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Fintech, or financial technology, is causing quite a stir in the Indian financial services ecosystem due to its rapid development. Its revolution has piqued interest as technological advancements radically alter the financial services industry. As a result, financial technology is becoming increasingly effective in giving firms relative performance improvement.
Over the last few years, the Indian Fintech industry has experienced tremendous growth. Paytm, Pine Labs, PayU, and Faircent are only a few of the many Fintech startups that have sprung up in India recently. SoftBank has been investing in a number of promising fintech companies. According to a report, India has secured the second position in the world with the largest fintech startups following the United States in 2018 (over 1,300 Startups were added between 2010 to 2018 period). Consumers' attention has shifted to digital alternatives for financial transactions and services as a result of the government's initiative to promote financial system digitization and a cashless economy.
Here are the top 5 technology trends that are transforming the fintech sector.
Traditional banks are known for keeping people's money secure. More people tend to spend their money instead of keeping it in the bank as their financial literacy grows. Traditional banks are giving third-party financial institutions a run for their money when it comes to providing versatile high-income-generating investments and customers are taking advantage of it through open banking. Open banking allows third-party financial service providers to access consumer banking data through Application Programming Interfaces (APIs) for investment purposes that the consumers have approved.
The most critical development impacting the fintech industry is the use of blockchain technology. That's because blockchain is not a niche technology, but rather a form of decentralized technology that will eventually power the majority of the fintech industry and even beyond. The term "blockchain" is most widely associated with the digital currency bitcoin. Blockchain, on the other hand, can help any product or service that depends on contracts.
In essence, blockchain technology eliminates the middleman by encoding so-called "smart contracts" directly into the blockchain through a decentralized ledger, as though the contracts/transactions were trapped in hue. As a result, the blockchain can make many financial items, such as futures contracts and insurance plans, safer and more stable.
Banks can use cloud computing to remove repetitive activities and function more creatively. Other resources provide information storage, management, and access. Fintech firms that use stable cloud-based technologies can also assist banks in developing unique solutions for improving customer experiences, personalization, and automation.
Big data in fintech is more than just a fad. It will keep growing at an unprecedented rate in the coming years, owing to the increased adoption of mobile technology and the Internet of Things.
One of the key benefits of the cloud for financial institutions is the ability to store and monitor vast data sets that are used for transaction verification. As a result, they are nimble and fast. This expands their market scope to a variety of new and distant areas, regardless of their region.
Chatbots have already been implemented by a variety of industries, including fintech, and there is no doubt that this automated solution has aided people all over the world, particularly in terms of customer service and management.
Customers, on the other hand, continue to face a language barrier, which makes them unable to use different digital solutions. This is where a voice bot can help to localize end-to-end customer and business experiences.
Natural language processing, a branch of artificial intelligence that generates meaning and significance from spoken and written language, has made considerable progress over the last decade. Natural language processing (NLP) offers a once-in-a-lifetime chance to extract value from Word and PDF documents, emails, log files, social media messages, and the large quantities of unstructured data that make up much of the internet.
Natural language processing is also being used in banking chatbots, legal document scanning, and other applications in the financial sector. The best, though, is still yet to come.
