We're celebrating our 20th birthday this month, and we've invited industry experts, researchers and scientists to write in and paint a vision of the future, 20 years from now. Here's what Uday Chaudhari, Senior Director, Technology, Synechron had to share about his vision of the future.
The FinTech sphere has drastically changed in recent years; amongst the various reasons, capturing new markets remains primary. The under-banked and un-banked consumers of FinTech companies are reaching and capitalizing on markets that have been underserved to date. Thus, there is hardly any doubt that FinTech has found its place in the innovation economy.
New vistas are unfolding the opportunities for a more supportive and cognitive structure for the FinTech Industry, such as Embedded FinTech, which is certain to penetrate the B2C domain. Trends show that customers no longer want to search for complicated ways to pay, invest, save, and spend; they’re interested in direct-to-consumer brands which, will certainly make the stream of superlative FinTech support be the ‘new-in thing.’ Embedded Finance will manoeuvre new ways of revenue stream for customer convenience and certainly a future in which FinTechs make more home runs. This new blue-eyed boy is built to eradicate the gaps between consumers and businesses, by removing the third-party bank or lender. The world’s leading companies are now providing Fintech infrastructure APIs to offer other financial services directly. The opportunities of Embedded Finance will further develop in areas of payments, lending, investments, insurance, banking, for starters and will eventually enable businesses to study the spending patterns of users, to develop and derive suitable financial plans, such as for retirement. Global brands such as Google, Apple, Tesla, are streamlining Embedded FinTech Services for a more cognitive consumer-oriented service. It seems in no time the rest will follow the same trend to take customer service to the next level creating a leap for the FinTech industry. While this may appear ambitious or exclusive for some, the FinTech industry is up for a treat with deep domain-specific innovation and research. With such customer-specific products, we’re also looking at AI-powered investment designing tools, customizing the right set of options, basis one’s earning, needs, debts and risk appetites, for both organizations and individuals. At the moment, the Investment Banking corps depend on their workforce to drive these projects, but in the near future, these roles could be taken over by AI-driven algorithms.
For a developing country such as India, internet penetration stands at 700 MN in 2021, and will rise to 100% by 2041; similarly, the smartphone penetration rate, which has not yet yielded 50%, will also rise to 100%, making the dream of a digital India, a reality. This dream, ably supported by UPI products will make way for a bank-less world. These bank-less operations stand a possibility to remove the presence of brick-and-mortar branches and introduce instant banking experience through VR (Virtual Reality). Today, customers either stand in long queues, waiting to be connected to the customer service representatives on calls, or even wait for their emails to be answered for weeks, but the VR banking experience will enable customers to interact with bank representatives, almost instantly.
The future of FinTech will also make payments easier with the advent of the internet of things (IoT ). Frictionless payments will enable consumers to pay with almost anything, making their shopping experience even better. Future will witness this expand beyond payments, in requests, bids, loans, etc.
Another ground-breaking, novel avenue, that will further expand and strengthen FinTech’s future is Federated Learning. This new Machine Learning technique helps train algorithms across multiple servers and devices locally, without exchanging the data, and then sending back the model to the central server, where it is aggregated, and a new consolidated model is developed. This new improved model is then sent back to the devices and servers. In simpler words, one big team works together, without revealing the secrets of the smaller teams, or ‘bringing the code to the data, instead of the data to the code’. Federated Learning, with the enablement of laws such as the PSD2 in the UK, paves way for more intelligent usability of data. Additionally, the volume of data is increasing with each passing second, and it wouldn’t be too ambitious to expect that we’d function with newer models and methods of bifurcating unstructured data in the future.
The impact of the pandemic has added more fuel to these thoughts. People are concerned when it comes to managing their money or getting financial service without compromising security. Financial markets thus have a lot of opportunities with this rising consumer consciousness. In this respect, asset management, loan, credit, and brand-oriented financial services are taking the front seat. IoT, AI, Blockchain, and Cloud Computing are paving the scope more prominently than ever to take the businesses to new heights and amongst them stands the futuristic possibilities of the Financial Services industry beyond decades.
– By Uday Chaudhari, Senior Director, Technology, Synechron
To read what other industry leaders and experts have to say about the future in their respective fields, visit our 20th Anniversary Microsite.