Fintech

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/04/banner-1251-1.webp" alt="Account Aggregator" title="" id="9hxp4jacw" width="100%" height="661">Data is a gold mine that drives insights and efficiencies across industries. Gartner predicts that by 2023, companies that actively leverage shared data will outperform their peers in crucial metrics. With 180+ zettabytes of data estimated to be created by 2025, businesses across industries need to devise strategies to gain access to relevant consumer information. Such access will drive insight-driven decisions to boost revenue, <a class="link" href="https://m2pfintech.com/blog/why-is-risk-based-authentication-rba-critical-for-banks/">mitigate risks</a>, and reduce costs.<h2 class="heading-node" id="134f" style="text-align: justify">Consent-based digital access to data</h2>Account aggregators or financial data aggregators play a significant role in enabling data access to financial institutions, businesses, and individuals. Prioritizing fiduciary consumer relationships, account aggregators share digitally signed and encrypted data upon explicit consumer consent.<h2 class="heading-node" id="160d" style="text-align: justify">Financial data aggregation in India</h2>India launched its Account Aggregator (AA) network in September 2021, as the first step towards open banking. Built on the Data Empowerment and Protection Architecture (DEPA), the account aggregator framework is the world’s leading consensual data-sharing infrastructure.This digital data access structure serves as a substantial digital enablement initiative after the launch of public infrastructure for digital identification (Aadhaar) and <a class="link" href="https://m2pfintech.com/blog/the-rise-of-digital-payments-2/">digital payments</a> (UPI). Millions of customers can now digitally access and share their financial data in a compliant manner.<h2 class="heading-node" id="019c" style="text-align: justify">Potential to transform efficiencies</h2>The AA framework holds the potential to transform the efficiencies and profitability of financial institutions and businesses in India. Banks, fintechs, and NBFCs can use consumer data to widen target-base, personalize services, lower risks, enhance customer experience, and future-proof their product portfolio. Collecting, cleansing, and synthesizing pertinent data helps enhance insight-driven decisions and executions.Democratization of data access via account aggregator networks has brought in a win-win scenario for businesses, consumers, and <a class="link" href="https://m2pfintech.com/blog/digital-lending-open-credit-enablement-network/">new-age digital lenders</a> with advanced underwriting algorithms and a larger risk appetite. They have broken the data monopoly of digital and financial services firms by transferring data sharing power to individuals.<h2 class="heading-node" id="a06c" style="text-align: justify">So, who are account aggregators in India?</h2>Account aggregators are NBFC-AA licensed entities that are regulated by the RBI. Contrary to the name, they cannot ‘aggregate’ data. They only enable consensual data sharing and access between consumers and financial institutions in the network. Account aggregators cannot read or resell data. They can carry data from one financial institution to another based on individual consent and direction. Consumers also have the choice to revoke data already shared.<h2 class="heading-node" id="b934" style="text-align: justify">How account aggregation happens?</h2>Data gathering, collation, and dissemination are enabled through open <a class="link" href="https://m2pfintech.com/blog/api-the-power-that-drives-new-age-banking-ecosystems/">Application Programming Interface (API</a>) connections.<h2 class="heading-node" id="e756" style="text-align: justify">Do account aggregators benefit individuals?</h2>The answer is yes.Account aggregators help consumers get rid of laborious paperwork, effort, and security issues involved in notarizing, stamping, signing and scanning physical copies of bank statements. Users need not have to expose themselves to vulnerabilities of sharing login credentials and financial history to a third party.With mobile-based digital data access and sharing process, account aggregators eliminate the conventional hassles of data access and sharing. People across demographics will get access to experiential, preference-based financial services and products. While the affluent will experience value through customized investment and insurance options, the popular masses will enjoy greater inclusiveness through friction-free access to formal credit.<h2 class="heading-node" id="0dd3" style="text-align: justify">Participants in the AA network</h2>While individuals and small businesses form the epicentre, the AA network comprises the three participants listed below.1. Financial Information Providers (FIP)&nbsp;— Data sources like banks, tax platforms &amp; insurance providers.2. Financial Information Users (FIU)&nbsp;— Data recipients such as banks, NBFCs, and <a class="link" href="https://m2pfintech.com/blog/fintech-a-catalyst-for-financial-inclusion/">fintech</a> firms.3. Account Aggregators (AA)&nbsp;— RBI-regulated entities that facilitate real-time data sharing.<img src="https://miro.medium.com/max/1400/1*UnkSCGfGWZf-YpOqny9J7w.jpeg" alt="M2P Fintech" title="" width="100%" height="529">Source: PIB Delhi<h2 class="heading-node" id="72d9" style="text-align: justify">Banks in the AA network</h2>The top eight banks (listed below) that cater to over 300 million consumers have joined the AA network.1. Axis Bank2. ICICI Bank3. IndusInd Bank4. HDFC Bank5. Kotak Mahindra Bank6. IDFC First Bank7. Federal Bank8. State Bank of India<h2 class="heading-node" id="d405" style="text-align: justify">What kind of data does AAs share? How are they different from Aadhar eKYC, credit bureau, and CKYC?</h2>Central Know Your Customer (<a class="link" href="https://m2pfintech.com/blog/know-your-customer-kyc-the-need-for-authentication/">CKYC</a>) registry and paperless Aadhar Electronic Know Your Customer (<a class="link" href="https://m2pfintech.com/blog/know-your-customer-kyc-the-need-for-authentication/">EKYC</a>) capture identity verification and only shares data such as name, address, and gender. And credit bureaus reveal only the credit score, loan, and repayment history of consumers.On the other hand, account aggregators facilitate transaction data sharing from savings, <a class="link" href="https://m2pfintech.com/blog/how-can-banks-and-nbfcs-leverage-the-potential-of-digital-fds/">deposits</a>, or current accounts. They share data pertaining to consumer bank transactions, tax, pension, securities, insurance, and much more.