A journey through 5 waves of fintech evolution

The last ten years have changed and shifted towards a technology-dominant lifestyle, which has boosted national economies around the world. According to a report by Research and the Markets, the global digital transformation market is expected to grow from USD 469.8 billion in 2020 to USD 1,009.8 billion in 2025, at a compound annual growth rate (CAGR) of 16.5%, and it says clearly. that we will enter the sci-fi future we have only seen in movies or imagined in concepts.

The fintech industry has undergone rapid technological transformations to meet evolving business needs and changing consumer habits, with Covid-19 accelerating digital disruption. As a result, many new fintech companies have emerged, with 67% of India’s 2,100+ fintech companies founded in the last five years.

How 5 waves of technology have revolutionized the world of finance?

Over the past few decades, the world of finance has undergone a dramatic transformation as a result of technological advances. This transformation can be broken down into five distinct “waves” of technology. With each wave building on the one before it, financial technology (fintech) products and services have become more complex. These developments have made it easier to access the financial markets, faster transactions and more individualized consumer experiences. There have also been challenges, including concerns about data privacy and cyber security dangers. Despite these obstacles, the fintech sector is still evolving and there are new inventions underway that promise to further transform the financial sector.

The days of cash and physical money are fast passing, thanks to debit/credit cards and one-click transactions. As more businesses adopt fintech to offer specialized and efficient services to a wider customer base, India is moving towards becoming a “cashless and contactless economy.” Payment options such as mobile banking and payment apps are now available around the clock.

Some of the modern technologies used in day-to-day banking processes have also evolved. Consider data storage facilities. Floppy disks and CDs were popular methods in the early 2000s, and today, cloud storage with features such as file storage, previews, integrations with third-party apps, one-way sync, selective sync, and headless design have paved the way and become critical components of the BFSI sectors.

A closer look at the 5 waves of Fintech Evolution

The first wave of technological advances in the banking industry involved the replacement of manual processes with machines such as mainframes and computers. This enabled the banks to handle larger transaction volumes more efficiently. With the advent of the internet, the second wave of technological advancements brought online banking, which allowed customers to access their accounts from anywhere, anytime via the internet.

The third wave introduced mobile banking, making it even more convenient for customers to access their accounts and conduct transactions on the go. In the fourth wave, banks used new technology, such as AI, blockchain and IoT, to drive innovation and improve the customer banking experience. And finally today on the fifth wave we are talking about cloud computing, cloud marketplace.

Dive deep into Wave 5: How Creating Marketplaces is Changing Banking for the Better

BankTech wave 5 is the latest and most exciting stage of technological advancement in the banking industry. It heralds a new era of progress and innovation that is transforming the way banks operate and deliver value to their customers. It is about banking marketplaces, where banks use cloud computing to offer a wide range of financial products and services on a single platform. This enables the development of innovative and scalable solutions, which result in integrated ecosystems with increased convenience, transparency and choice for customers, while at the same time increasing the bank’s efficiency and profitability.

To create a successful marketplace for a bank in today’s digital age, it is critical to focus on the elements of wave 5, which include architecture, microservices, composability, embedded AI, hyper-personalization and ecosystem building.

First, a clean and clear architecture with separate elements for easy API connection is required. The architecture must be well defined and have no overlap, so that the bank can connect to each other through APIs and consume what they need. Second, microservices must be well defined with an interconnected API network. Third, a composability platform to have interoperability is necessary to create desired results. Fourth, embedding AI into operational processes enables hyper-automation and real-time decision making. Fifth, hyper-personalization using customer data and analytics improves the customer experience. And finally, building a strong ecosystem by collaborating with other players in the financial industry fosters collaboration and innovation. To succeed in the digital age, banks must embrace these elements of wave 5.

Overall, the benefits of marketplaces in banking are a natural result of the transformative power of wave 5, which allows banks to create innovative and customer-centric solutions that meet the needs of modern consumers.

Last mile

With the use of online banking, mobile banking, artificial intelligence and blockchain technology, technology has had a significant impact on the banking industry. This trend is expected to continue as banks invest in new technologies such as quantum computing, machine learning and digital payments to provide customers with more personalized, secure and convenient banking services. The industry will continue to evolve as banks embrace innovation.

END OF ARTICLE