The world is rapidly changing and becoming more digitalized each and every day. Everything is online and nothing is pen and paper anymore.
So how is digitalization changing the financial services sector industry?
Banks and other financial institutions recommend financial planning and trading applications through smartphones and social media; cloud technologies are now commonly accepted, and in many cases, robotics are already dipping cost and escalating quality.
Against the traditional financial services
Since the fiscal year 2011, the number of start-up companies in the fintech industry has grown to more than 50 percent. Fintech industry comprises of those companies that are technology-based and compete against the traditional financial services.
More and more consumers are moving towards the digital currency, as in the case of Paytm, digital deposits and even investing. So this is making the entire industry change its way of doing things and rethinking the entire concept of what digitalization means.
The Indian banking industry, in particular, has been observing a slow but sure changeover from people-driven to machine controlled in the past few years. While this technological development has made the process of banking easier for customers, it has also involved the letting go of many employees at various levels.
Hasn’t affected many citizens
On the other hand, at the grassroots level, digitalization still hasn’t affected many citizens. Most of the rural community isn’t comfortable with online banking and in this case, the bank branches in these areas still haven’t been updated and digitalized.
Although less than half the Indian population do not have a bank account, 90 percent of them do own a mobile phone. So how does this contribute to digitalization?
These smartphones, thanks to many attractive offers, now offer unprecedented mobile internet access, whether you are connected to the WIFI in your house or have the fastest 4G. So it is due to this that every institution in the financial sector has consumer access. And to think, this wasn’t possible five years ago!
E-commerce with open arms
The youth population of India has embraced e-commerce with open arms, and the success has been apparent, as seen with Amazon.in, Flipkart and Snapdeal. Consumers are now adapting to the new age of mobile internet solutions for services which range from banking to commuting to shopping to music.
Almost every start-up provides and delivers exactly what the consumer needs, in terms of value, cost reduction as well as efficiency.
But of course, like any system, it does bring about a few challenged that are yet to be overcome.
Cumbersome task for most of the start-ups
Regulations, from both the RBI as well as government. Although there is encouragement, navigating the maze of rules as well as licenses is a cumbersome task for most of the start-ups.
Another major factor is rust. Most people trust banks and other well-known institutions. Start-ups, on the other hand, need to win the trust of their customers by being transparent and ensuring safe transaction experiences.
While these obstacles may seem inconsequential, they still have to be overcome, especially if you want to carve a niche for yourself in this industry.