<h2 class="heading-node" id="5e7e" style="text-align: justify">Is data sharing via AA network secure?</h2>Data shared on the account aggregator network is completely secure. It is encrypted by the sender and can be decrypted only by the intended recipient. End-to-end encryptions and digital signatures remove vulnerabilities and secure the process.<h2 class="heading-node" id="42b2" style="text-align: justify">What if consumers choose not to share data?</h2>By all means, a consumer can choose not to share any data. Joining the AA network or registering for data sharing is completely voluntary. They can link the account of their choice, enable or revoke data access at any point in time.<h2 class="heading-node" id="b9c4" style="text-align: justify">Use cases for account aggregator network</h2>Here are use cases in which account aggregators can drive efficiencies and add value to consumers and financial institutions.Personal finance management&nbsp;— Consumers can analyze personal spends across accounts, which will help generate recommendations to streamline expenditure. This process will enable better personal finance goals and budgetary adherence for consumers.Cashflow-based lending&nbsp;— Consuming data from FIPs, FIUs can get better visibility into the cash flow of applicants. Cashflow-based lending will accelerate mainstream lending, especially in SME and MSME credit space.Alternate data for credit assessment&nbsp;— Evaluating a consumer’s creditworthiness is a true challenge if there is inadequate data on his income or payment history. If credit applicants who do not have formal credit access could share their telecom bill payment to the lender, this will generate an alternate data set to assess creditworthiness.Loan monitoring for predictive default analysis&nbsp;— Every lender will want visibility into the borrower’s financial behavior to ensure discipline in repayments. The income and outflow from a person’s bank account could reveal his financial behavior. And this could help lenders predict default patterns.Selling customized financial products&nbsp;— Accessing data concerning consumer behavior with financial products will help financial institutions involved in wealth management and insurance customize their products.Wealth management&nbsp;— Imagine a customer has invested in insurance from A, mutual fund from B, Gold deposits from C, and savings account from D. An account aggregator can unify all this data and help wealth managers handle customers' portfolios more efficiently.Accounts reconciliation for small businesses&nbsp;— With account aggregators, SMEs and MSMEs would not require to manually feed in Tally/ QuickBooks for their daily invoices. They can simply consent to platforms to consume data from FIPs and derisk manual errors.Unified nomination register&nbsp;— Nominations in financial products today are decentralized, hence have to be managed individually. A joint collaboration between the account aggregator and the unified nomination register can solve this.Now, these are not all. We have just scratched the surface of the use cases that account aggregators could have. When more pipelines get enabled on AA network, the use cases will grow exponentially. Then they will have to address concerns surrounding platform stability, data privacy, and grievance redressal mechanisms.M2P believes in democratizing credit by empowering lenders with alternate data/ surrogate channels. Should you be looking for a partner who could help you look beyond conventional credit applicants' data, write to us at&nbsp;<a class="link" href="mailto:business@m2pfintech.com">business@m2pfintech.com</a><a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox.Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

Account Aggregator 101- Democratizing data access and sharing

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/05/Artboard-1-copy-8-7.webp" alt="M2P Fintech" title="" width="100%" height="253">The Reserve Bank of India (RBI) has promulgated new directives for credit and debit card issuance and conduct for 2022. The new guidelines are intended to protect the interests of retail customers. These norms are effective from July 1st, 2022.The directions on credit cards apply to all Scheduled Banks and all Non-Banking Financial Companies (NBFCs) operating in India. Yes, RBI has now opened a window for NBFCs to issue credit cards with prior approval from the regulator. Let us be clear here that the new regulations on credit cards do not apply to Payments Banks and State/District Central Cooperative Banks. On the other hand, the rules concerning debit cards apply to every bank operating in India.According to the new guidelines, commercial banks with a net worth of over Rs 100 crore can issue credit cards, either independently or by integrating with other card-issuing banks/NBFCs. Regional rural banks (RRBs) are now authorized to issue credit cards by partnering with their sponsor bank or other banks. Non-banking financial companies (NBFCs) can issue debit cards, credit cards, charge cards, or other similar products virtually or physically only after obtaining approval from the RBI.<h2 class="heading-node" id="0d03" style="text-align: justify">Key directives on credit cards</h2><ol class="list-node" id="3lsobeyqe"><li>RBI strictly prohibits banks from issuing unsolicited loans and cards or upgrading an existing loan/card without explicit consent from the customer/cardholder. Furthermore, upon nonadherence, banks or the card-issuers shall not only reverse charges but also pay a penalty of twice the value of the charges.</li><li>If the unsolicited cards are misused before reaching the customer, the card issuers shall be solely responsible for the losses incurred due to the misuse.</li><li>Written consent from the customer is required to issue or upgrade a credit card. Banks can accept digital consent if the customer cannot provide written consent; however, RBI must be notified.</li><li>When a cardholder raises a dispute on a transaction as ‘fraud,’ the card issuers must not charge on the transaction until the issue is settled.</li><li>Card issuers shall quote different Annualized Percentage Rates (APR) on credit cards for retail purchases, cash advances, balance transfers, and late payments or non-payment of the minimum amount due.</li><li>The card issuers should not impose any hidden charges while issuing credit cards. For example, EMI conversion with interest shall not be disguised as no-cost or zero-interest EMI.