The word ‘fintech’ is an amalgam of the words finance and technology. The term ‘fintech’ was first used in the year 2011. Fintech companies exist with the intent to simplify various financial procedures. These companies have developed sophisticated technologies to compete against conventional ways of monetary transactions and offer multiple services like payments, lending, and quick investment.
Leveraging the services of a fintech company is remarkably simple. You just need to have a mobile phone or laptop/desktop with an internet connection. Millennials are tech-savvy- they want things happening at their fingertips, in a matter of a few seconds. This has forced banks and financial companies to update their age-old practices with the latest technology. Hence, banks have launched digital interfaces through which you get various banking services.
Initially, the public sector banks were reluctant to upgrade their traditional banking process. On the other hand, the private sector banks learnt what the modern world needed and came up with revolutionary changes in their banking practises, and thus attracted a large customer base. Online banking was first introduced in India in the year 1996.
It’s a known fact that public sector banks are poignant when it comes to following rules. The private sector banks are quite relaxed on rules as they have implemented the latest technology. Realising this, most public sector banks have now implemented the latest banking technologies to stay on par with the private sector banks. Such is the impact of fintech on the banking sector.
Apart from the banking sector, technology has revolutionised the following industries:
The modern insurers have understood the needs of the millennials and have adopted the necessary changes to suit their needs. Most insurers now offer an online procedure for submitting the application, filing claims and customer support. They have made the whole process seamless. Some insurers allow beneficiaries to initiate claims with a call and WhatsApp message. The documentation is very minimal and can be submitted online, effectively removing the need for a customer to visit the insurer’s office.
Gone are the days when people stood in the long bank and ATM queues to withdraw cash. Most hotels and shops now accept digital payments. Various mobile wallets offer payments services. Most banks now have their own payments mobile application. Payments apps provide services like a person to person cash transfer, prepaid mobile recharge, utility bill payments, and so on. The digitisation of money has enabled a cashless economy.
The advent of fintech has digitised lending. Making multiple trips to the lender’s office is a thing of yesteryears. Fintech has enabled an online procedure for loan application. Fintech has not only taken the lending business online but has also made the process simpler and much faster. Some lenders offer instant loans with minimum documentation. All you need to have is PAN and identity proof.
The investment firms are significantly benefitted with the coming of fintech companies. Previously, investors had to furnish various documents before they invested. Fintech companies have completely transformed the KYC documentation process. The KYC documentation has been made simple and hassle-free with the establishment of the Central KYC Registry (CKYC). Fintech companies have extirpated numerous investment formalities. You can effortlessly invest online in FDs, mutual funds and stock markets.
Fintech has taken the financial industry to the next level and has made financial procedures customer friendly. Fintech helps both consumers and businesses to run seamlessly. It saves time and efforts by offering innovative ideas for financial players to stay competitive in this highly contentious sector. Fintech companies have revolutionised the procedure of KYC documentation, making the lives of investors easy. The arrival of fintech companies has facilitated financial inclusion. The launch of UPI and BHIM has attracted millions of Indians to transact online.