The Indian banking sector has successfully embraced IT-enabled strategies in its operations over the past few years. By providing high-quality services and products, banks have effectively retained their primary customer base, offering customers convenient and efficient banking experiences through the integration of information technology. The impact of the Covid-19 pandemic has accelerated the shift towards digital banking in India, heightening consumer expectations for immediate and personalized services. This shift eliminates the necessity for physical visits to bank branches, empowering customers to effortlessly access and manage their financial accounts through websites, mobile apps, and various other digital channels. As customers embrace the convenience of digital banking, financial institutions are faced with the challenge of striking the right balance between offering digital-first experiences and maintaining a personalized touch. In this dynamic environment, finding equilibrium is crucial for banks to stay competitive and relevant to the diverse needs of their clientele.
Customers still value human interaction, especially when dealing with complex financial matters or seeking advice. These interactions build a sense of trust and loyalty that goes beyond transactions. Human touch becomes particularly vital during significant life events like buying a home, planning for retirement, or navigating financial challenges. To navigate this evolving landscape, banks, NBFCs and financial institutions are harnessing technology to deliver personalized digital experiences. Artificial intelligence (AI) and machine learning algorithms analyse customer behaviour and preferences to provide tailored financial services. Chatbots and virtual assistants offer real-time assistance, creating a bridge between the digital and personal realms. Recognizing the transformative power of collaboration, these entities have begun partnering with fintech companies.
CEO
Pepper Advantage India
The fiscal years 2022-2023 in India witnessed a surge in dynamic trends and opportunities in the financial technology sector, showcasing a positive trajectory for the entire industry. With over 2100 FinTech companies and around 4200 active FinTech startups, India now stands as the third largest fintech ecosystem globally. Fintech companies have secured a substantial share in payment gateways, small ticket size personal loans, card issuing, wealth distribution segment and the Buy Now, Pay Later market. Bank-fintech collaborations have transformed, emphasizing a shift towards collaboration rather than competition. Banks handle regulatory frameworks, KYC standards, transaction monitoring, and capital requirements, while fintech companies bring flexibility, a profound understanding of customer behavior, and advanced capabilities to the partnership. Collaboratively, they strive to minimize obstacles in customer journeys, particularly for MSMEs. Looking forward, the projections for India’s FinTech market are ambitious, with expectations of generating $200 billion in revenue by 2030 and reaching an impressive $1 trillion in Assets Under Management.
Anticipating 2024, the fintech arena is set to undergo dynamic shifts, driven by technological breakthroughs, regulatory progress, and changing consumer demands. These trends forecast a future where finance is increasingly reachable and customized. The emergence of fintech is seen as pivotal in helping India’s 6 million small and medium scale businesses in building resilient and digital-first enterprises. This evolution underscores the delicate balance between embracing digital-first experiences and maintaining a personalized touch in the banking sector.
