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Digital innovations in personal finance industry and ways to increase the strength of PF market

In India and the Asia-pacific region as well, consumer-based markets are embracing digital banking and fintech innovations like never before.  

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Amidst the widespread fervent utilization of modern fintech tools such as e-wallets, the extensive fintech permeation across the emerging Indo-pacific region is ensuing at a rampant pace.

From Sumerian merchants recording the sale of livestock and other transactions on clay tablets 5000 years ago to the rise of new-age digital technologies today, financial technology has come a long way. 

With the pandemic imposing market trepidations of the nether kind, people across the world have drifted towards digital banking and fintech adoption. It’s not just safe, convenient and contactless; the fintech model is also highly effective and efficient in terms of structure and outreach. 

In India and the Asia-pacific region as well, consumer-based markets are embracing digital banking and fintech innovations like never before.  

As per a proprietary Personal Financial Services Survey undertaken by Mckinsey, the consumer usage of digital banking modules has gained substantial momentum. The survey stated that almost nine out of 10 people across both emerging and developed Asian Pacific markets are active users of digital banking and are likely to procure further banking services in the future through a range of digital pathways. 

The share of consumers in Asia–Pacific emerging markets actively using digital banking shot up sharply from 54% to 88% in a span of four years between 2017 and 2021. Amidst the widespread fervent utilization of modern fintech tools such as e-wallets, the extensive fintech permeation across the emerging Indo-pacific region is ensuing at a rampant pace.

This ubiquitous shift towards digital banking has occurred in swift fashion and was further instrumented by various trends like the growing utilization of digital payment modes for a vast spectrum of transactions such as banking, and wider usage of teleconferencing/video calls in lieu of face-to-face meetings have gone on to become the norm during the COVID-19 pandemic. 

However, the Survey results opine that the surging levels of digital adoption are likely to intensify even when the effects of the pandemic recede in the future.

Let’s look at some of the major finance-related innovation trends that are set to go viral from 2022-to 2025:

The changing role of finance 

With the automation of financial processes, the financial machinery will strengthen its commitment to unleashing novel business insights, services and solutions.  The management of resources that are placed under financial control will rely on the sectoral capacity for value creation and addition. 

Needless to say, such a game-changing development will depend on deep and actionable insights and immaculate customer service. Cashing in on this assiduous trend, several financial organizations are likely to blossom into comprehensive business service centres.

New-age financial cycles

With finance embracing a concurrent path, periodic reporting of financial cycles will become outmoded and out of place. Conventional financial cycles become less pertinent when both actuals and forecasts can be generated on the basis of real-time demand. The age-old differentiation between operational and analytical data will be obliterated. However, financial organizations will still have to address extrinsic demands for cyclical information, although external investors may desire more recurrent data related to overall performance. 

It is said that the big-league players will function with a novel mantra: Forget the closing concept. It must be remembered that companies in the future will not be subjected to monthly or quarterly forecasting as it will all take place in real-time. When information can be accessed in an instantaneous manner, conventional periodic cycles will disappear leaving the necessary time, energy and resources for people to focus on exploring novel actionable insights.

Self-service is the best service

There are a number of seasoned business professionals who are quite adept and independent when it comes to the basic financial tenets. However, if they could get their queries resolved by a digital bot on their smartphones, they would willingly oblige. A bulk of Activities spanning from budgetary queries to report generation, etc. will probably be automated over time. 

A new league of smart agents will expediently decipher the various types of business information with the basis of personalized requirements and will aim to provide that data in a timely and proactive manner. As we gradually tread into this not-so-distant future unfolds, excel spreadsheets will be substituted by graphically rich information that is automatically accessible and user-friendly.

A new tech frontier

Amidst the rise of newer working models, the amalgamation of robotics and advanced algorithms with a diversified fintech workforce will unlock unseen frontiers. Companies will continue to evaluate the merits of automation against onshore and offshore functions. While Automation offers a new lever cost -management, financial organizations will have the chance to monitor and improve their existing organizational structure. The introduction of Finance-as-a-service is slated to command enormous traction that will transcend mid-market organisations.

Conclusion

The Future of the financial industry lies in the hands of automation and innovation. With the pandemic dictating contemporary terms of financial engagement, the need to embrace overarching digitation and tech-optimisation across every financial spectrum- whether banking, insurance, or payment transactions, will become absolute imperatives for functioning in the brave new world. 

by, Rohit Garg, CEO and Co-founder, SmartCoin

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