India Is At The Vanguard Of The Fintech Revolution; Preparing The Ground For Future Economic Advancement (BY-Arun Arangil)
FinTech's opportunity is to grow the
market, shape client behavior, and influence long-term changes in the financial
system. Indian Fintech firms have the potential to address a number of the
fundamental structural issues plaguing Indian financial services - expanding
outreach, improving client experience, reducing operational friction, and
promoting digital channel adoption and usage. As conventional banks and
financial service providers play catch-up with these more agile and inventive
start-ups, their legacy-prone processes and higher operating costs will give
digital FinTech start-ups an advantage.
In three ways, Indian FinTech firms
can transform the financial services landscape:
§ FinTech businesses are anticipated to
lower financial service costs and increase service quality. Without the burden
of outdated operations, information technology systems, and costly physical
networks, the advantages of leaner operating models may be passed on to
customers.
§ The FinTech industry will create
novel and inventive risk assessment models. By leveraging big data, machine
learning, and alternative data to underwrite credit and produce credit ratings
for customers with limited credit histories, India's financial services
penetration will increase.[1]
§ FinTech will reshape the financial
services sector, making it more varied, secure, and stable. FinTech firms are
less homogeneous than traditional banks and provide excellent learning
opportunities to enhance capabilities and culture.
Similarly, incumbents can learn a
great deal from rising FinTech start-ups. Fintech companies can also benefit
from and embrace best practices in risk management and internal controls,
operational excellence, compliance culture, and employee engagement, which have
proven successful for most of India's banks and financial services providers.