The fintech revolution

Since the telecom revolution mobile service providers and internet service providers (ISPs) have started replacing conventional financial transactions with digital transactions. Today, digital wallets, Block chain, Cryptocurrency, Big data, Machine learning, AI and other innovations in fintech are revolutionizing the finance industry. Unified Payment Interface, a system set up by the Government of India, channalises multiple bank accounts into a single mobile interface is a great attempt towards the ‘cashless India’.  Payment banks are an outcome of this Fintech revolution. It is expected that in the next 5 years, digital payments will overtake cash transactions and it would not be wrong to say that every person with a smartphone will be a walking- talking ATM. BFSI players will have to make their digital gameplan a ‘Big Game'. The process must be driven from the top with focused on the customer by adopting an innovative framework, fintech evaluation, clear accountabilities, decision-making and criteria for success. 

Fintech provide ease of anywhere - anytime transaction and at the back end, smoother operations and customer-friendly services. May it be in retail lending, credit assessment, insurance, asset management, or wealth management, fintech can help quickly scale business, provide service and helps effectively manage transactions & operations. While, Companies are seeking ways to benefit from Fintech across the organizations a majority of them remain focused on applications of fintech in payments only. They have to increasingly look at using FinTech across the entire value chain i.e. for demand generation to backend fintech like block chain, big data solutions, Robotic and artificial intelligence that will make operations effective and products far more innovative, efficient and reliable. Unlike eCommerce or other fast moving product companies, most financial services players have a weak innovation culture. BFSI by their very nature operate in an imperfect market, are cautious and risk averse to innovation and partnerships. Every opportunity they see is my nature fought with risk and apprehension. Hence their collaboration with the right Fintech partner is a challenge. FinTechs on their part, need to gain trust of a large retail customer base. It has to understand the current and evolving regulations, cyber risk, data security and complexities of partnering and working with large Companies to deliver integrated solutions. The common challenges is that both are competing for market share in the midst of a disruptive environment. Fintech has to build, fund and design an innovative product or process and Banks have to redevelop an operational engine that can outperform legacy operations through such smart idea and offer more value. The former brings innovation and the later brings good will, brand value & trust. Achieving such a ‘value-creating’ through collaboration is the heart of the matter for both players.

Bank's cost based brick and motor concept is nearing dead. With new technology, the composition of talent will change considerably. The stars of the future might well be internal entrepreneurs, in-house developers and designers. This has implications for talent acquisition strategies at all levels of the organization. New capabilities will be required and existing talent will have to be trained as automation will free up human beings to perform more insightful tasks.  Some of this can potentially be seen as threat to employees. Will Ai or robots eliminate my job? Will current experience and skillset be relevant in the new world? Needless to say, ‘learnability’ has and will remain the single most important competency.

Every company struggles to transform or implement a ‘Big game’ successfully. There is no single answer on how to engage in Fintech. The sooner we can answer the question - what we can do about our tomorrow? And start connecting the dots, the process will start. A BIG vision and regular communication will fosters integration of vision with people and support risk taking, learning and Collaboration. This change requires an engagement model that ASPIRES, EMPOWERS and lets one OWN the BIG idea! Suggestions from employees, hackathons will develop and foster this change. Alternatively, a dominating approach with a hierarchical mentality will also result in speedy transformation but could be at the cost of culture, so badly needed to retain good talent and take the organization to the next level.

Net net: We’re in the midst of major disruption in financial services. The entire BFSI space has to aggressively pursue fintech in various forms, from partnerships with fintech firms to talent acquisitions to strategic investments in them. In the next few years we may see a complete new digital landscape of financial services in India.