Akshaya Gaur, Founder, Aayan

FinTech and its Challenges

Today, FinTech companies are re-defining financial services to make them customer-focused, efficient and effective. While this is bringing a lot of excitement in the technology world, the Banking industry is buzzing with talk of disruption and disintermediation globally.  FinTech companies are being seen as the ‘competition’ to be battled with, while the more forward-thinking organisations are seeing the emergence of FinTech as an opportunity for Banking-FinTech collaboration.

FinTech – the Indian Landscape

FinTech is fairly nascent in the Indian context but is set for hyper-growth; significant investments are being made with or without government support in a range of financial services verticals – P2P Lending, Digital Payments, Retail Finance, Banking Infrastructure, Equity Funding, Business Lending, Invoice Factoring and Remittances. A recent study by NASSCOM summarized the opportunities for FinTech in the Indian market-place as shown in the infographic below.

What do we do?

The CXO Suite is concerned, technology functions are charged with staving off the FinTech challenge with legacy infrastructure and systems and teams that are used to working in traditional IT environments. Customer expectations are being driven by FinTech solutions and the growth of mobile platforms. On the other hand, “keeping the lights on” operations exhaust as much as 75 percent to 80 percent of budgets and resources. This leaves bank executives with just 20 percent to 25 percent of an IT budget available for change-the-bank innovations.

Dawn of the Analytics Age

We are now witnessing the dawn of the Analytics Age driven by the need to understand our customers and their needs. The focus on Customer-Centricity and personalized solutions is driving the need for insights into our customers that are instantly actionable. This era also is seeing consumer-protection focused regulation covering almost every aspect of the financial industry.

Customer-centricity Calls the Shots

Today’s customers demand more choice, collaboration and mobility, and they’ll settle for nothing less. There is a growing population of Gen Y that is demanding, entitled and used to instant gratification. Delivering personalized customer experience becomes key.

Collaboration – Not Competition

There is a need to understand where FinTech can add value to the banks and insurance companies and to work together to deliver results. The focus is on adopting more efficient process and practice and not technology per se. Even in the infrastructure space, there needs to be a re-examination of traditional platforms to replace them by technologies that enable the user-experience.

Actionable Insights Rule

The need to create customer insights and relevant marketing messages and experiences is dependent on data. All interactions with the customer – the brand, advertising, marketing, channels and the user experience – will be driven by data.

Finding an Accountable Partner

Finding an accountable partner is critical in order to deliver the shifts in management thinking and driving the improvement in performance – an unintended consequence of the growth of FinTech.

The advisor needs to be neither just a Technologist nor just a Banker – the need of the hour is a new breed – a Customer-Advocacy focused, Innovative, Insightful, FinTechnologist!