The world of finance is changing continuously. Now, it’s not limited to traditional banks and financial institutions. COVID-19 has given transformation to world industries. And it was forced to come up with some sustainable financial technology to simplify the transactions across different parties.
Now countries like India are investing in API stacks, increasing funds for IT innovation, and taking other initiatives. So, let’s look at five emerging trends that may redefine the future of the financial industry.
#1. AA Framework
Account Aggregator (AA) framework is the latest digital revolution in India. With this framework, banks will work as data providers, and lenders will work as data seekers. The AA will work as a mode of communication between third parties operated by the bank using the AA framework. This technology will not save the data collected from the users but will efficiently transmit the given data.
India’s major financial regulators like SEBI, RBI, PFRDA, and IRDA are working on this shared project. This framework will help digitise, simplify, and regulate end customer processes. AA will support financial regulators to provide transparently, improved, and secured financial inclusion.
#2. Digital Finance
The fintech product demand and development growth accelerated in 2016 and achieved their highest during the pandemic. The latest report of RBI states India’s current fintech product adoption rate is nearly 60%. With digital finance acceleration, the rural areas of India can also see a mass shift to a digital payment economy.
The future of the fintech industry is lucrative in India because of unstoppable government initiatives, investment, and an increased digital footprint. Compared to traditional financial resources, fintech products seem more user friendly and efficient. Therefore, digital finance is becoming the backbone of the Indian economy.
#3. Blockchain
The financial industry notices trillions of dollars in transactions every day. Here most merchants and customers prioritise security, transparency, and cost-efficiency. But still, this sector encounters over 45% of cybercrime each year. This is why businesses and financial regulators are thinking about blockchain technology. Blockchain technology is a new big thing in the financial sector.
It offers secured, transparent, cost-effective, and fast financial transactions. The growth of blockchain started with bitcoin and other cryptocurrencies, and now it has spread to each industry. This technology uses complex digital algorithms to record transactions. So, its platform can ensure irrevocable, fast, easy, and trusted transactions at a mass level.
#4. Customer Satisfaction
Customer satisfaction is a prime goal for most companies and organisations across different industries. Customers of today are much more tech-savvy than ever before. Now two new generations have emerged, influential in disrupting the industries. Banks used to have complex website structures, and customers had to visit branch offices for ideal services.
But now, most banks have started working to give simple and easy-to-use solutions to their customers. Banks and financial institutions know that digital interaction is crucial for the best customer experience.
Conclusion
The Financial Industry is seeing rapid growth and also witnessing many emerging trends. Trends like blockchain technology, advancement in digital finance, and the AA framework will surely redefine the financial industry. Many other trends like AI also have the potential to give financial regulators a solution to offer better customer service and financial solutions to their customers.
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