</li><li>For the closure of existing credit cards, the card issuers must honor the request within seven working days, subject to payment of all dues by the cardholder. If the issuer fails to complete the process within the given time frame, Rs.500/day penalty shall be imposed.</li><li>With respect to recovering debts, card issuers and their agents must not resort to intimidation or harassment. The lenders shall adhere to the fair practices code and avoid any verbal or physical harassment against any person, publicly humiliating and/or intruding upon the privacy of the customer’s family members and friends.</li><li>The card issuers shall limit the disclosure of customer information to the DSAs/DMAs/recovery agents. Card issuers must release only information that the agents require to discharge their duties and abstain from disclosing additional personal information. Also, the card issuers should ensure that customer information is not misused during credit card marketing.</li><li>Card issuers can report a credit card account as “past due” to CIBIL, CRIF, or others only if the amount remains unpaid for more than three days.</li></ol><h2 class="heading-node" id="e739" style="text-align: justify">Key directives on debit cards</h2><ol class="list-node" id="70pzbghi7"><li>Banks shall only issue debit cards to customers holding savings/current accounts. Issuance of debit cards to cash credit/loan account holders is prohibited.</li><li>Banks shall not force customers to avail the debit card. If a customer does not want a debit card, he/she cannot be denied other services from the bank. The debit card issuance should not be linked to the availment of other benefits from the bank.</li><li>Banks should develop a comprehensive debit card issuance policy and get approval from their boards and RBI. Subsequently, banks must roll out the debit cards per this policy.</li><li>Banks must provide options for disabling/blocking the form factor via internet/mobile banking, IVR, SMS, and/or other modes.</li><li>In place of plastic debit cards, Scheduled Commercial Banks can issue other form factors after obtaining explicit consent from the customer.</li></ol>In addition to the above regulations, RBI states, “It will not preclude the banks from linking the overdraft facility provided along with Pradhan Mantri Jan Dhan Yojana accounts with a debit card.”<h2 class="heading-node" id="b31d" style="text-align: justify">Directives for Co-branded cards</h2><ol class="list-node" id="9heafrx6i"><li>Co-branded debit/credit cards should indicate that they have been issued according to the co-branding arrangement.</li><li>A co-branding partner shall not market the card as its product. In addition, the card issuer’s name must be explicit on the cards.</li><li>The co-branding arrangement should be in accord with the card issuer’s board-approved policy.</li><li>Card issuers are accountable for the acts of the co-branding partner.</li></ol>For co-branding agreement between banks and NBFCs for credit cards, RBI states, “NBFCs, which desire to enter into a co-branding arrangement for issue of credit cards with a card-issuer, shall also be guided by the Guidelines on the issue of Co-Branded Credit Cards contained in the respective Master Directions applicable to NBFCs, as amended from time to time.”For more clarity on credit card and debit card issuance, write to us at&nbsp;<a class="link au mr" href="mailto:business@m2pfintech.com" target="_blank" rel="noopener ugc nofollow">business@m2pfintech.com</a>.<a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox.Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

RBI’s New Directives for Credit/Debit Card Issuance

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/05/Artboard-1-copy-8-3-1.webp" alt="M2P Fintech" title="" width="100%" height="358">Did you know it takes just 6 seconds to hack any credit or debit card?As the number of Card-Not-Present (CNP) transaction increases, so do the associated risk factors. The 6-second hacking window is quite scary, especially when you are a bank or a card issuer.Even though the end-consumer faces losses, card issuers and banks are the ones who will have to bear the major brunt, including refunding the customer, dealing with chargeback fees/fines, and investigation charges which often lead to reputation loss.<h2 class="heading-node" id="cae2" style="text-align: justify">Modus operandi of fraudsters</h2>Card payment fraud happens in both card-present and card-not-present scenarios. Usually, the customer gets unsolicited calls, text messages, emails, or unauthorized software update requests under the pretense of KYC updates, or gift offers.Scamsters pretend to be genuine in these communications and ask consumers to share personal information, card credentials, PIN, or OTP details. Phishing, skimming, and mail intercepting are among the key modus operandi that criminals use to defraud consumers of their money, data, and identity.Other usual scenarios include:Stolen or lost card fraud-&nbsp;In this situation, the card either slips out of the cardholder’s hands or is stolen. The fraudsters then use the card to go on a shopping spree and then discard the card.Account takeover-&nbsp;One of the rising crime scenarios today is complete account takeover. Here the fraudsters shoulder surf or steal card details and get in touch with the card-issuing company. Pretending to be the cardholder, they would falsely report a stolen card and ask for a replacement with modified address details. The genuine cardholder will know about this scam only when the card is used.Page Jacking-&nbsp;Here, the scamster redirects an e-commerce store page and takes the user to their malicious portal. This page would contain links with the potential to crack network security.Now, this is only the tip of the iceberg. Each day, fraudsters develop more sophisticated methods to commit card payment fraud.<h2 class="heading-node" id="75ac" style="text-align: justify">Signs banks need to look out for to identify fraudulent activity</h2>Card issuing banks need to be vigilant and check for signs to nip card scams in the bud. They need to design systems to proactively identify suspected fraudulent activity in real-time and decline these attempts before the cardholder is affected.Suppose a bank notices anomalous spending patterns, erratic location changes, or unexplainable large ticket transfers, they need to notify the cardholder and investigate the matter immediately.<h2 class="heading-node" id="4a4f" style="text-align: justify">What can banks do?