Fintech Innovation Changes Personal Finance Dynamics in India
With the rise of technology, fintech now offers enriching customer experience and efficient financial transactions
Fintech is defined as a confluence of financial services and new technologies in order to improve financial offerings and services. According to the data of 2019, fintech adoption in India grew to 87 per cent in India as compared to 52 per cent in 2017, as per EY Global FinTech Adoption Index 2019. Since the turn of the century, the meet of finance and technology has played a major role in our daily lives. From paying credit card bills to lending to advisory to investing, no financial sector is cut off from the influence of technology. The pandemic year has expedited the adoption of fintech, and it has now, in fact, become a trend. This trend has made a smooth process for consumers and service providers. With the birth of digitisation, personal financial solutions are now being offered on smartphones. This helps the user to make informed financial decisions.
A wide array of fintech offerings is reforming the ways of managing personal finance. This includes investing, insurance, banking, payments, loans, and the like.
Let’s look at the some of the factors affecting the ways of managing personal finance:
Wealth management: With the advent of fintech, the wealth management sector has led to the development of digital wealth management services. Robo-advisory has played a revolutionary role for wealth management as it provides advisory with the use of algorithms. It also makes the process of investing in various asset classes a smooth one. Additionally, it provides a tailored experience and services for people as per their individual needs.
Insurance: Technological developments and changing consumer behaviour has brought a massive change in the insurance sector. Insurtech is a category of fintech through which browsing for insurance policies online and lodging an insurance claim are heading down the path of great convenience. AI, block chain management and data analytics used for risk management, claims management, claim settlement, KYCs, and background checks have revolutionised the insurance business.
Payments: Thanks to fintech that have the speed and agility in addressing needs of the consumers as well as come up with new solutions for existing challenges in the payment space, we are now well beyond the need of barter. However, with the advancement of technology, it is now time to move to a cash-and-card-free future. Digitisation in the payment sector has moved the world to contactless spending. Highly secured payment mechanisms are becoming part of managing personal finance. Associating UPIs, mobile wallets, barcode scanners with point-of-sale technologies have made payments comfortable.
Lending in marketplace: Also known as peer-to-peer lending; the way an Airbnb is not one’s own home but offered for rental by providing a common platform for owners who are willing to rent and tourists who are looking for homes, marketplace lending works in a similar way – by providing a platform to bring together investors who are willing to lend and people who need a loan. For people who want to take loans, their creditworthiness is measured by the means of data analytics through data collection. This helps to make informed decisions, and further reduces time and effort. Technological advantages amplify this experience for applicants as well as lenders.
Gone are the days of managing personal finance without the advent of technology. With the rise of the technological aspect, fintech offers many new alternatives to individuals and corporates by providing enriching customer experience, smoothened processes and a layer of quickened and efficient financial transactions across various platforms.
The author is Co-founder, Tarrakki
DISCLAIMER: Views expressed are the author's own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.