By Mr Praveen Paulose, MD & CEO, Celusion Technologies
Technology has transformed the banking & financial sectors over the years. It renders immense scope in diversifying the solutions more for customer’s easy usability. The entire onboarding process of a customer, the KYC verification and system updation etc are all available at the tap of your fingers against long queues, physical statements etc. The accuracy and precision have increased in these processes cutting them short to a few self-explanatory steps.
Banks have long been mostly associated with interminable/ endless queues and mountains of paperwork. As a result of technological advancements, the need for manpower and documents have declined considerably. Streamlining client services and system upgrades are quickly gaining prominence & acceptability in technology implementations.
Technologies that have shaped the future of fintech
The financial technology (FinTech) business is constantly undergoing change. Some of them are as follows:
Artificial Intelligence: AI is responsible for significant value creation. These technologies automate a variety of financial services, including the detection of fraud, the management of investment portfolios, and the creation of financial planning. AI and machine learning will aid the financial services industry in improving their cybersecurity and anti-money laundering activities. A big number of institutions are deploying AI and ML technologies to detect any suspicious or anomalous transaction that might be connected to money laundering.
Blockchain: The rising relevance of blockchain technology is another trend that will have an influence on the future of FinTech. The blockchain is a distributed digital ledger that may record transactions on several devices at the same time. The technology supports cryptocurrencies such as Bitcoin, but it also allows for the development of a wide range of other applications.
Digital Payments: One of the most significant factors impacting the future of financial technology is the rise of digital payments. Because of the expansion of mobile and internet services in recent years, consumers may now make payments utilizing their mobile devices (smartphones, tablets, and Computers). As a result of this tendency, digital payment systems such as Google Pay, PhonePe, and Paytm have grown in popularity. Customers may use their mobile devices to pay using these systems, eliminating the need for cash or credit cards.
Digital Verification: As part of money laundering regulations & guidance provided by the industry globally, it has been outlined that Identity verification is a must during Know Your Customer (KYC), Customer Due Diligence (CDD) or age verification. The personal data collected are compared and matched using advanced technologies & trusted data sources to avoid identity fraud during any transactions. It helps in speeding up the verification process against any conventional manual data records.
Insight from the budget 2023
Budget 2023 aims to boost India’s financial ecosystem and propel the FinTech sector towards a prosperous future. FinTechs and NBFCs aiming to bridge the gap and enhance access to financial products among the unbanked populations must be encouraged with tax breaks in order to fulfill the country’s goal of developing a sound, inclusive financial system.
In order to boost fintech services, Budget 2023 proposes expanding DigiLocker, a digital certification repository. The measure is likely to streamline the know-your-customer (KYC) procedure and allow fintech companies to provide more creative services. Extending the reach of digilocker would enable more smooth loans to underrepresented communities while also lowering lending operations costs.
Permanent Account Numbers (PANs) given by the Centre will be used as a uniform identity for all digital systems of selected government entities, including the new DigiLocker for enterprises.
Conclusion:
The banking business has undergone a radical transition as a result of technological advancements. The digital age is changing the way people connect and do business on a daily basis, and technological breakthroughs continue to shape the future of banking globally. The growing desire for a digital banking experience among millennials and Gen Zers is transforming the banking sector as a whole.