</h2>Delivering secure, smooth, and customer-friendly online payments is critical for banks and card issuing companies. Otherwise, customers will leave in hoards, shifting their loyalty to competitors. Choosing a suitable authentication method is crucial to eliminate security risks in card payments.Gone are the days when binary authentication such as static passwords and usernames were unbreakable. Today cyber criminals use advanced technology that can decode these credentials in seconds. Hence, banks need to adapt to a more robust, scalable form of authentication that can be adjusted according to different risk levels.<h2 class="heading-node" id="9cf8" style="text-align: justify">The solution: Risk-Based Authentication (RBA)</h2>When it comes to the standard credential-based authentication process, the user will have to undergo two-factor authentication (2FA) or Multi-Factor Authentication (MFA), which is a One-Time Password (OTP) or password every time a transaction happens.But with risk-based authentication, it is not necessary that the transaction must go through 2FA. Instead, every single transaction is monitored and assessed for risk. And a risk score is assigned to evaluate if the transaction can occur securely.In conjunction with a few other parameters, including business rules/logic, this risk score effectively decides if a transaction requires a challenge or if it can be allowed to go through frictionless (without an explicit 2FA).Case studies from different markets suggest that ~90% of transactions tend to be low risk and can thus be allowed to go through frictionless. Around 8% may require some form of 2FA, and ~2% tend to be high risk and can be declined.Risk-based authentication helps banks cut fraud losses, reduces transaction drop-offs, and ensures regulatory compliance. It plays a critical role in boosting e-commerce by balancing customer experience and controlling fraud. Dynamic RBA systems power card issuers to identify optimal risk levels and deliver quick, secure, and seamless payments.More info…Risk-based authentication is a real-time process that assesses underlying risks and applies appropriate levels of controls. Also known as adaptive authentication, the identification happens based on the user’s risk profile when they try to authenticate who they claim to be.An increase in the user’s risk profile leads to stricter and more restrictive methods of authentication. Risk-based authentication uses behavioral profiling to assess risk and protect customer data.Risk-based authentication ensures a protective guard against complex security breaches and hacking attempts. The authentication uses various parameters such as the user’s transaction history, merchant profile, IP &amp; location, device usage history, and other critical parameters to assess risk.Based on the evaluation, the Access Control Server (ACS) decides if the user can complete the transaction without any additional factor of authentication or if there is a need for an additional factor of authentication such as the following.<ul class="list-node" id="kzbf8joyr"><li>One time passcode</li><li>Permanent or temporary PIN</li><li>Security question (knowledge-based authentication)</li><li>Biometric data, such as a fingerprint</li><li>Mobile phone-based authentication such as Swipe to Pay</li></ul><h2 class="heading-node" id="39bb" style="text-align: justify">Setting up an RBA system</h2>Designing and deploying a quality risk-based authentication system involves implementing&nbsp;<a class="link au mv" href="https://m2pfintech.com/blog/3d-secure-your-barrier-against-cyber-attacks/" rel="noopener">3D Secure (3DS)</a>. Now, 3D Secure is a payments security protocol that adds a strong layer of security to CNP transactions by tying payment authorization to the online authentication process.To authenticate the cardholder, the transaction needs to be redirected to the Access Control Server (ACS). Issuers can define their risk profile and set up the ACS to control the customer authentication experience based on the risk analysis. After the customer completes the authentication, the response is sent back to the merchant and processing bank.<h2 class="heading-node" id="46cd" style="text-align: justify">What is the ACS?</h2>Access Control Server (ACS) is the server that enables bank customers to authenticate themselves and complete card-based online transactions securely. The ACS is built on the 3-D Secure rails defined and certified by global card networks, including Visa and Mastercard.While the initial version of the 3DS protocol (3DS 1.0) was designed to boost customer confidence, it did not provide the most optimal transaction experience and resulted in a high percentage of online drop-offs and cart abandonments in quite a few markets.The updated protocol version, EMV 3DS or 3DS 2.0, is designed by EMV, the consortium of global card networks. This protocol is optimized to support in-app payments, facilitate risk-based authentication via the exchange of richer data parameters, and encourage the use of dynamic out-of-band authentication techniques such as biometrics.<h2 class="heading-node" id="89f6" style="text-align: justify">Features of our ACS system</h2>Our ACS system guarantees top-class customer security while ensuring a seamless transaction journey. It is easily configurable and provides issuers the flexibility to design a custom authentication experience for their customers.Some of the key features of our ACS<ul class="list-node" id="tpiux2p6i"><li>3DS 2.0 certified with support for Visa, Mastercard</li><li>Cloud-ready system with the platform set up in India and the UAE</li><li>Highly scalable and configurable platform</li><li>Best-in-class success rates and performance</li><li>24*7 application monitoring and production/operations support</li><li>Support variety of issuer integration options — real-time API fetch, batch file upload via SFTP, and push API</li><li>Comprehensive risk-based authentication system with scope for advanced rule design using an external data feed</li><li>Multiple modes of step-up, including OTP (SMS/email), swipe to pay (push notification), biometrics, soft tokens, etc.</li><li>Role-defined access to comprehensive reports and dashboards</li></ul>Now, this is Risk-Based Authentication in a nutshell for you.Got questions on how to implement a dynamic ACS system? Ask us at&nbsp;<a class="link au mv" href="mailto:business@m2pfintech.com" target="_blank" rel="noopener ugc nofollow">business@m2pfintech.com</a>.<a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox. Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

Why is Risk-Based Authentication (RBA) critical for banks?

