The immense change that technological innovations bring and their impact on our daily lives is not often perceptible. However, the digital transformation of the banking and finance industry is both rapid and has become apparent in the current scenario.
The Fintech revolution was underway even before the outbreak of COVID-19. Still, the massive change that the pandemic has brought about in the way we work, bank, invest, and function has put digitisation in high gear. Industry thought leaders in India, such as Sanjiv Bajaj, Chairman & Managing Director, Bajaj Finserv, believe that 2022 only promises to add to the evolution of the country’s digital transformation.
Financial Inclusivity
Some of the top digital pioneers in India look forward to the furtherance of financial inclusivity in the banking and financial sector in the year 2022. Over the past few years, financial inclusivity has become the watchword, particularly in India, with banks and NBFCs taking the lead over informal credit sources and financial service providers. With Aadhaar becoming universal, access to savings, investment, and credit is set to grow. NBFCs using mobile platforms and easy-to-use mobile applications are best suited to capitalise on this trend.
Remote Banking and Investment
Off-branch remote banking and investment is no longer a trend; it is becoming the norm. All banking and financial processes are now going the digital route from online applications and onboarding to digital KYC credit screening to investment accounts. The availability of reliable internet connectivity and the widespread use of smartphones, handheld devices, and computers have played a significant role in this digitisation process, even in the country’s far reaches.
Digital Currencies
One of the most significant impacts of digitisation is digital wallets and even currencies. Most of us are now familiar with UPI payment systems and digital wallets. Small, medium, and large businesses are now adopting online payment methods as part of their digital transformation services. Apart from this, we shall soon be looking at the rise of digital currencies. In the budget speech 2022, the Indian Finance Minister announced the introduction of the digital rupee. This is likely to impact the banking and finance landscape in the times to come.
Hyper-enhanced Customer Experience
With digital banking and financial services becoming the new normal, NBFCs and banking institutions will now be starting to focus on the virtual experience of the end-user or customer. Speed, security, and ease of access are the new watchwords of 2022. The use of blockchain technology to clear multiple payments (including real-time cross-border payments), AI-enabled customer service technology, and personalised services and products will become the new face of banking and finance this year.
Fintech Collaborations
One of the key trends we are set to witness this year is the inclusion of fintech in the banking and finance industry. By this, we mean that fintech companies that worked as independent service providers and vendors to banks and NBFCs shall now become key collaborators. Several large NBFCs in India, such as Bajaj Finserv, have already enhanced their internal fintech capabilities. Finance leaders like Sanjiv Bajaj believe that digital capabilities will set the market leaders apart this year in the industry.
Legislation and Policies
With a change in the digital landscape of the banking and finance industry, we can also expect a systemic change in the regulatory framework. The budget speech of 2022 reflected the government’s focus on enhanced digitisation and monitoring of digital currencies. 2022 shall be the start of any such changes.
The addition of automation, big data, analytical insights shall transform the industry into one that operates on fintech innovations. A large part of the processes will operate in a virtually controlled environment.
The digital landscape of the banking and finance industry is quickly evolving. Its impact on the industry is likely to be significant, believe digital pioneers such as Sanjiv Bajaj. The introduction of fintech innovations and digital technologies shall set market leaders apart, and speed, security, and ease of operations shall define success for most banks and NBFCs.