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FinTech a wave to pass on or an Opening to..

Abstract -: Compliments of the season. This post coming out of  own my observations, experience and reading from Internet.

Payments innovation is happening and it’s continued since end of 2014. Interestingly its driven by those outside of traditional payment industry. A innovative payments either in IoT or Fintech domain is when the surface or boundary of availability, affordability and accessibility is insufficient to divert the this wave, so that the wave passes the surface or boundary but the nearest sectors of the payment wave tend to be attracted to and are retarded by the surface or boundary/regulation/compliance. India is coming out as a very strong and innovative hub for Fintech and hope that would continue and stay for long as India in business and tech business is quite strong.

Payments looks really easy. Which is why innovation is so hard. While the cash payments wave continues unaffected. Mobile/Internet Payments on e/m Commerce Platform is bringing new innovations to the payment industry and changing the way merchants do business. The change in this segment is so huge which cant be absorbed alone by one type of business entity. Payments gateway and solution service companies experimenting with customised solutions rather than giving one-size-fits-all(Like a master one master key for all holes)  product solutions to merchants. 

Introduction -: Year 2015 was the year of start/introduction which brought transformation/ revolution or a big/huge tsunami culture wave in cross border remittance, lending, crowdfunding, Insurance, banking (Not Banks), cryptocurrencies, micro payments through mobile devices and also it gave solid kick to take off the credit ratting systems to offer micro lending on the fly. Micro Insurance for funeral expenses, Accidental insurance for medical expenses and education insurance for kids whose guardians pass on during their(kids) time of school. Wallet and payments service providers went a step ahead and built products to enable one-touch solutions instead of a user having to go through multiple steps to complete a transaction.

FinTech surrounded by Payments(Mobile[USSD, Mobile App & SMS], Plastic[POS & Internet]), Lending, BigData, security, Investment portfolio and wealth management, money transfers, Cities with jobs, innovation hubs, security & people. If we look at FinTech and its strings ; very easily tree like picture can come out. Credit rating system will show the path to deliver the most required need.  

Question coming out of all this innovation in front of ministry of innovation - Is FinTech a wave to pass on or an Opening to some giant and stable water flow kind of system which would take bit long before it gets dry out and grow to its optimum level. FinTech is on rise and day on day basis its bring banking services so close to every consumer and business which was never felt or made available before.

The banking services served by fintech leaders are very innovative, different and easy to use and make use of for benefitting the business. Fintech as the leader of today in global financial services, knows that modern payment solutions need to be able to evolve and adapt, nimbly and securely, with the ever-changing trends in consumer behavior. By the way Fintech built infrastructure to enable more merchants to accept payments. 

Main Story -: FinTech with help of IoT is putting too much value added services on table that engage consumers in a more meaningful fashion. Merchants can interact with consumers like never before, offering location based services/offers, individualize loyalty rewards and discounts, the ability to pay with points (Sort of virtual currencies), personalize suggestions using beacons and identity services, On the fly loans/credit and cash advance too. The movement of money is developing quickly; starting from its core platform to point of sales / point of payment acceptance.

Methods to transfer/ remittance money is adopting new technologies on every days basis and so the new threats. Fintech is making use of IoT to transforms lives and business by adopting all these new technologies/threats to keep the growth pace on and handshake with biggest constant factor “Change”. Digital Payments, Machine Learning, Online Payments, Digital currencies Payments through mobile payments (USSD, Mobile Apps, NFC & SMS), and Big Data are the main pillar of FinTech roof.

Technology has changed and new FinTech startups accessing fundings and investment in a very easily and swiftly. Market place leader, investors, online exchange platforms helping all parties to come together to meet and exchange their ideas and business models like never before. Risk assesment or mitigation is also coming on the fly. FinTech startups also ensuring that compliance, policy makers & regulators to have access to the information which is urgent, important and authentic.

Fintech & IoT combo offerings through payment trending/spending habits of consumers. And merchants can accomplish this seamlessly without the need for POS or terminal recertification.  Financial technology services firms are deploying veery easy, simple and real uncomplicated mix of technologies, computer systems, applications, and processes to serve customers and business partners and to solve organizational challenges. And legacy systems become increasingly inefficient as they age (Core Banking Platforms, Credit rating systems & BI Platforms etc) — in part because they are often not interoperable with newer technologies. Like some one said “relying on sports will be a poison pill for cable and satellite services”. Same goes for banks , mno, financial services institutions etc.

A financial services firm that depends on legacy or single content/service systems will frequently encounter serious problems when attempting to add newer software and services, Modern open ended API, User defined architectures & Software applications(Saas). Fintech is putting efforts to solve problems by addressing it with point-to-point integrations among existing systems and with little add on flavours so that it would remain viable, relevant and cost effective. In time, however, these custom point-to-point integrations create multiple, fragile, and complicated dependencies (This is for sure for any technology). Systems coming out of these solutions are prone to failure and responsible for instability.

And even when they work, the complexity negatively impacts the business resources. Bitcoin, pre-funding and gold coin systems are on rise to speedup the payment , influence government policies and swift closure to contracts among stake holders. FinTech with help of IoT, scecurity systems, striclt AML policies needs to ensure and facilitates a better understanding and working system on how digital currencies operates in technical and economic level to hit the correct equilibrium. So now with help of Fintech industry is gaining access to easy, open and less cost systems.

FinTech or financial technology adding technology in whole of banking, securities, investments and finance industry. Technology is transforming local transactions to national ones. Lending, money remmitance, and a host of other financial activities are being profoundly changed by the ease with which technology allows people to interact over distance. Fintech to take the lead to ensure an economy where innovation and prosperity can cross state lines. Because of FinTech data has been more available, accessible and usable to give a new shape in form of credit rating to offer on the fly loan/credit.

Making decisions for investments and long terms planning through forecasting. And shifting ecosystem dynamics in a pretty big way. Protecting cardholders is less about authorizing transactions. And more about authenticating their digital identities. Merchants will change. When they see consumer demand. 

Conclusion -: Banks are on high alerts and many have started coming out of their old sleep but with pace which is very very slow or almost negligible. Faster/quick/swift payments is a solution. But what's the problem? Investor protection against back drops and fraudster are rapidly on raise with help of advance technologies. The first is that the rise of these non-traditional payments innovators doesn't necessarily mean the demise of some of the biggest names in payments. Many of them are on the list, too – Plastic Money companies aren't suffering at the expense of these innovators. Payments is becoming invisible. In fact, it's quite the contrary. The tracks they've laid over the years and the innovations they've made to the platforms is what's give payments life to these new innovators.


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Vinod Sharma

Vinod Sharma

CTO - FinTech Domain

Econet Wireless Zimbabwe

Member since

20 Jan 2016



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This post is from a series of posts in the group:

Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.

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