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/05/Artboard-1-copy.webp" alt="M2P Fintech" title="" width="100%" height="285">No matter which investment vehicle hogs the limelight, nothing can break the charm of the good ol’ Fixed Deposit (FD). It is considered a perfect ‘coming-of-age’ gift for millions of first-time investors in India.<h2 class="heading-node" id="e59d">Factors contributing to the allure</h2>Private Banks, Public Sector Banks (PSBs), and Non-Banking Financial Companies (NBFCs) issue fixed deposit plans for aspiring investors. The guarantee of assured returns, high-interest rates, zero risk exposure, and tax exemptions make FD a preferred savings instrument for people across socioeconomic strata.Banks, fintech firms, and NBFCs offer <a class="link" href="https://m2pfintech.com/blog/secured-credit-cards-101-where-credit-meets-saving/">secured credit cards</a>, overdrafts, free insurance, and health cover to customers based on their fixed deposits. This adds to its greater appeal as a popular investment instrument.<h2 class="heading-node" id="360e">Difference between FDs offered by Banks and NBFCS</h2><img src="https://miro.medium.com/max/1310/1*Q3os2jdv6noFbEBHZfW3gA.jpeg" alt="M2P Fintech" title="" width="100%" height="284"><h2 class="heading-node" id="82aa">Digitization is critical</h2>Physical FD booking demanded strict protocols like the creation of bank accounts, extensive background verification, and laborious paperwork. Customers were not too happy with the complex, time-consuming journey to invest in an FD.Hence, digitization of deposits became the need of the hour to thrive in the evolving market. The convenience of product comparison, hassle-free onboarding, and digital payments/withdrawal attracted more consumers to choose online deposit plans.PSUs, private banks, and NBFCs are actively deploying online FD platforms to reap the benefits listed below.<ul class="list-node" id="cyrn5nnnh"><li>Boost lending potential:&nbsp;Financial institutions can leverage online FDs to increase the aggregate deposit value, which will in turn boost lending opportunities.</li><li>Access to New to Bank (NTB) customer base:&nbsp;Digital FDs offer new-age banks and NBFCs an efficient channel to onboard investors who do not have an existing bank account. NTB consumers can be incentivized with higher interest on deposits as compared to existing banks.</li><li>Target new investor segment:&nbsp;Online FDs help Financial Institutions (FIs) target new consumer bases by leveraging diverse fintech platforms. For example, they can target wealthtech for investment and tech-savvy consumers, and digital banking/payment apps for zoomers and the millennials.</li><li>Enhance customer experience:&nbsp;Digital FD platform offers instant hassle-free <a class="link" href="https://m2pfintech.com/blog/know-your-customer-kyc-the-need-for-authentication/">KYC processing</a>, onboarding, settlement, and digital service request. It ensures personalized and enhanced customer experience and journey.</li></ul><h2 class="heading-node" id="18d7">Challenges in digital FD deployment</h2>Several FIs have already launched online FDs and upcoming players are looking to launch digitized deposit platforms. One commonality between them is the quantum of challenge they face during deployment and implementation. Here is a quick glimpse into the key challenges FIs face in digital FD deployment.<ul class="list-node" id="crdnokb5f"><li>Time to market-&nbsp;Launching FD solutions with end-to-end integrations and data security on 3rd party platforms is a time-consuming process. This delays the time taken for banks and NBFCs to go to market with digital fixed deposit plans.</li><li>Unavailability of integration-friendly standard APIs-&nbsp;Bank and 3rd party integrations are critical for online FDs. To aid seamless operation, implementation and support, ready-to-integrate <a class="link" href="https://m2pfintech.com/blog/the-world-of-apis-how-they-power-fintech/">APIs</a> are imperative.</li><li>File-based batch files-&nbsp;Traditional banks have file-based batch files for handling service request changes. This makes API-based fintech integrations more challenging.</li></ul>So, how can FIs overcome the challenges listed above?Simple. Banks and NBFCs need to partner with digital FD solution providers for ready-to-use, end-to-end APIs that enable incredible go-to-market speed. Within a few weeks, the deposit product will hit the market and the FIs can enjoy the benefits listed below.<ul class="list-node" id="hovgz5sfj"><li>Seamless &amp; uniform API driven integrations</li><li>Scalable platform supporting multiple FIs</li><li>End-to-end functionalities and customer journey</li><li>Customized fixed and recurring deposits issuance</li><li>End-to-end digitized processes for KYC, account creation, account changes, maturity pay-out, account closure, and FD renewal</li><li>Proactive compliance and security infrastructure</li><li>Support for service requests (FD closure, account details changes, FD renewal, bank account changes) from both API-based as well as file-based integrations</li></ul><a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a> to our newsletter and get the latest fintech news, views, and insights, directly to your inbox.&nbsp;Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a> for more insightful fintech tales curated for curious minds like you.

