FinTech, or financial technology, contributes to financial inclusion by increasing the number of people who can access financial services. But the fintech sector faces several difficulties.
Technology has recently been involved in many aspects of our existence. Even several economic areas have undergone a major transformation as a result of the increase in technological innovation. Businesses have also suffered a great deal. But in the financial sector, technological development has had a significant impact on the development of the fintech sector.
FinTech businesses employ technology to enhance how banking and financial services are delivered. Some of the fintech businesses with offices in India are Phonepe, CRED, and Groww.
The current scenario of FinTech in India
The fintech industry in India has expanded significantly during the past several years. The use of digital payment methods like AePS (Aadhaar-enabled Payment Systems), UPI, mobile wallets, etc. is an illustration of this. Many business owners are now closely scrutinizing the data that is stored in their systems and supply chains as a result. Amid complicated trading situations, they are using this knowledge to act and make quick decisions.
These capabilities are offered by fintech solutions. For instance, open banking, which is supported by APIs, is assisting businesses in understanding their present financial situation better. By gaining greater access to their banking information, they can accomplish this.
FinTech businesses collect data to offer individualized services. For them, securing data against cyberattacks is crucial. Cyberattacks on the fintech industry target both financial assets and personal information. The data may potentially be used fraudulently to steal identities.
For fintech organizations, balancing security and a positive user experience is another difficulty.
Even though more and more people are using digital financial services, many Indians continue to utilize cash, either because they don’t have a bank account or because they lack digital literacy. Thus, attracting these customers to digital financial services is still another difficulty.