When humanity thought we were making huge strides in all aspects of life, a plot twist was thrown at us starting late 2019. The Coronavirus pandemic brought life as we know it to a screeching halt, where none of us had dreamed of living under such circumstances. Right now, most of us feel stuck in the middle of a neverending horror movie due to socio-economic circumstances, especially with our income crimped and the business world crippled. With our best efforts, the economy will make a full recovery in three years, as per Gartner. In the meantime, we can only hope to try improving and adapting as we have in the last nine months. For instance, in India, our government acted on time to take the measures necessary to keep trade and business functional using the Atma Nirbhar Bharat scheme. Domestic businesses and entrepreneurs were being counted on to keep the cogs running.
Fintech: The Path to Digital Economy
In particular, the fintech industry has shown up in more than one way to support the cause of Atma Nirbhar Bharat under various domains by creating a better way to integrate the power of finance and technology. When the country went into lockdown in March, globalization all but failed us, but in the next six months, the fintech industry contributed to laying the foundation of new beginnings by changing the way we live. The trends for the fintech industry below show us the increasing importance of the sector in 2020.
Meta tag: Key fintech trends for 2020
Source: https://financesonline.com/fintech-trends/
The use of the latest technology, including artificial intelligence, has brought about a revolution in the economy by turning it digital with the help of fintech to a considerable extent, as mentioned below:
- COVID-19 Lending: Lending FinTech organizations in India have the opportunity to give out COVID-19 focused loans backed with flexible payback options to assist credit-worthy entrepreneurs and businesses in having access to easy loans to face their short-term liquid capital requirements. Whether it is on the business front or for individuals purchasing commodities, the fintech industry has provided convenient systems such as zero-interest EMIs or pay later schemes. For instance, this helped improve the work from the home situation for several employed personnel. A laptop is a growing necessity made available to people on 3-24 months extended EMI schemes with zero interest or shallow interest. To keep the economy afloat and to keep money entering the market, these measures worked extraordinarily well.
- COVID-19 Health Insurance: Since insurance plans, earlier this year did not consist of a cover for Coronavirus victims, many patients suffered a heavy loss of having to pay for extensive treatments out of their own pockets. However, the fintech industry resolved that by introducing insurance products that handled COVID-19 patients' treatment coverage. The country witnessed a massive influx in demand for such insurance by Indian companies, based on an organizational level or personal health insurance for the entire family, owing to the Atma Nirbhar Bharat scheme. FinTech companies have since leveraged their digital insurance delivery systems to deliver COVID-19 inclusive insurance plans and policies remotely. This includes making the experience of claims easier and less taxing on the patient's family, so they do not have to face the burden of such issues during a challenging phase.
- Invest-Tech: The COVID-19 pandemic and its impact on the stock market fluctuations have allowed discount brokers in acquiring new clients. Digital wealth management and consultancy are solutions that can help investors and independent financial advisers (IFAs) both. Wealth-tech has played a significant role in assisting them in traversing through the volatility of the market by providing advisory services and foresight into the immediate future by tracking trends and helping investors make better decisions with the help of IFAs. Market Data & Analytics self-help tools like StockEdge helped investors in identifying the right stock or mutual fund investment opportunities.
- Accessibility Tech: The increasing importance of remote operations with the prevalence of the COVID-19 pandemic is expected to provide an advantage to FinTech companies in the software as a service (SaaS) solutions niche. In the last six months, there has been an influx in demand for digital technology solutions like video know your customer (KYC) process, intelligent chatbots and digital operations such as online consultancy in financial organizations, i.e. banks and NBFCs. Today, the fintech industry under Atma Nirbhar Bharat program has enabled easier processes for people in even rural areas to have accessibility to complete necessary procedures and documentation with AI which will power 95% of interactions in the coming 5-10 years.
- Digital Wallets and Secured Payments: With the cash crunch that the public faced with a limit on their withdrawals, digital wallets has provided all the means to pay bills from mobile postpaid, recharging a cable connection, paying the utility bills to order groceries, making life easier for the citizens across India. With stores being shut for a massive chunk of the year or working at a limited capacity, acquiring groceries and necessities had been difficult due to the queues and risk factor of using cash for payments. Fintech innovations such as UPI and e-Wallets made it extremely convenient to complete payments without compromising data security or safety. In India, Digital payments valued at $65 billion in 2019 are expected to increase at a CAGR of 20% till 2023.
Atma Nirbhar Bharat Abhiyan aims to increase domestic industries' interdependence with the masses by providing accessible, affordable and high-quality services and creating opportunities; phase 3.0 of the program is said to work on integrating all sections of the society. As seen above, the fintech industry has given a lot in the last two phases, and without doubt has much more to give to the Indian economy in step three, by helping India emerge as a superpower.