How can banks and NBFCs leverage the potential of digital FDs?

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/Artboard-1-copy-8-12.webp" alt="M2P Fintech" title="" width="100%" height="253">Three years into the pandemic, amidst the Omicron wave, the Indian Union Budget 2022 promises resiliency, growth momentum, and long-term sustainability measures. At a 9.2% GDP, India projected the highest growth rate among world economies. Great stat to start the budget highlights with right?<h2 class="heading-node" id="b7ef" style="text-align: left">Digital Focus</h2>The key focus areas of the budget were&nbsp;digital and technology for the next 25 years.&nbsp;The Finance Minister’s budget speech promoted digital and technological innovation across industries. It offered a sharp increase in public investment and capital expenditure provision that is expected to aid future growth and help businesses recover from the pandemic-induced slump.Initiatives focused on ‘accelerated growth’ for technology-led development, energy transition, and climate action while balancing the needs of an inclusive welfare society.<h2 class="heading-node" id="857d" style="text-align: left"><a class="link" href="https://m2pfintech.com/blog/fintech-101-discover-the-3ws-of-fintech/">Fintech</a> Impetus</h2>For the financial services industry, this budget promises greater investments, is fintech-friendly and <a class="link" href="https://m2pfintech.com/blog/fintech-a-catalyst-for-financial-inclusion/">pro-financial inclusion.</a>Honoring India’s 75th year of independence, the Finance Minister announced the establishment of 75 Digital Banking Units (DBUs) across 75 districts in India. This move is expected to extend <a class="link" href="https://m2pfintech.com/blog/fintech-a-catalyst-for-financial-inclusion/">financial inclusion</a> and fintech services to remote areas.Initiatives are also underway to make the <a class="link" href="https://m2pfintech.com/blog/ready-to-sneak-peek-into-global-cashless-societies/">cashless payments ecosystem</a> safe and seamless for consumers and businesses by enlarging digital infrastructure, boosting internet access, expanding touchpoints, and enhancing cybersecurity. The Finance Minister also stated that financial support for the digital payment ecosystem announced in the 2021–22 budget would continue in 2022–23.<h2 class="heading-node" id="3689" style="text-align: left">Other Highlights</h2>Budgetary Allocation<ul class="list-node" id="dss3o91dh"><li>6.4% fiscal deficit is projected for India in FY23</li><li>Revised fiscal deficit estimated at 6.9% of GDP</li><li>Rs 1 lakh crore as 50-year interest-free loans allocated to states to help fund PM Gati Shakti-related investments</li><li>Rs 10.68 lakh crore effective capital expenditure is expected in 2022–23, which is about 4.1% of GDP</li><li>35.4% rise in outlay for capital expenditure is estimated — from Rs 4.54 lakh crore earlier to Rs 7.50 lakh crore in 2022–23</li></ul>Venture Capital Investment<ul class="list-node" id="8tce85bkj"><li>Regulatory framework for Venture Capital to be reviewed by an expert committee</li></ul><a class="link" href="https://m2pfintech.com/blog/central-bank-digital-currency-cbdc-101-a-primer/">Digital Currency on Blockchain</a><ul class="list-node" id="zmbivw63m"><li>Reserve Bank of India (RBI) to introduce the digital rupee using blockchain in 2022–23</li></ul>Digital Banking<ul class="list-node" id="gygmtbnsd"><li>Launch of online bill system to reduce delays in payment for all central ministries</li><li>Credit growth increased by Rs 5.4 lakh crore this year, the highest in several years</li></ul>Crypto Tax<ul class="list-node" id="602bt55yq"><li>Cryptocurrencies and NFT will be taxed at 30%</li></ul>So, what do you think of the budget? Let us know in the comments below.<a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox.Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

Key Highlights: What does Budget 2022 mean for Fintechs?

