How technology has become the backbone of the Indian BFSI industry
The BFSI sector in India is rapidly changing for the better. With the evolution of innovative, new-age technologies like Artificial Intelligence (AI), Machine Learning (ML), and more, digital banking is climbing new heights.
We are witnessing a revolution in the fintech world that has transformed the banking industry into a far more efficient and profitable business. Many people are inclining towards digital interactions and transactions with their banks.
The powerful digital software capable of facilitating smooth customer onboarding, digital lending, sales automation, and many other services has been of immense use for banks and financial service providers. Banks and Financial Institutions (FIs) can offer seamless banking services to their customers.
Embracing the advanced digital solutions for improving banking services can be rewarding for banks and FIs. Modernising banking infrastructure has become essential for banks to have an edge in the highly competitive BFSI industry.
Technological innovations like AI and ML can optimise banking operations like customer onboarding by preventing frauds, building suitable product recommendations, and more. A fully-equipped and developed digital lending software can offer myriad benefits to accelerate digital lending, allowing banks to disburse loans faster.
While many prominent technologies drive digital banking operations, a few technologies like AI and ML, Robotic Process Automation (RPA), and Cloud Technologies play a crucial role.
Here’s how they add value to digital banking operations .
Artificial Intelligence (AI) and Machine Learning (ML)
The brilliance of AI and ML has successfully helped banks and financial service providers to provide frictionless and innovative banking operations. AI-powered technology like optical character recognition (OCR) enables auto-filling user details from their document proofs in customer onboarding. AI and ML are excellent in preventing fraud and offering automated product recommendations to the users.
Services like digital lending widely use AI and ML to allow a more accurate and extensive credit risk profiling. AI based credit scoring uses tons of data points like income level, employment history, and credit history.
Whether it is about onboarding a new customer or granting a loan, all details and processes have to comply with regulatory bodies. AI and ML play a major role in compliance management.
Financial APIs (Application Programming Interfaces) are one of the most important technologies used in digital banking. APIs connect with the application and allow interactions, transactions, payments, and sharing of information.
APIs allow banks and financial entities to club in their frequently used microservices to accelerate their business. With easy integrations and data sharing, APIs can help banks save several weeks.
Financial APIs take care of operations like KYC, the credit assessment, retrieving information while filling out forms, e-sign, etc. Some specific open APIs allow third-party vendors to access consumer accounts, known as open banking. Open APIs can help the customers with additional provisions and services by letting third-party vendors access their accounts.
Digital banking has ramped up the customer onboarding rates, and with a growing number of customers also comes an increased amount of data. Cloud technologies are the most optimal way to store, organise, and retrieve data.
Powerful cloud-based technologies can be immensely beneficial for building essential statistics and deriving valuable insights to boost customer onboarding rates.
Cloud-based technologies allow banks and FIs to build smarter marketing and sales strategies, serve their customers better, and cross-sell relevant products to the right customers.
The emergence of banking technologies has changed the fintech industry. With the pandemic, and restrictions in place, multitudes of banks and FIs are modernising their infrastructure to support digital banking.
Banks need to be clever about upgrading their existing infrastructure by facilitating a seamless and frictionless customer experience. The perfect balance between compliance and user experience to hike your customer onboarding rates, is needed.
Banks and financial service providers have to embrace digital banking and imbibe the essence of all these cutting-edge technologies to outstand the competition. With flawless finance software, endless opportunities and upcoming technologies, the Indian BFSI sector is heading towards a bright future.
Edited by Megha Reddy
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)