Today, the mass penetration of mobile phones and internet in India has affected a rise in the adoption of emerging technologies. Finance companies are digitally transforming - adopting technology and shifting to a mobile-first setup to provide customer-oriented services. According to EY FinTech Adoption Index 2017, India had the second highest FinTech adoption rate in the world at 52%.
Customers can perform most of their banking, from opening an account to applying for a loan and carrying out money transfers to paying bills on their phones, in a matter of a few clicks. Peer-to-peer (P2P) lending services are directly connecting lenders with borrowers to provide individuals and businesses with faster and easier access to the capital. The market is flooded with e-wallets, money transfer applications, and payment applications that are laying the foundation for a cashless society. Even non-finance players like Google and Facebook are venturing into this market.
People are becoming financially literate and making educated decisions like online policy comparison on digital portals. Technologies like blockchain are helping people develop and use cryptocurrencies. The applications of technology in finance are limitless, and FinTech companies are grabbing every opportunity to impress customers.
Role of the cloud in FinTech
FinTech companies handle a massive and ever-growing amount of data for which they require a reliable and secure hosting service. Cloud offers storage and computing power to these companies and helps them provide online services to their customers. Cloud computing enhances interoperability that allows the Fintech companies to directly connect with their customers, and build a multi-channel relationship with them.
Integrating cloud solutions is cost-effective for FinTech businesses as they operate on a pay-as-you-go model and does not require a huge investment. Moreover, the solution is flexible, and the companies can scale up or down instantly as per customer demands.
Leveraging cloud to win over customers
We have touched upon how cloud is enabling the digital transformation journey of FinTech companies. Let us now try to understand how FinTech companies are leveraging cloud to win over customers.
1. Enhanced Customer Experience
Cloud offers a dynamic provisioning environment to businesses. FinTech companies can take advantage of this feature and roll out new solutions more quickly and proactively to continuously improve customer experiences by making the processes hassle-free, instant, and contactless. Unlike traditional setups, where it takes weeks or months to roll out new solutions, these can now be packaged for provisioning in the cloud environment for production or test deployment within a few hours. Cloud providers meeting regulatory compliances with appropriate certifications allow faster time-to-market for deployment of solutions.
Hosting applications on cloud helps FinTech companies provide customers with faster speed and unified service, thus ensuring better user experience. Cloud allows these companies to have a 24x7 uptime. It also provides customers with multiple channels to avail facilities.
2. 24x7 Customer Service:
FinTech businesses host Enterprise Resource Planning and Customer Relationship Management software on cloud. The software helps the companies provide users with better customer support by capturing data and making information accessible to them remotely.
Companies around the world have started using AI chatbots to manage the simple needs of the customers by answering the FAQs. This allows the workforce to find more time to focus on finding complex solutions.
3. Personalized/Customized Solutions:
Data from Accenture’s 2017 Global Distribution and Marketing Consumer Study revealed that 63% of respondents preferred personalized insurance and banking services. Insurance companies can gather customer data like age and medical history and use advanced analytics to calculate risks and personalize insurance plans for customers.
Financial advisors are using AI to understand the customer’s personality and get insights like risk pattern and decision-making approach. This information helps the advisors in personalized financial planning and wealth management.
4. Secure Finance:
FinTech companies work with sensitive financial data. They are required to meet the industry’s security and compliance regulations. Many of these regulations are related to data and infrastructure. Cloud managed services providers for FinTech have industry and region relevant certifications and compliance audit confirmations. The responsibility of maintaining the security and following the compliance shifts to the service provider, who is specialized and experienced to do the task. Cloud can help maintain better security with features like two-factor authentication and allow the customer to have peace of mind.
The FinTech industry is evolving continuously. Money is shifting from cash to mobile phones. New payment solutions like Unified Payment Interface (UPI) are increasingly finding acceptance. The country boasts of over 600 FinTech start-ups. By 2020, India’s FinTech software market alone could touch US$ 2.4 billion.
In the next five years, the number of internet users in India is expected to increase by 500 million. Demand for non-cash transactions may exceed cash transactions by 2023. The Indian customer is becoming more accepting towards digitalization and the demand for FinTech is expected to grow. Finance businesses and banks need to be a part of the FinTech revolution to be able to meet the continuously increasing customer demands and outperform their competitors. Cloud will continue to play a significant role at the backend in this move from traditional to digital.
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