A look at the transformation of the BFSI sector

Riding on the wave of disruptive innovations, the BFSI sector has evolved into an integral, customer-centric, and service-oriented sector. Technology has played an indispensable role in the transformation of the financial sector. Though the fintech evolution progressed at a meteoric pace for over a decade, yet the adoption rate barely shifted beyond the primary gears, especially in India.

In general, technology-enabled financial services were preferred by consumers as add-on luxuries that enabled them to access their money remotely and at their convenience. Lack of technological awareness, minimal penetration of smartphones and Internet in the hinterlands, data-security concerns, prevalent financial frauds & dependence on physical transactions were major deterrents in the adoption of fintech by consumers.

However, the onset of the COVID-19 pandemic revolutionised the financial services landscape. As India went into lockdown, it was gripped with not only a health concern, but also a very real economic crisis.

Driven by the government’s vision of “DIGITAL INDIA” and the zeal to make finances seamless the innovations in the BFSI sector enabled the Indian economy to stay afloat. Innovations that are easy, affordable, and secure have brought financial services within the reach of the populace.

According to a report by ACI Worldwide, the Indian financial ecosystem enabled the highest number of real-time online transactions in 2020, surpassing China and the United States of America.

INNOVATIONS WHICH HAVE TRANSFORMED INDIAN FINANCIAL ECOSYSTEM

1. UPI or Unified Payments Interface: Links multiple bank accounts with a single mobile app enabling merchant payments by customers at a single tap. The customer just needs to enter or scan the merchant’s UPI ID to initiate transactions. UPI facilitates 24*7 money transfer powered by single click 2-factor authentication security as per regulatory guidelines, ensuring swift & secure money transfer. The innovation helped to mitigate customers’ dependence on cash for merchant payments. Some of the popular players in this segment are Phone Pe, Google Pay, Paytm and BHIM.

2. Insta Digital Bank Account: Gone are the days of lengthy paperwork and hours spent at a bank’s branch for opening an account. To provide customers with the facility of opening a bank account digitally, several banks in India launched Aadhar based Insta Digital Bank Account. Any Indian citizen above 18, with a valid PAN and Aadhaar number, can open a savings account online by downloading the bank’s app or through the bank’s website. It is mandatory to provide valid Aadhar & PAN details along with a few primary details for account registration. From the date of registration, the account will be valid for a year within which a customer can get a full KYC done, necessary for the long-term operation of the account.

Here are some of the popular Insta Bank Account options – SBI Insta Savings Account, HDFC Instant Savings Account, ICICI Insta Save Account, Kotak 811 Digital Bank Account, Axis ASAP Instant Savings Account

3. Digital Insurance and aggregators: Digital insurance aggregators are one-stop shops that accumulate, compare, customise and recommend policies to customers provided by a plethora of insurers. These aggregators are e-commerce sites for insurance products. Through digital insurance aggregators, one can purchase a health policy by undergoing a telemedical process complemented by e-KYC or V-KYC. The app/web-based solutions also provide customers with a digital storage facility for purchased insurances and claim details, accessible at a single click. Along with this, digital insurance aggregators assist during the claim process and renewal of policies. And all this while the customers are in the safety of their abode.

Some of the popular digital insurance aggregators in India are PolicyX, Easypolicy, Policybazaar, and MIC Insurance.