It will be safe to say that we entered a Volatile, Uncertain, Complex, and Ambiguous (VUCA) environment when the world was hit by the COVID-19 pandemic. The strict lockdown measures and prolonged uncertainty impacted economies, overloaded healthcare, disrupted business operations-forcing many of them to shut shops- and affected normal life, and India was no exception.
That said, there was also an upside to the entire situation as the pandemic demonstrated how digital adoption could be driven faster.
The COVID-19 situation enabled businesses, large and small, to leave behind traditional systems and adopt smarter, tech-enabled digital practices to cater to their customers and partners. They adopted new technologies for day-to-day operations, manufacturing, retailing and most importantly, digital payments.
Meanwhile, the fintech sector found an opportunity in the pandemic as the country moved towards digital payments. It bridged the gap by delivering various services to businesses and the common man, unfolding a promising future ahead.
Therefore, to discuss what lies ahead for the sector, a virtual panel discussion on the ‘Future of Fintech’ was hosted at the two-day Razorpay FTX 2020 event, where top experts Arundhati Bhattacharya, Chairman and CEO, Salesforce India; Ari Sarker, Co-President, Asia Pacific, Mastercard; Surojit Chatterjee, Chief Product Officer, Coinbase; Dilip Asbe, Managing Director and CEO, NPCI; spoke as Amitabh Tewary, Chief Innovation Officer, Razorpay, moderated the virtual event, highlighting interesting points for the fintech sector.
They deliberated on how new-age fintech companies are changing the game, and provided actionable insights into how they will succeed.
“The rate of change in technology is very high now. The fintech firms that are able to cope up with the rate of change in technology will succeed. The financial institutions are looking for exponential change. They are asking solutions which are kind of zero manual intervention, the AI-assisted models. The game is changing now and fintech firms that are very good with the new-age technology, i.e. the deep tech kind of fintech will have a better chance of success,” said Dilip Asbe.
As the discussion progressed, the experts also pointed out that fintech firms can plug the gaps that big companies may not be looking at. They added that fintech firms are agile and nimble and by partnering with banks, they can expand their base and establish trust factor too.
“The combined entity of banks and fintech firms works very well when Banks bring their huge customer base and the trust that customers have on them and fintech firms bring in the innovation in an agile manner,” said Bhattacharya, adding, “new-age fintech firms are an important part of the ecosystem and should be encouraged to solve many problems in an agile and affordable manner.
Certainly, the fintech sector is bound to grow, riding on customer expectations and smartphone penetration. It is catching up fast with global peers in terms of adoption.
“If you look at the India scenario and compare it with the rest of Asia, I think the Indian market for fintech and investment in technology per se, has moved far beyond in the last 5-7 years,” said Sarker.
He said that India needs to improve compliances as ASEAN is getting ready and Singapore wants to play a big role in this space.
Meanwhile, a poll was also conducted where 70% of the respondents affirmed that transactions in 2030 will happen digitally. This pinpoints the volume of payments expected to happen in the next decade.
“Whatever is the GDP of a country, you multiply it by 4-5 times… that is the volume of payment that the market will generate. If you believe that in 2030 India becomes an $8 trillion economy, the opportunity for payments should be 40 trillion flows. This is going to be a 20-30 year journey and you are going to see this change happen gradually, year-on-year.,” said Sarker.
So, where is the industry going to move to in the next decade?
“Digital currency is a big bet for fintech as a whole and digital currency just creates accessibility. It makes money and financial services universally accessible across the world. Payments can be fundamentally disrupted with help of digital currencies. With digital currencies, it (payments) can be done in a few milliseconds, the transaction fees for a business can be less than 1% and with real-time, low-cost cross-border transactions we could revolutionise cross-border commerce. I think many countries in the next 10 years will convert their currency into digital currency,” said Chatterjee.
As the panel discussion drew to a close, experts also spoke about trends and how data will be the king in catering to the customer.
“We are going to move into a world where there is going to be hyper-personalisation because of the sheer amount of data that can be gathered and processed in milliseconds so as to give a greater idea about the individual. The power of data will keep moving back from large corporates into private hands and the ability to exercise choice will become much more powerful,” said Bhattacharya.
They also emphasised on the role of artificial intelligence and cloud for fintech to achieve 10X growth.
This is a partnered post.