The term “FinTech” describes the application of technology to enhance the delivery of financial services. FinTech innovations are also a result of how mobile phones have altered consumer behavior and internet access. China (69 percent) and India (49 percent) are the two countries with the most FinTech adoption (52 percent). China, India, and other developing nations are more open to innovative ideas because they didn’t have the chance to develop western-style physical banking infrastructure. Many investors are enthused about the FinTechs of today since they are involved with cryptocurrencies and startup banks. FinTech businesses received $137.5 billion in investments in 2019, providing investors with a wide range of opportunities.
The high-tech capabilities of FinTechs are improving the quality of payment services. FinTechs have an enormous market base thanks to the transparency they offer. FinTechs don’t just provide affordable solutions; they also focus on making them simple, transparent, and integrated. To implement their simple payments through online banking, payment apps, or wallets, banks and FinTechs connect their major consumer bases. Flexible, quick, and affordable transactions made possible by cutting-edge technology are some of FinTech’s benefits. FinTechs can draw clients with lower prices because of their virtual operations, flexibility, lack of regulation as a deposit institution, and funding from venture capital.
In addition to enhancing the user experience, FinTechs have helped banks implement their buy-now-pay-later (BNPL) plan, which gives customers easy purchasing options. Covid-19 halted global economies, making it twice more challenging for individuals to meet their fundamental needs. The introduction of the BNPL option has allowed people to overcome their financial challenges. Contrary to the lengthy loan application process, customers without credit cards can utilize BNPL in just a few seconds. Automobiles, appliances, travel, and other such items are among the many commodities for which the BNPL option is available, making them relatively affordable to consumers.
Building client trust, being honest, and establishing a sizable customer base are a few of the ways banks are reaping from FinTechs. More than 90 startups in India and the UK have worked with banks like RBL, which has helped it gain 30 percent of its total 2.8 million customers. Another example of a FinTech partnership is Yes Bank, which has acquired 20 percent of its client base.
Functions like chatting, purchasing, gaming, news, and transactions will be integrated into a single app. The omnichannel software will act as a one-stop shop for all of the consumer’s digital requirements. The research of user behavior and trends is also aided by this distinctive strategy, which has its roots in China. As a result, banks can comprehend customer needs and offer financial solutions to their clients. The Super Apps are India’s next big thing, and they’re about to disrupt the banking sector with their quick-to-market solutions that smartphone-centric consumers will soon adopt.