies have leveraged trending innovations such as AI/ML/Blockchain to enable financial organisations to “go-to-market” faster, optimize their operations, and provide a safe, secure and seamless experience to their customers. This will certainly help finserv to build the next wave of digital financing.

(This opinion piece is written by Neelesh Kripalani, SVP & Head – Centre of Excellence – Clover Infotech. The views expressed in this article are of the author.)

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