Financial technology is the latest innovation and technology that seeks to succeed where conventional financial instruments, such as investments, have failed. It’s an ever-emerging industry which makes use of cutting-edge technology to enhance financial activities in finance. This rapidly growing industry includes finance consultants, venture capitalists and software developers who are all contributing to its growth. The most outstanding feature of this industry is that it brings together these experts under one roof, which simplifies and streamlines decision making. Financial technology also provides a solid base for the financial sector which includes improved data management and risk metrics which are expected to usher in a new era in banking and financing.
Fintech is directly aimed at improving the overall quality of service provided by financial institutions. It aims to provide customers with more convenient and personalized financial services by eliminating many middlemen involved in financial transactions. Some traditional banking functions are being performed by a number of middlemen including financial advisors, investment bankers and traders, bank tellers and customer representatives who add to the work load of customers and reducing their satisfaction levels. Consumers are increasingly gravitating towards online alternatives which can reduce the overall costs of doing business and increase their convenience.
In India, government intervention is playing a crucial role in ensuring that fintech takes over from traditional banks. Several regulations and rules have been put in place to protect consumers. Government rules state that financial services companies cannot charge fees in advance. Further, these companies can only be run for profit and can’t indulge in any type of advertising. They also need to maintain a clear line of communication with their clients to ensure that they give information on all available options to them. In addition, customers can get more information on various products and options and have the freedom to ask questions.
Most of the large financial institutions have already started operating online with a number of third party companies handling the consumer interface. Online, customers can directly interact with the company and make enquiries about various products and services. Financial advisers and bankers can perform all traditional banking functions; however, the interface has made it possible for consumers to directly access company information and conduct monetary transactions. In fact, many people prefer online banking due to its ease and convenience. Online transaction is more secure as compared to phone transactions as there is no need for faxing papers and documents.
However, some traditional banks have also begun accepting the latest technology. A majority of the large banks in India, for example, have planned to incorporate mobile banking options in the near future. Mobile banking will allow customers to pay bills and check their bank balance on the go. It is believed that the fintech market in India will witness huge growth in the coming years. The main factors responsible for this growth include competitive pricing, increased accessibility and better service delivery.
As the demand for Fintech products and services increases, it is expected that the competition between fintech companies will increase dramatically. This has resulted in a number of mergers and acquisitions in the past few years. Merging is not only good for the expansion of an organization but also helps the smaller players to enter into a saturated market. There is a lot of potential and scope for expanding the business further and becoming a large player in the Indian financial services sector. Investing in Fintech companies is a sound business decision which can help organizations to penetrate new markets and bring unique and innovative financial solutions to the consumers.