Role of Digital Technologies in Transforming Financial Services
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Role of Digital Technologies in Transforming Financial Services

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Role of Digital Technologies in Transforming Financial Services

Mahesh Shukla, Founder, PayMe India

While standing at the cusp of the fourth industrial revolution, worldwide markets are interconnected like never before. Such intermingling has stiffened the competition in both domestic and international markets for which the businesses have to rely on digital innovations and cutting-edge technologies to stay ahead of the curve. More and more industry players are jumping on the bandwagon of digital tech adoption where Big Data, IoT, Blockchain, Cloud Computing, and Artificial Intelligence powered tools are helping them make better business decisions and achieve high customer satisfaction. According to the research by TechNavio, the global digital business support system market size is projected to grow by nearly $2.96 billion by 2023 at CAGR of 15 percent.

Well, finance is one of those sectors that realized the underlying potential of digital technologies and platforms quite early. Adopting latest digital tools, financial institutions and companies provided the customers with what is considered to be urgent requirements – transparency and reliability. For themselves, they figured out the ways to improve financial service delivery, maximize operational efficiency, cut back business costs & expenses, expand its market presence, and fulfill the overwhelming customer demands. And, there sprung the whole new concept of FinTech – which has remarkably reformed the lending space in the finance sector. Offering lending and investment services through online quickly and efficiently, FinTech startups have grown manifold between 2015-2018, adding over 1,300 new startups to the base of existing 730 FinTechs, says Economic Times.

The secret to FinTech success is not only the use of advanced technology in delivering faster services to the customers, but also the timely and wise implementation of tech solutions to offer them unique services. Whether it is product innovation or customization, financial companies are harnessing technology to accomplish their individual goals and meet their targets. On a daily basis, the companies produce enormous data pertaining to market trends, customers, and employees which used to go in vain decades before. But today, companies are designing all of their strategies on the basis of this vital data, precisely targeted to get desired results – customer acquisition as well as retention.

Customizing Financial Products
To deliver customers more value in less time, price is the present need of the time in the financial market. Earlier, limited financial products and services, as well as strict policy constraints were the reasons why masses could not avail financial assistance at the time of urgency. The tech-driven financial services companies are now understanding the needs of population and preferences and identifying their challenges to devise financial products that would be of great use for the customers, thanks to Predictive technology.

Checking Reliability
The entire finance sector works on mutual trust and reliability. In traditional mode, the financial companies used to run a background check for the loan applicants through extensive paper-pen based documentation process. This outdated process used to take nearly four-five days after the customer submitted the application, and approval of which further took five-six days to process. In today’s age, all these processes are digitalized and automated, cutting the turnaround time considerably low. All these background and investigation procedures are handled online using analytics that use data and insights to measure the creditworthiness of the loan applicant.

Smart Financial Advice
The target groups of financial companies encompass corporate workers, investors, and entrepreneurs who need wealth management and investment advice now and then. Nowadays, financial service firms have taken these advisory services to a whole new level as they have now automated the delivery mode.

The development of robo-advisors is a breakthrough in financial technology as it does not require human intervention in sharing smart financial advice with the respective stakeholders and customers in a jiffy. The advantage is precision and accuracy of the advice as these robo-advisors learn from trust data and recent case studies to tailor the advice for each individual person. Not only this saves company’s time bringing in efficiency, but also deliver customers the best in class experience.

Facilitating Instant Transactions
Launched in 2016, Unified Payments Interface (UPI) resolves the biggest bottleneck in availing banking and financial services. It empowers people to instantaneously and securely transfer amount up to Rs.50,000 in a day, unlike cheques that take 24-48 hours for money transfer. Almost all FinTech lending companies and most of the banks are using UPIs for loan disbursal and money/fund transfers via mobile apps and web platforms, maintaining the security throughout. Indeed, India and the entire world is moving towards a cashless and fast-paced economy where availing loan & investment, and other financial services is no more an arduous feat.