Ready to Sneak Peek into Global Cashless Societies

50 Popular Fintech Terms You Must Know

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/Artboard-1-copy-8-3.webp" alt="M2P Fintech" title="" width="100%" height="358">As technological advancements promote growth in our country, lack of financial literacy still prevails. In a recent incident, a farmer has reportedly lost his savings worth two lakhs to rats. He stored his money as cash in his house. The farmer wouldn’t have lost his savings if he was aware of a financial institution. The eradication of financial illiteracy and improving maximum financial inclusion help us overcome such situations.<h2 class="heading-node" id="45b6" style="text-align: justify">What is Financial Inclusion?</h2>Financial inclusion aims to offer primary financial products and services to all individuals and businesses and makes these services more accessible and affordable.Financial institutions aim to offer basic services that include payments, transactions, savings, credit, and insurance sustainably to drive more financial inclusion. New technological innovations in fintech have caused organizations to offer cost-effective services to their customers.<h2 class="heading-node" id="fb52" style="text-align: justify">Measures to improve Financial Inclusion</h2>The Reserve Bank of India started taking measures in 2005 to improve financial inclusion in our country. The government initiated the National Mission for Financial Inclusion (NMFI), including Pradhan Mantri Jan Dhan Yojana (PMJDY), which provides services to unserved areas.Furthermore, the “Digital India” initiative, which provides accessible digital banking services with simplified formal verifications using unique identification (Aadhaar), is also a bold move towards improving financial inclusion in the country.<h2 class="heading-node" id="6804" style="text-align: justify">Fintechs boosting Financial Inclusion</h2>Indian fintechs are the biggest drivers of achieving financial inclusion, with an adoption rate of over 87%. In the recent decade, fintechs have widened operations to provide personalized services without opting for the traditional route. Also, the rise of the popularity of smartphones around the globe led to the establishment of new financial services. “As of February 2021, there is a record of 2.3 billion digital payment transactions made worth over 4 trillion rupees.” From Demonetization in India to the Covid-19 outbreak, people are now more interested in using financial services such as digital payments, lending solutions, etc. Digital financial services help many small and medium-income businesses to offer cashless payments option to their customers.<blockquote class="block-node" id="wp01kwej7">According to an annual report for FY 2020–2021 by RBI, the volume of digital payments is at 453 crores in India.</blockquote>With increasing ideas and innovations, fintechs ensure more inclusion. With the growth in the industry, a wide range of products and services are set to enter the market to offer customized services. Products such as<a class="link" href="https://m2pfintech.com/blog/the-rise-of-digital-payments/"> digital payments</a>, digital credit, <a class="link" href="https://m2pfintech.com/blog/neo-banking-101-all-you-need-to-know/">neo banking</a>, <a class="link" href="https://m2pfintech.com/blog/api-the-power-that-drives-new-age-banking-ecosystems/">API banking</a>, <a class="link" href="https://m2pfintech.com/blog/prepaid-cards-101-a-definitive-guide-for-growth-and-profitability/">prepaid cards,</a> etc., have established effective financial inclusion.<h2 class="heading-node" id="acff" style="text-align: justify">What challenges do we face?</h2><ul class="list-node" id="30k5oemaa"><li>The excluded sections, such as rural, poor areas, often don’t have access to a financial institution and often approach moneylenders.</li><li>A constant need to improve financial literacy as many rural people have less or no awareness of financial institutions.</li><li>Lack of formal identification documents is also a significant challenge when people reach out to a financial service. Poor sections lack access to financial services, as they lack various documents such as proof of identification, birth certificate, etc.,</li><li>Even though people&nbsp;have a financial account, most users still prefer cash. Lack of trust and reliability prevents a customer from accessing the available financial services.</li><li>Gender inequality to access financial services as women pay higher interest rates than men.</li><li>Low-income levels indulge in a myth that financial institutions only offer services to high and middle-income groups.</li><li>Some people are uncomfortable due to language barriers, formal documents, and the formalities that we go through before a financial transaction occurs.</li></ul><h2 class="heading-node" id="e955" style="text-align: justify">Overcoming the Challenges</h2>To alleviate the challenges faced by consumers, there arose a need to innovate new and simplified products. New technologies, fintech innovations, and the digital finance revolution have now become the constant drivers of financial inclusion. There is a constant growth in the sections of digital finance over traditional finance methods.<blockquote class="block-node" id="zr04eywdz">Digital Financial Inclusion ensures that the excluded and unserved population has digital access to financial services.</blockquote>Digital services focus on affordability, customer satisfaction, and sustainability. New digital platforms run by the institutions now accommodate small levels of cash flow. These services allow the low sections to make transactions, thus preventing the use of informal services. Understanding the potential and risks such as operational risks, financial crime risks, etc., while improving digital services can contribute to the growth of digital financial inclusion. Similarly, technological innovations have increased financial inclusion. These innovations aim to regain customers’ trust, rectify geographic and accessibility issues to bring in new consumers. Information technology, smartphone-enabled services have reduced the need for physical banks. With technological development, we can develop a rural information infrastructure that provides financial services to the underserved. Fintechs have also played a significant developmental role in achieving greater financial inclusion. Fintechs acts as a catalyst for financial inclusion as it creates more opportunities for the unbanked population. The shift of digital transactions from traditional transactions has improved self-employment, rural entrepreneurs, small borrowers, mediums, and enterprises. Lack of financial awareness, high cost of traditional services, and other policy gaps were significant challenges while achieving financial inclusion. Fintech startups play a critical role in overcoming these challenges in the economic landscape. The tremendous growth in fintech has shown a positive shift as a report shows that 99.5% of consumers are now aware that they can transfer money and make payments with fintech platforms.