How fintech is shaping the future of the banking industry?
The fintech industry is the fastest growing area dedicated to creating disruptive businesses. With rapidly growing technology and people getting busier day by day, Fintech will soon be the most sought after term across the globe. The term Fintech is originally a combination of two words Finance and Technology, which refers to an industry that uses technology to bring financial activities on digital platforms. It is used to deliver financial products and services to customers as well as companies in areas related to finance including insurance, banking and investments.
It has changed the world of finance for customers by making every single service so easy to use via the internet. For instance, you can now open your bank account over the internet anytime and anywhere without having to physically visit the bank branch. You can also use your smartphones as a digital wallet by making payments online via your smartphone using various digital wallet applications like Zenpay to pay your bills or receive money from a friend or family instantly.
According to current consumer behaviours, a vast majority of customers use fintech for managing their personal finances and financial products. It has become a crucial part of everyone’s daily life. Moreover, the majority of people use these services at least once or twice a day to pay bills or manage their finances. In addition to the daily usage, about 70 percent of customers use these applications at least a few times a week or in a day on a daily basis.
Currently, they are about 1.7 billion people worldwide who do not have a bank account and in a country like India where the majority of the population lives in rural areas and do not have access to a bank, fintech acts as a saviour for them as they offer them various financial services and products regardless of their net worth through cutting-edge technologies. Zenpay is one such organization that is focused on providing salary accounts to the blue-collared workforce.
The advantage of Fintech is that they offer consumers with a digital bank account and mobile application through which they can monitor their fund safely using net banking or debit cards. For example, Zenpay has recently collaborated with RBL bank to open digital salary accounts for blue-collared employees working for SMEs and MSMEs and these organizations can pay salaries via Zenpay corporate banking. This collaboration has helped brands build trust and create brand loyalty among the customers so that they can opt for a digital payment platform without having to worry about their finances.
Here’s a quick look at how Fintech has enriched some areas of finance:
Mobile Banking:
Mobile banking is a much bigger part of the fintech industry as the increased use of tablets and smartphones has led to an increase in demand for digital banking services such as net banking, digital wallet applications and digital bank accounts with a user-friendly interface. Users can also pay utility bills, check account balance, download bank statements and deposit cheques using the interactive dashboard. To ensure the safety and security of customer’s finances via mobile applications, financial institutions have come up with a fingerprint sensor, which allows the rightful owner of the account to access it.
Smart Chip Technology:
Most ATM cards have smart chip technologies that help in minimizing fraud in case the customer has misplaced the card. Credit and Debit cards are designed with EMV technology that is embedded in the chip of the card. This technology helps generate an OTP commonly known as a one-time password, which is sent to the user's registered mobile number to complete each transaction. This technology keeps the customer’s card secure in case it has been misplaced by them
Digital Wallets:
The growth of digital wallets has given rise to fintech services worldwide. Some of the popular digital wallet companies offering financial services to customers include Zenpay, Paytm, Apple Pay and PayPal. These wallets are generally used for a variety of services including paying utility bills, booking flight tickets and movie tickets, sending money to your closed ones, making credit card payment and paying insurance and loan payments.
Branchless Banking:
Fintech services have transformed the entire banking system with the introduction of digital channels such as social, online and mobile applications. It has made banking relatively easy and convenient for users without having to visit the bank. This has resulted in many banks adopting branchless banking. For instance, Zenpay is the fastest growing startup offering digital payment services targeted towards blue-collared employees. They serve customers remotely with services such as salary accounts and loans and payment services via their mobile application and website.
Chabot’s:
Fintech companies have introduced chatbot’s to provide customer service to their clients like a human providing customer quick support. They are highly efficient in handling customer queries and are quite efficient in directing customers to the concerned person or department as and when required.
Impact of Fintech in a post covid world:
The coronavirus pandemic has completely changed the way we used to lead our life and we can safely say that a post-pandemic world will be completely different from the one we were leading for years as this infectious virus has transformed our lifestyle.
In the post covid world, the Fintech industry is expected to play a very important role and for that to happen the industry has to adapt according to the new normal to stay put in the new world.
Build customer trust:
Due to the Covid-19 pandemic, the majority of the customers have shifted their focus completely to online banking which helps them to avoid venturing out unnecessarily. Although, the customers have made a shift to digital banking services they still need assurance from financial institutions that their money is safe and secure, especially when huge financial transactions are involved. Here, Fintech companies have to fill the gap by offering safe communication tools such as video conferencing to build customers' trust in them by offering them a similar experience so that they are comfortable in using online tools to make financial transactions. Fintech companies can also collaborate with reputed financial institutions to win people’s trust by giving them the confidence to invest in these platforms.
User-friendly mobile applications: Due to the pandemic, most people are on the verge of exploring various applications that get their work done easily whether it is to buy food, book a doctor’s appointment, pay utility bills and so on. Applications that are user friendly will work rather than applications, which are not. Therefore, Fintech companies need to make sure that the applications they are designing provide exceptional customer service and enhance user experience.
Enhancing security: In the current scenario, as we are making more digital transactions we are at a greater risk of losing sensitive information and data due to which customers will want their data to be safe and secure from fraud or any malware virus. Therefore, to improve the security of the financial transaction, Fintech companies will have to focus on educating customers about security features so that they do not risk their personal information online and manage customer’s data by increasing data security.
Communication: With the ongoing pandemic, most companies have reduced staff due to which Fintech companies need to adopt social media channels such as Twitter, Facebook, Chabot’s and FAQs to resolve customers' queries and grievances to build the trust of customers in them.
The emergence of cutting-edge technologies along with customer’s demand for a user-friendly experience has led the banking industry to adopt Fintech technology and this has completely changed the way we bank and manage our finances. Also, it has played an important role in the covid era by offering customers products and services which are easy to use and explore remotely without having to physically go to the bank to get your banking done.
