As the year reaches a conclusion, we look at significant advancements done in 2019 that can possibly change the face of the FinTech industry. With cheaper mobile phones and less expensive internet, things have become much simpler, with organizations battling to take advantage of the underbanked and clients searching for less expensive, yet better alternatives. The emergence of AI in FinTech, Cyber Security, Wealth Management, Use of Machine Learning for Quick Credit are some of the trends of 2019 set to change the paradigm of the FinTech sector in 2020. In the most recent year, the system has changed significantly, with governments and financial organizations likewise getting into the game.
Let’s revisit the top trends of 2019:
The emergence of AI in FinTech
The application of AI – particularly in the banking sector – is said to have a bright future as there are estimates of aggregate potential cost savings for banks from AI applications of $447 billion by 2023, with the front and middle office accounting for $416 billion of the total savings.
Mr Aditya Kumar, Founder & CEO, Qbera says, “The pace at which technology has been galloping in the last few years is remarkable at the very least. The banking and financial services (BFSI) sector as such is certainly no stranger to technological advancement. Over the years, and quite rightly so, it is this sector that has perhaps benefited the most through technological breakthroughs. Some areas where the influence of AI has been particularly pronounced are; Credit Risk assessment, Improving operational efficiency, Fraud detection, Automation through algorithms and messenger bots and Portfolio optimization.”
With the rapid pace of digitization and increasing interconnectivity in the FinTech ecosystem, cyber-attacks targeting sensitive financial information is on the rise, and have caused huge operational, reputational and financial damages to organizations. Also, the emergence of data ubiquity has brought the key issues of ‘data ownership’ and ‘data governance’ to the fore, compelling organizations to take efforts to tackle them.
Mr. Siddharth Kukatlapalli, Co-Founder & CBO, Syntizen says, “For consumers, security and data privacy form an integral part of FinTech solutions, and the onus for safeguarding the same lies with organizations. Going forward, building cyber resilience will become key for organizations to win customers’ trust and drive the adoption of digital solutions. After our successful journey with Aadhaar-enabled software solutions, we are offering Facial Authentication and Liveness detection. It will pave the way to penetrate into the international waters of the digital identity market.”
All financial sector survey participants viewed asset and wealth management as the third most likely sector to be disrupted. From a wider perspective, customer banking and fund transfer & payments industries offer palpable examples of how FinTechs are changing the financial sector with new offerings.
Bhupinder Singh, Founder & Group CEO, Incred says, “Our vision is to build a world-class, diversified financial services institution and with the acquisitions of Reliance in India and L&T in Dubai we want to make a foray into the exciting business of wealth management catering to Indians globally. Our aim is to build a client-centric, advisory led model which will provide a truly global experience to Indians all over the world. There are new emerging segments in Indian wealth for example entrepreneurs who have built wealth through stock options, professionals, women, etc. We want to be mindful of these evolving trends and focus on building niches that service these segments effectively.”
Use of Machine Learning for Quick Credit
Emerging technologies are having a far-reaching impact on financial services by assisting them in growing customer expectations enhanced through convenience and accessibility. Adoption of technologies such as artificial intelligence and cloud computing have positively influenced almost all components of the supply chain across the bouquet of financial products: payments, lending, savings, and insurance.
Jitin Bhasin, Managing Director, RupeeRedee says, “Fintech companies now are entirely automated customer journey wherein customers can get instant loan disbursals. This is possible because of our deep technology integrations like optical character reader (OCR) based document verification, alternate credit scoring and underwriting, instant fraud checks, and digital offline KYC. For quick scale and delivery of services, the firms use microservices architecture — a technique that structures an application as a collection of loosely coupled services. Besides, they also use technologies like PHP, Angular, .NET, MySQL, Kotlin, and Redis.”
Robotic Process Automation (RPA)
In the upcoming year, robotic process automation (RPA) will continue to impact financial corporations helping them to be more efficient, effective and will also ensure they meet central and state compliance requirements.
Anuj Kacker, COO & Co-Founder, MoneyTap says, “The key benefit of RPA is that it plays well with other existing technologies. RPA has the potential to adapt quickly to changing circumstances and learn accordingly, hence it enhances processes rather than replacing them. With our alternate data and lending models, we hope to reach new segments of consumers. We plan to expand the role of our tech and data teams to combine UI and AI – this will lead to customized credit solutions for diverse customer segments. Our vision is towards financial inclusion of underserved categories in India”.
Fintech is a big world with constant innovation. So, while banking is more resistant to change than some other industries, the changes are still happening, and they are happening fast. Fintech has a bright future and looks like it will produce some interesting products and services in 2020.
Also Read: Fintech Opportunity in India