How Fintech companies make banking more efficient

Financial technology has revolutionized the way people conduct financial transactions. The thought of banks conjures up visions of long lines, paperwork and delays. Gone are the days when banking was complicated, slow and limited to certain regions. Fintechs streamline banking, making it easier and more convenient for people to manage their finances. Fintechs have disrupted all streams of the financial sector from lending to capital markets to wealth management, fund transfers, insurance and payments.

At the forefront of modern trends is the government’s digital-first economy drive, fueled by a push for data-driven financial inclusion. Over the past two years, the migration to digitization has resulted in an unprecedented amount of data, surpassing all previous records in human history. This vast data pool has enormous potential for various applications, including providing credit to individuals and institutions with little credit history, as well as providing insurance and healthcare services to those in need. Furthermore, it serves as the foundation for the growing peer-to-peer lending industry, which is expected to grow at a compound annual growth rate of 48 percent year-on-year between 2016 and 2024.

India has all the necessary components to harness this digital dividend. The government has leveraged digital technologies such as big data, cloud computing and advanced analytics not only to improve tax administration and compliance, but also to counter fraud, corruption and the spread of black money.

Simplicity

Fintechs make banking easier for people by reducing the number of steps required to complete a transaction. For example, with mobile banking apps, people can now perform various transactions, such as paying bills, transferring money, taking a loan, etc., with just a few taps on their smartphone. These apps are designed with user experience in mind, making it easy for people to navigate and complete transactions.

Fintechs leverage technological innovations such as artificial intelligence and machine learning to automate banking operations. For example, chatbots are used to answer customer questions, reducing the need for human intervention. This not only simplifies the banking process, but also makes it faster. The backend infrastructure of fintech firms is robust enough for all processes, including loan application decision-making automated and not dependent on human intervention.

Tempo

With traditional banking, people may have to wait days for a transaction to complete. This is no longer the case with fintechs. With the use of instant payment systems, people can now transfer money in real time, with funds available almost instantly.

For example, platforms like PayPal allow people to send money to anyone with an email address or phone number within seconds. This not only saves time, but also eliminates the need for physical cash or checks, making transactions more secure.

Ease

Fintechs make banking easier for people by eliminating the need for physical visits to bank branches. With mobile banking apps and online banking platforms, people can access banking services from anywhere, anytime. This makes banking more convenient, especially for those who live in remote areas or have busy schedules.

Furthermore, fintechs make it easier for people to access financial services, especially for the unbanked or underbanked. With the use of mobile money platforms, people can now carry out various financial transactions, such as sending and receiving money, paying bills and accessing loans, without the need for a bank account.

Global nature

Fintechs are making banking more global, making it easier for people to shop across borders. With the use of blockchain technology, people can now send and receive money from anywhere in the world with minimal fees and without the need for intermediaries.

For example, platforms such as Ripple allow banks and financial institutions to transact directly with each other, reducing the need for correspondent banking relationships. This not only makes transactions faster and cheaper, but also increases financial inclusion by providing access to financial services for people who may not have traditional bank accounts.

In addition, fintechs make it easier for people to invest in global markets. With the use of robo-advisors and online investment platforms, people can now invest in a diversified portfolio of assets from anywhere in the world with just a few clicks.

By achieving simplicity, speed, ease of use and global reach, fintechs are changing banking, bringing financial services to more people and reducing the cost and time it takes to complete a transaction. As technology continues to evolve, we can expect fintechs to continue to innovate and transform the way we conduct financial transactions.

(The author is CEO at personal finance platform Branch International, India)

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