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Startups, Banking and Financial Service Institutions (BFSI), and technology with the rise of Fintech-based entrepreneurial firms
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The world is experiencing a change with the onslaught of Covid19 pandemic, resulting into sectoral reforms, with sustainability as a concern at the centre of business. The existing CEOs and the ones in making are filled with exuberance for creating newer untapped opportunities in their respective domain. The Banking Financial Services Industry (BFSI) domain have started incorporating technologies into their systems, for improvising the customer behaviour, bringing a revolution. Post demonetisation in Yr2016 and COVID-19 pandemic, digital revolution has emerged as the backbone of a new economic order. The predictions for the future and fast changing turbulent global economy is thus witnessing the FinTech revolution in the BFSI domain.
These FinTech based start-ups is a new age community of entrepreneurs attempting to build forward the financial sector through technological revolution and opportunity, creating booming FinTech start-ups in the country across sectors like Payments and wallets, General Insurance, Payment gateway, Merchant Payment solutions, General Payments, Credit Card Payments & Rewards, Brokerage & Mutual Funds, B2B Payments, Enterprise Software - Neo Banking, Cryptocurrency Exchange and Brokerage & Mutual Funds.
The digital transformation in India across FinTech has created an opportunity for investments into Indian FinTech ecosystem. Out of 2500 Fintech start-ups, 250 entrepreneurial firms have raised USD 10.3 billion in equity funding across 120 deals in Yr2020 and USD 12.98 billion in equity funding across 278 deals in Yr2021. These innovative FinTech start-ups have registered a 17.5 per cent Annual Average Growth Rate (AAGR). Are you a part of this opportunity?
If you are not aware, then wake up! The Indian environment has a 87 per centadoption rate towards the FinTech industry as compared to other nations. The FinTech market in India is valued at USD 31 billion in Yr2021 and is expected to reach USD 83.64 billion by 2022. One should watch out and be a part of this digital wave.
AI-based Technological revolution
The Artificial intelligence-based technologies are harnessed by start-ups offering online application-oriented products, aligning the BFSI domains. The FinTech start-ups engage with modern, innovative technologies deploying industry 4.0 disruptive innovation in the BFSI. These technologies are Artificial intelligence (AI), Data Science (DS), Machine learning algorithms (MLA), Natural Language Processing (NLPs), Cognitive Computing (CCs), Blockchain, Cryptocurrency are some of the top technologies that are leveraged by FinTech firms towards product development.
The AI combines very high order-based technologies like MLA, NLP, CC and digital currency, thereby, becoming the fundamental tool for FinTech based start-ups. They have added impetus to entrepreneurship and innovation in the sunrise sector. Moreover, it has allowed the entrepreneur to leverage technologies that are majorly involved in the digital transformation of traditional banking towards automation of processes through AI. The other technologies that facilitate AI implementation are Data science, Big Data and Data Analytics, Robotic Process Automation (RPA) and Blockchain. The AI implementation, an extension of technological revolution particularly in the BFSI domain is categorised as Low, Medium, High and Very High. This is a new order revolution by FinTech based start-ups. Catch on these fast!
Low AI
1.Know your customer (KYC) verification
2.Anti-Money Laundering (AML)
3.Account Opening
Medium AI
1.Wealth Management
2.Digital Payments
3.RegTech
4.InsureTech
5.Asset lending
6.Credit Rating
7.Leasing
8.Hire Purchase
High AI
1.Account Management
2.Risk Management
3.Digi lockers
4.Merchant Banking
5.Mobile Banking
6.Factoring
Very High AI
1.Portfolio Management Services (PMS)
2.Stock trading analytics
3.Fraud Analytics and many more
The Debate
The lean FinTech start-ups are the innovator's assemblage of a new order revolution. The financial industry is at the core of the industry 4.0 revolution, growing at an exponential rate, is the star attractor on entrepreneurial opportunities in this digital age. After the innovation of Blockchain technology, ascending to Bitcoin, it has encouraged incubation centres associated with Bank lobbies, financial institutions, regulatory bodies and FinTech start-ups. These FinTech based start-ups are engaged in innovation, conceptualising innovative solutions, connecting financial services with Automated systems. They are offering in the areas where less human intervention is plausible with critical data analysis like in wealth management, customised insurance, credit ratings, peer to peer lending, payment gateways, crowdfunding and stock trading analytics. Applications are inclusive but changing with AI implementation in BFSI which is gaining importance and the technologies like Deep learning, machine learning, video analytics, NLP, neural network, computer vision and intelligent analytics comes with capabilities to understand customer behaviour and thus leading to impact BFSI domains with an intelligent tool that reduces the need for human interaction, intervention and increases effectiveness through new insights and ways of working in divergence with the traditional computing models.
Business Model Innovations
FinTech is also creating opportunities for investments from big companies in the BFSI domain to syndicate with FinTech start-ups towards mutual growth. Moreover, Technological revolution has created its base, with AI contributing heavily in most industrial practices, specifically in the banking sector. Thus, New-age entrepreneurial practices in the FinTech domain works on innovative models to create value propositions for improvising services. These FinTech entrepreneurs are collaborating with established companies towards revenue sharing business models for technological products, processes and services of Banks, Insurance, Mutual Funds and several more. Keep your eyes open.
Several of the FinTech companies participating in this technological revolution are Paytm, Bill Desk, Pine Labs, Incred, Mobikwik, Razorpay, Lendingkart, Coverfox, BankBazaar, Paisa Bazaar, PolicyBazaar, Capital Float, OfBusiness, Pay sense, MS Wipe, Sqrrl FinTech, KredX, Faircent, Zerodha etc. If you are intending to be a part of the technological revolution in the FinTech based start-up industry and caress the available technologies? The opportunities are in the deluge and the FinTech revolution has already begun. Be clear, we all are going to be a part of this innovation vortex in a closely knitted digital world.