Fintech is the digital revolution which has redefined the way financial business took place in the past. India has adopted fintech at a very rapid pace. Many start-ups have emerged which are embracing fintech, and many banks have also adopted fintech. The purpose of these new fintech start-ups is to utilise technology such as artificial intelligence in payments applications.
So what is fintech in the non-specialists terminology? Fintech is driven from the term financial technology which means that using technology it is changing the financial services industry. This has been adopted globally. While fintech India is still quite a new concept in the country, but it is progressing.
Financial technology has its agenda, in the way that it is customer driven. Fintech is a customer-driven approach. It is a way to spread awareness amongst its customers about the digital payments possibilities. From the financial industry aspect, another motive of fintech set-up is to make lending and borrowing available for all types of people who need capital. Since the current banking and finance industry uses credit history as a method of lending decisions, many individual borrowers along with small and medium enterprises end up suffering.
This is because although their credit history might be tainted but possess good cash flow in the present and future outlook could be promising with an intent to pay back the loan, banks and financial institutions still reject such applications.
How can fintech help in this situation? The answer is that since it makes use of the artificial intelligence and machine learning, it can help to create a lending score through a complete analysis using advanced data-driven and behavioural management models. Blockchain technology is the most amazing innovation of fintech. It is a digital ledger which stores all such data of customer which can be used whenever needed. Not only this, but it can also create a digital profile of customers who are not using banks for financial needs.
Another essential reason why fintech is the next big thing is that of the online payments transactions which have become the norm. It wants to provide payments solutions to all individuals belonging to any sector in the economy. Fintech India aims to transform the country into digital India.
However, the biggest challenge is to convince and familiarise the small and medium enterprises to adopt fintech payments solutions as it will help them in the long-run to make and accept secure payments online. The most significant apprehension of the small and medium enterprises sector is the cost of adopting fintech. But what they need to understand is that this will not only help them to scale up their existing businesses but also increase the profitability of the company.
Through the use of smartphones, fintech is changing the customers of businesses as well. It makes it easier for customers to access information and data based on their previous history. Fintech can also keep track of physical location as well as text messages. This way they can tailor the customer needs and provide a better way to address the financial needs efficiently.
Although all this sound is promising the actual challenge which fintech is facing is the lack of awareness amongst the financial sector. There is an utmost need to address this issue and make fintech adoption easier and smooth. Since many people do not want to learn about the advanced banking products, while many do not want any disturbance in the current routine thus resisting the change. This can be resolved through aggressive marketing which can be done by making the marketers understand this concept completely.
Fintech course is not a lousy revolution which cannot be adopted instead it should be considered a positive sign for the economy. It will change the financial industry for the better. Apart from this, it is also beneficial for customers to become financially sound.