By Rubal Sahni, Area Vice President & Country Manager India – Confluent
The fourth Industrial Revolution has ushered in a new era of technological advancements, reshaping economies, industries, and societies worldwide. As digital adoption becomes the norm, India’s financial services ecosystem has witnessed significant transformation and FinTech has emerged as one of the fastest-growing segments in the sector. Fintech startups are gaining traction and attracting significant investments from both domestic and international investors. In 2022, Indian fintechs secured the second-highest funding among all startup sectors in the country, raising an impressive USD 5.65 billion.
Further the trajectory of digital payments in India is on an impressive upswing, with an annual transaction volume escalation of 56% in FY 22-23, projected to quadruple by 2027. This surge is driven by a combination of governmental and RBI policies encouraging digital transactions, and the advent of FinTech technologies, bolstering the transactional infrastructure. At this stage, traditional financial institutions in India find themselves at a crossroads. While they have vast amounts of data at their disposal, their legacy IT systems and processes struggle to keep pace with agile fintech players. This growth is expected to continue as the Indian financial industry undergoes a digital transformation and the integration of real-time data becomes imperative to steer the nation towards its vision of progress and development.
The key to success here lies in leveraging real-time data to drive innovation and enhance customer experiences. By harnessing continuous, up-to-date data, financial institutions can create personalized offerings, make accurate market predictions, and effectively combat fraud. According to a recent study by McKinsey, organizations that fully embrace real-time data analytics are expected to achieve faster time-to-insight, enabling them to make data-driven decisions more efficiently.
Revamping technology for streamlined operations
Indian financial institutions must address the challenge of retaining skilled employees and modernizing their IT infrastructures. Leveraging technology to integrate multiple systems or migrate to cloud-native platforms is crucial to optimize resource utilization and bolster operational efficiency.
Collaborating with providers offering fully managed cloud-native platforms can empower financial institutions with real-time market insights and enable them to focus on strategic tasks. Centralized technology stacks allow for greater visibility, facilitating the launch of new services, pricing strategies, and investment decisions.
Enhancing cybersecurity measures with real-time insights
As digital finance gains prominence in India, the risk of cybersecurity threats and data breaches also increases. According to the RBI, the number of reported cyber fraud incidents in the Indian banking sector were 13,530 in FY23.
With the union finance ministry’s statistics indicating that recorded fraud cases in digital transactions have almost doubled from 2022-23, Indian financial institutions must build robust technological infrastructures to detect and respond to fraud in real-time. The scale of fraud in India underscores the imperative for innovative solutions that can effectively curb fraudulent activities plaguing digital payment systems.
This is where data streaming emerges as a game-changer, offering real-time insights and rapid response mechanisms that can swiftly identify and neutralize suspicious transactions. Event-driven architecture and data decoupling enable the analysis of large volumes of data instantaneously, helping to detect even the smallest anomalies and mitigate potential damage.
Empower next-generation customer experiences with data streaming
In the age of digitalization, meeting customers’ demand for hyper-personalized experiences is paramount. Real-time data streaming allows financial institutions to offer tailored services, such as instant loan approvals, seamless digital verification, and real-time credit scoring. By providing a one-stop platform for multiple financial services, financial institutions can build strong customer loyalty and explore cross-industry partnerships to expand their offerings. According to a survey by Accenture, 82% of Indian consumers are more likely to engage with a financial institution that offers personalized services and experiences.
The path forward: leveraging real-time data for growth
For the Indian financial industry, the successful integration of real-time data is not just a phase; it is a fundamental step towards embracing the digital future. By bridging the gap between back-end processes and front-end customer experiences, financial institutions can foster innovation and capitalize on the myriad opportunities offered by real-time data. As the industry continues to evolve, financial institutions that effectively leverage real-time data will emerge as frontrunners in this transformative era.
In the dynamic Indian financial market, the strategic utilization of real-time data is essential for financial institutions to thrive. From enhancing operational efficiency to offering personalized customer experiences and combating fraud, the power of real-time data will be the driving force behind the next phase of India’s digital finance revolution. As the industry continues to grow and innovate, financial institutions that adopt real-time data capabilities will be well-positioned to lead the charge in this transformative era.