This is a guest column is by Archit Gupta, Founder and CEO, ClearTax.in
There are a few universal truths that nobody can deny, like the fact that the Sun rises in the East, or that money makes the world go round, or that technology has become very integral to all aspects of life. And given how crucial finance and technology are to everyday living, it was but natural to see an integration between the two. This led to the rise of Fintech, which enabled quick, convenient and ubiquitous access to a plethora of financial services through technology. The development was hailed as a revolution in the field of finance, as it added transparency and delivered swifter consumer-facing solutions in an industry that was considered very obscure, incomprehensible and time-consuming for the uninitiated. But was it really a revolution?
I, for one, disagree. Revolution is a single-point concept where a dramatic change occurs at one fixed instant. What we are seeing today in Fintech is not wholesale transformation, but is more of a continued evolution. Technology and finance have always gone hand-in-hand; banking and financial institutions have long been leveraging the latest technologies to streamline their operational processes. The only difference is that the rapid proliferation of smartphones and development of better connectivity solutions such as 4G/LTE have made finance more accessible to the end-consumer and facilitated easier money management. What was always present has been tailored to meet the growing requirements of today’s consumer, whilst at the same time also opening a two-way communication channel between the consumer and the service provider.
As a result of this development, people today are more aware about personal financial concerns, and are actively seeking out better and more convenient ways to handle money-related matters such as retirement income, profitable investments, buying houses and cars, planning for vacations and education. Fintech solutions, through their advanced predictive algorithms and data analytic capabilities, are rapidly emerging as the most viable channels that allow Indians to spend wisely, save better and earn more.
The rise of Fintech in India can also be attributed to the growing spending power of the Indian consumer. With both spouses often working nowadays, there is a noticeable increase in the financial strength within an average Indian household. Being tied-up in their busy work schedules and strapped for times, these households often end up relying on technology to manage their finances. Whether making an NEFT transaction, using e-wallets or simply monitoring their expenses on-the-go, Fintech solutions are fast becoming a necessity for the Indian consumer.
The industry is also playing a major role in the economic development of the country. By streamlining the processes for businesses as well as consumers, Fintech solution providers are facilitating business growth by adding great value to all parties involved. Take, for example, the traditional cash-based physical shopping. Not only did you have to stand in a long queue for something as trivial as a cash withdrawal, but you then also had to visit multiple shops to buy an item. With Fintech enabling one-touch access to your capital, not only can you pay conveniently at an e-commerce portal of your choice, but also have the flexibility of browsing through greater inventory online in a shorter duration of time. Businesses, on the other hand, benefit from lower operational costs, more transactions and increased margins.
In short, technology is the way forward for finance, and Fintech is the enabler for its continued growth. Smartphones, with a host of Fintech applications installed in them, are already fast becoming the new credit cards. Given the impact it can have on the economy, Fintech must be considered a public-private partnership, and start-ups and businesses operating in the space must be supported by the government as well as the extant industry players. As the industry grows and technology addresses more financial problems, we will see increased spending power, greater ease of doing business and a big boost in the operational margins for businesses. A win-win situation for everyone, don’t you think?
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