The landscape for banking and financial services in India is burgeoning. The growing wave of digitalisation is sweeping across the nation and is creating enough impetus for the unbanked sections of the population to make the leap and be part of this growing world. The banking, financial services, and insurance sector in India have been on a high growth path, clocking in a 27% growth rate in February, and is poised for further growth.
Furthermore, young millennials and Gen Z also represent the new wave of customers. With the rise of mobile internet and the BFSI sector going digital, several new-age users are opening up to this sector. The same is credited to the success of digital wallets, UPI transactions, and the “buy now, pay later” services. The fintech space alone is seeing a fast adoption rate of 87%, far exceeding the global average of 64%. Furthermore, the fintech sector alone is expected to grow multifold into a USD 150 billion industry by 2025.
Withstanding the growing demands, especially in these times of digitalisation in a post-pandemic world, the BFSI sector is looking at some major overhauls in terms of its technology, usability, and outreach. To the same end, here’s looking at the top three technologies that will define the future of India’s BFSI, revamping the sector for its next phase of growth.
Artificial Intelligence & Machine Learning
Artificial Intelligence (AI), which has already made its foray into the BFSI sector, will continue to play a bigger and better role. While we may have started with chatbots responding to customer queries, and helping them look for information, the advancements in AI and machine learning are set to penetrate the sector deeper.
As of today, AI and ML are being used by some of the leading banks and fintech players to check the eligibility of loan applicants – to help with quick disbursals or to flag any discrepancies to the human agents. AI-backed fintech platforms are also able to predict the trades, carry out routine checks, discern any unusual activity ahead of time and more. And not just that, the marketing team is also leveraging the powers of AI, by building the user profile and area of interest to share customised offers and plans with them, thereby enhancing new customer acquisition and retention.
The growing prominence of AI and ML in the BFSI sector signals the onset of a safe, intuitive and smart customer experience, custom-made for the new-age users of today
In fact, with the advent of AI-powered voice agents like SuperBot, different players in the BFSI sector are also able to automate inbound and outbound calls. Calls about grievances, queries or instant assistance, as well as outbound calls for fraud alerts and detection, instant KYC, providing information, placing payment reminder calls, collecting feedback, etc. can be done with the help of AI in a hassle-free manner. Altogether, the growing prominence of AI and ML in the BFSI sector signals the onset of a safe, intuitive and smart customer experience, custom-made for the new-age users of today.
Robotic Process Automation
The BFSI sector has significantly benefited from the advent of Robotic Process Automation (RPA). Several key players in the segment have been able to draw significant time and cost-based efficiencies after automating some of their key processes.
For better comprehension, let’s take an example of drip marketing activities. With RPA, every user who has their insurance due for renewal or upcoming bill payment, etc. gets automatic reminders, made possible with the help of automated rules.
AI-powered voice bots, can act as a drip marketing medium or generate awareness by placing automated calls in case of any fraudulent activities, which have been made possible with the help of RPA
Similarly, AI-powered voice bots, can act as a drip marketing medium or generate awareness by placing automated calls in case of any fraudulent activities, which have been made possible with the help of RPA. This not only makes the process a lot more smoother and efficient, but it also helps alleviate reliance on human agents for the same. Once the system is set in motion, it will continue to function without fail.
Blockchain/ Distributed Ledger Technology
Right adjacent to the glitzy and aspiring world of Bitcoin and other cryptocurrency and digital assets, lies a meticulous world created by blockchain technologies. In addition to cryptocurrency, blockchain technology has accounted for seamless UPI transactions and spend-tracking apps, amongst others.
One of the significant contributions of this technology to the BFSI sector is to bring about unprecedented speed and security in financial transactions. Take, for instance, making a payment using your bank account, it may take several days to complete. And besides, the transactional cost of sending a payment internationally might be too high.
Regardless of whether the transaction is local or cross-border, the slowest blockchains may complete a transaction in as little as 15 minutes, while the fastest can accomplish it in seconds. In essence, traditional technologies are slower and more expensive than bank blockchains for cross-border payments
When it comes to blockchain finance, both central and commercial banks throughout the world can use the new technology to process payments and maybe issue their own digital currencies. Blockchains are global ledgers that are not constrained by borders and do not require middlemen.
Regardless of whether the transaction is local or cross-border, the slowest blockchains may complete a transaction in as little as 15 minutes, while the fastest can accomplish it in seconds. In essence, traditional technologies are slower and more expensive than bank blockchains for cross-border payments.
The advent of these three technologies and the next phase of the evolution of the BFSI sector hints at inclusivity. As different players make their offerings smarter, quicker, and more intuitive, more and more users will be motivated to take the plunge. Key players in the domain must look at assigning a specific budget to growth and innovation, to maintain their competitive edge and continue to grow multifold.
Guest contributor Ankit Ruia is the Co-founder and Director of SuperBot (PinnacleWorks), an intelligent, AI-powered voice agent startup based out of Gurugram. Any opinions expressed in this article are strictly that of the author.