The grand digitization of the finance industry: How technology is paving the path towards the future
Digitization has helped the common man achieve financial independence by obtaining affordable access to finance.
The increase of digital players in the financial space in the last few years has eased the common man’s struggle to get access to funds. Fintech has emerged as the most effective lending channel, transforming the traditional way of banking and the end-to-end customer journey. It has unlocked various opportunities for tapping the wide substantial database of customers enabling a strong digital foundation.
Fintech platforms role in the growth of India’s Economy
India is one of the fastest-growing economies, where FinTech platforms are expected to scale up to a greater proposition. Digital lending has the potential to catapult the Indian MSME’s productivity, offering a meaningful market opportunity for both innovative start-ups as well as traditional lenders. MSME’s form the backbone of the Indian economy contributing to India’s employment and its GDP (gross domestic product). According to the study titled, “Credit Disrupted: Digital MSME Lending in India.
The entry of new-age lending platforms has catered to the larger segment of people who are in need of funds. Digitization has helped the common man achieve financial independence by obtaining affordable access to finance. Fintech platforms allow easy and transparent access to individuals, in achieving financial needs to cater their requirements, simply by sitting at the comfort of their homes or offices. The need to visit branches and standing in long queues has been eliminated.
FinTech Platforms enable consumers to shop for, compare financial products and services offered by various Banks and NBFC’s, at the tap of a button. Under one umbrella, consumers are able to get the answer to their query, which has gained momentum in recent years in Tier 1 and Tier 2 cities. Very soon it is expected to reach Tier 3 and Tier 4 cities also. Simply Googling it will fetch a list of financial loan apps, offering short term loans to individuals, in urgent need of funds.
Reversing of Financial Taboos
India is changing, and so is the mindset, practices, habits, and norms of the people. Once considered a taboo, availing short term loans has today become the need of the hour, due to ever-increasing demand. Millennials do not hesitate to avail loans and get access to funds to fuel their ambitions. They are confident of repayment of the debt amount and hence do not wish to keep their dreams inside closets anymore.
Multiple instant loan apps in India offer loans to ambitious Indians, in a fast, paperless and hassle-free way. These loan apps have gained wide popularity owing to the several benefits they offer- simple application process, low-interest rates customized according to needs, flexible repayment tenures, etc.
Value of Fintech Platforms in shaping the future of Capital Markets
A new credit alternative eco-system (Fintech Platforms) has been significant in helping India growing wealth through automation, data science, and artificial intelligence. These loan apps and aggregator sites assist users in making informed decisions while investing their money and keep themselves updated with the product updates and industry trends. Streamlining finance was never so easy, hereby reducing the money management burden for consumers. These platforms offer end to end guidance and solution to users in resolving financial queries, gaining financial literacy, etc. The young generation's reliance on these portals has provided the necessary leverage required to boost the industry, whose value is currently mapped at $73 billion, (according to KPMG Report) and its predicted compound annual growth rate (CAGR) is around 22% of the Indian FinTech Market.
New India’s changing financial scenario
With the infusion of technology in the financial sector, delivering products and services to users has completely turned the way financial lenders used to function a decade ago. Due to stiff competition in the market, gaining access to information is easy and transparent, instilling confidence in the users in making an informed and wise financial decision. New India is working towards resolving the higher percentage of loan rejection rate.due to a larger percentage of adults remaining unbanked. Connecting those populations to the digitization of the financial world is a long road ahead, but with ever-increasing awareness and demand, it is not a distant dream anymore. The wave of digitization is sure to drive demand and consumption in a more organized and undisrupted way, thereby boosting the loan portfolio.