As with other industry verticals, fintech (Financial Technology) is making great strides. Modern technologies have revolutionized the finance sector by improving financial services. These technologies can also be used to help retail investors manage the stock markets, small businesses, and financial systems. It is custom software development that fulfills the greatest need.
WHAT ARE FINTECH’S BENEFITS?
Many businesses have experienced digital transformations due to the advent of advanced technologies, such as machine learning and blockchain, automated bank lending, consumer lending, and cashless payments. Many startups and businesses at the enterprise level have experienced the profound effects of fintech. This blog will highlight the potential benefits of fintech innovations for businesses that are well-prepared with the right fintech strategy.
Indian fintech payment institutions have no data advantages over banks
Although fintech platforms are dominating digital payments, this may not mean that they have an advantage in data over banks.
Moody’s Investors Service reports the introduction in 2017 of the Unified Payment Interface(UPI). Which allows funds instantly to be transferred and has been a key catalyst for the growth of digital payments. This was due to the ease with which apps can be used on the UPI.
Srikanth Vaidlamani, Moody’s Vice-President and Senior Credit Officer, stated that “but, their dominance might not lead to significant benefits over banks”Banks who play a key role in UPI payments have access to transactions through the network.” Because they are dominant in digital payments, banks may not have a significant advantage,” the report said.
Large banks, however, have dramatically improved their digital capabilities in key retail services.
Private sector banks as well as the industry leader State Bank of India (NS: SBI), have greatly improved their digital products in other areas. Their customers are adopting them widely. Banks resist competition from fintech that are not in the payment segment. “On the other hand, SBI and other public-sector banks have relatively weak digital offerings.
They will be negatively impacted by the heightened competitive intensity,” the report said. Fintechs will keep trying to expand into other financial products, such as personal loans.
Moody’s said that the market might expand “but, at the same time,” adding that technology will create more opportunities.
India’s Fintech Payment Companies have led the rapid growth and adoption of digital payments. It is possible that their dominance does not translate into competitive advantages for other financial services.
The report states that India’s banks have increased their digital offerings significantly and can withstand competition by fintech.