Digital Fintech Ecosystem is the growing trend and the roaring mantra for finance sectors realizing its benefits. Digital Financial technology, or Digital Fintech ecosystem, involves designing and delivering financial products and services through technology. The term fintech is derived from “Financial Technology.” It refers to software or modern technology used by finance-based organizations that provide mechanized and improved financial services. At its core, fintech lending in India is utilized to help and aid finance-based organizations in the financial operations processes using software and algorithms used on computers and smartphones.
The fast and innovative headway has changed the way organizations manage their finances. Many finance-based organizations are continually looking into using fintech as their source of services for their financial department’s multiple roles. These days tech-savvy customers usually prefer lending, and loan management, to be simple, i.e., without any person’s assistance or visit to any bank.
Digital Fintech Ecosystem in India describes multiple financial activities, such as money transfer, depositing a cheque, raising money for, and managing loans, generally without any person’s assistance. According to EY’s 2017 report, “Fintech Adoption Index, one-third of consumers utilize at least two or more fintech services.” Indian Lenders Association has been adamant about encouraging Digital Fintech Ecosystem in India and make it a trend in the present scenario.
About Digital Fintech Ecosystem
With the inexorable march of technological advances & digital transformation, we are now witnessing rampant changes in highly regulated sectors like finance, especially fintech or financial technology development. This broad umbrella term describes technologies in the financial services sector. Digital Fintech Ecosystem is a form of alternative finance. Innovations in new financial services (e.g., digital wallet) offer better convenience, efficiency, and inclusion at a lower cost, thus eroding traditional establishments’ reliance.
Digital Fintech ecosystem is propelled by the confluence of multiple advances in technology: the availability and affordability of infrastructure (e.g., Internet, mobile technology, sensors), the maturing technological applications (e.g., platform, big data analysis), and business operations (e.g., sharing economy), among others.
Digital Fintech Ecosystem is the new environment that involves financial technology as a process of dealing with day to day operations of finance based sectors. The Digital Fintech ecosystem involves innovation, advanced knowledge, inclusion, etc. Together, financial services companies and fintech startups form an ecosystem. From an innovation perspective, one’s efforts help further another’s. Finance based organizations see what the other is doing and make similar adjustments to their offerings. There is also increased acceptance of new technologies, as one’s addition of a particular technology helps the other. Ultimately, fintech ends up being a tiny world. As an Indian Lenders Association, we provide a stable platform and act as a mediator between the Fintech companies and finance-based organizations. Digital Fintech Ecosystem creates a conducive environment of collaboration and consolidation.
- Fintech is emerging from the gaps in the mainstream of the financial services ecosystem.
- A key enabler of fintech’s success is catering to unmet customer needs by quickly and creatively harnessing emerging digital technologies.
- Fintech companies have harnessed digital technologies to offer customers value in critical areas of price, convenience, access, choice, and community.
- The Digital Fintech ecosystem provides benefits to both Fintech companies and finance based organizations. The platform aims to deliver value by keeping the customer in focus.
- Security and safety while dealing in borrowing and lending services is the main agenda.
How is Fintech Useful in Lendings & Borrowings?
Fintech, a combination of words “financial” and “technology,” is a relatively new & often nebulous term that applies to any emerging technology that helps consumers and financial institutions deliver financial services in more unique, faster ways than traditionally available. Think of the difference between walking into a bank to request a balance and the ability to pull out information in no time on your phone. The latter one is a better and easiest way to grasp finance-related services. And this is how one will have a good idea of fintech’s impact.
Everything from a consumer’s ability to go online and see their financial transactions to apps that allow paying friends to tools that will enable financial institutions to make quick lending decisions is part of the evolution of financial services.
Fintech empowers customers to take charge of their financial lives, leading to much more significant financial literacy than ever before. It’s tearing down the old silos and advancing the consumers’ financial situation and outcomes by leveraging advanced technology.
Fintech is also improving credit by streamlining uncertainty assessment, speeding up approval processes, and making access easier. Billions of people worldwide can now apply for a loan on their mobile devices, and new data points and better risk modeling are expanding credit to underserved populations. Additionally, consumers can request credit reports multiple times a year without dinging their score, making the entire backend of the lending world more transparent for everyone. Fintech companies directly fund small business loans and are powered by transactional data to help make rapid lending decisions. Tapping into peer-to-peer lending, the Indian Lenderd Association lets users loan each other money (P2P lending) for business ventures without a traditional financial institution’s involvement. Each of these innovations is made possible by using advanced analytics across digital platforms.
Benefits of Digital Fintech Ecosystem
Benefits of Fintech lending in Digital Fintech Ecosystem include:
Fast Approval– Digital Fintech Ecosystem in India can increase accessibility and significantly speed up finance-related services’ approval rate. In fact, in certain situations, the application or approval process gets covered up within 24 hours. Fintechs simplify the process by allowing businesses to fill an application sent to multiple loan providers. Beyond making the process easier for the applicants, marketplace lending also opens up more opportunities for borrowers to find an appropriate lender to fit their needs and approve them.
Convenient- Many Fintech companies make great use of mobile connectivity to enhance transactions’ efficiency and convenience. Customers having better access to smartphones & tablets enables them to manage their finance lending or borrowing. Fintechs in this Digital fintech ecosystem can streamline their processes and provide an improved customer experience.
Reduced Biasness- Fintech uses advanced technology and algorithms to analyze loan-related applications. Finance based organization that has been underserved in the past now no longer face the prejudice found in the traditional business lending process. Thanks to the advent of fintech loans, business financing is now a simple process.
More Improvised Services- Fintech lending in India is a process that enjoys not only lower operating costs, but they can more quickly react to customers individual needs’ since they have better access to a range of information about them. Fintech business loans make fully utilize digital innovations by including a way for loan applicants to securely connect their bank accounts. Once again, financial technology makes the loan application process easier for fintech lenders and safer for borrowers, and healthier for the environment.
Security- Tackling the latest mobile technologies have resulted in Fintech companies investing in significant security to ensure customer data is kept safe and intact. With speed and innovations come the need for tightened security protocols, and Fintech innovations have influenced this. Hence finance-based organizations are taking all proper precautions, and so are the Fintech companies.
Lower Costs- Fintech lending in India can give their customers the advantage of lower premiums than those associated with the traditional institutions. They rid themselves of any conventional or brick & mortar costs like rent, advertising, and salaries & instead invest money in their clients.
Financial technology is here to stay and shall continue to change the lending landscape as the years progress. With excitement accumulating around anticipated fintech lending innovations, it’s crucial to stay up-to-date on what all developments are taking place. One must keep up with advancements made in financial technology to take the fullest advantage of fintech business loans’ benefits.
We actively help build a Digital Fintech ecosystem nationally. We develop commercial relationships with other experts and market leaders to help establish a Digital Fintech ecosystem. The Digital Fintech ecosystem encourages innovation workshops, and acceleration programs help strengthen the competitive edge, unlock innovation potential, transform the current culture, and utilize digital business platforms with the best innovators. The Digital Fintech ecosystem helps create internal innovation cells and support organizations to learn, launch prototypes, and grow faster.
As Indian Lenders Association, we are adamant about supporting the Finance-based organization in availing the benefits of the digital fintech ecosystem. We shall ensure a secure platform where Finance based organizations can easily rely on fintech and carry day-to-day operations accordingly. Digital Fintech Ecosystem is a blessing in disguise for Fintech companies, finance-based organizations, and us as Indian Lenders Association. It makes the overall process much more comfortable and accessible. It mitigates almost all complicated processes and enables the business to deal in finance-related services to benefit from this.