<h2 class="heading-node" id="b97f" style="text-align: justify">Fintech products driving inclusion</h2> New fintech products have helped consistently in driving the financial inclusion of the country. As discussed earlier, these products allow the work of financial services and offer a streamlined process. These fintech products applied to reality are the main drivers of financial inclusion.<h3 class="heading-node" id="e38e" style="text-align: justify">Embedded Credit</h3><a class="link" href="https://m2pfintech.com/blog/beginners-guide-to-embedded-lending/">Embedded credit</a> focuses upon integrating ‘lending as a feature’ in digital platforms. Customers receive their credit with the involvement of a familiar interface and eradicate the need for a third-party site. Micro, small and medium enterprises (MSMEs) face difficulty offering small credits, increasing demand here. The B2B e-commerce marketplaces provide the ultimate <a class="link" href="https://m2pfintech.com/blog/factors-and-psychology-behind-the-great-bnpl-allure/">BNPL (Buy Now, Pay Later)</a> option for the retailers while they checkout. BNPL offers these MSMEs to purchase on credit and pay later. BNPL is one of the fast-growing payment options which also helps MSMEs to expand their business. The BNPL would account for 3% of the global e-commerce spend by 2023. Thus, this system provides a convenient platform for consumers to experience new market products.<h3 class="heading-node" id="f250" style="text-align: justify">Digital Payments</h3><a class="link" href="https://m2pfintech.com/blog/the-rise-of-digital-payments/">Digital payments</a> (also called electronic payments) are the method we transfer one point value from one account to another using a digital device. Digital payments are end-to-end digital transactions, and also, they don’t require the usage of physical cards, thus reducing costs.For example, the latest introduction of <a class="link" href="https://m2pfintech.com/blog/e-rupi-indias-digital-upgrade-for-the-underbanked/">e-RUPI</a> which is a digital payment solution created by the Government of India to allow cashless payments. e-RUPI is powered by the National Payments Corporation of India (NPCI), and the one-time payment mechanism is easy, highly secure, and entirely confidential. The distributions are also made easy, safe, and contactless.<h3 class="heading-node" id="7d7d" style="text-align: justify">Neobanking</h3>Neobanking is an innovative method of approach in which financial institutions offer services without physical presence. <a class="link" href="https://m2pfintech.com/blog/top-14-neo-banks-that-reinvent-banking-experience-in-india/">Neo banks in India</a> operate on a low-cost model with minimal to zero monthly fees on deposits and withdrawals, and rock-bottom balance requirements. These drivers bring consumers and businesses across income levels into the fintech fold, fostering financial inclusion. Neo banking is highly famous among the millennials and Gen Z as they no longer use outdated processes. Neo banks use Artificial intelligence and machine learning to create a customer-centric Banking experience, with the aim to reduce human dependence.&nbsp;Neo banks provide millennials and Gen Z their own customized product set, making the process fuss-free. Millennials and Gen Z prefer simplified and easy- manageable finances, thus proving neo banks are a blessing in disguise.<a class="link" href="https://m2pfintech.com/blog/7-steps-to-start-a-neo-bank-from-scratch/"> Curious to know how you can start a neo bank? Check out these 7 steps.&nbsp;</a><h3 class="heading-node" id="3aa0" style="text-align: justify">API Banking</h3><a class="link" href="https://m2pfintech.com/blog/api-the-power-that-drives-new-age-banking-ecosystems/">API Banking</a> provides better means to share data, helps in integrating systems, and makes services more personalized. In API banking, tailor-made products improve the overall customer experience.With the help of API banking, new fintech innovated products offer features and services aligned to provide flexible services. Innovations in API banking have reduced costs and now made it economical for the unbanked and underserved as they can now experience better products and services.<h3 class="heading-node" id="921d" style="text-align: justify">Open Banking</h3>To offer better services, open banking offers third-party financial service providers access to financial data with the help of APIs. <a class="link" href="https://m2pfintech.com/blog/open-banking-a-primer-2/">Open banking</a> is highly prevalent in Europe. Open banks help achieve more financial inclusion as it allows small, medium businesses access particular tools and services that target the needs of their consumers. Innovations in open banking and the experimentation of products can foster higher financial inclusion in the long run.<h3 class="heading-node" id="9d8d" style="text-align: justify">Prepaid Cards</h3><a class="link" href="https://m2pfintech.com/blog/prepaid-cards-101-a-definitive-guide-for-growth-and-profitability/">Prepaid cards</a> help us process payments quickly as we have better cash flow management, easy reimbursements, and more security than cash or cheques. They are a super alternative to carrying cash around. They are available as gift cards, meal cards, and also as travel cards. Prepaid cards are a great way to control business expenses, improve efficiencies and generate revenue streams.&nbsp; However, the time, cost and effort involved in card issuance in-house are huge.The best way to manage card issuance is by <a class="link" href="https://m2pfintech.com/blog/why-should-apis-be-your-holy-grail-for-prepaid-card-issuance/">deploying the right APIs.</a><h3 class="heading-node" id="ee0a" style="text-align: justify">Mobile Wallets</h3><a class="link" href="https://m2pfintech.com/blog/how-to-implement-the-best-prepaid-payment-instrument-ppi-for-your-business/">Mobile wallets</a> are famous and convenient due to their accessibility. Transactions are made easy as we can send, receive and store money easily with the help of our smartphones. In reality, right from a vegetable vendor to corporate and digital firms, every one of us can easily transact if we have a mobile wallet.Mobile wallets ensure that every person can participate in a financial transaction with its cashless and contactless technologies. The whole process boosts the economy while achieving more financial inclusion.The future ideas of the fintech industry will result in product innovations while improving existing ones, thereby offering more affordable and accessible services to both the unbanked and underbanked. Furthermore, the coupling of fintech and financial institutions will help eradicate financial illiteracy and promote financial inclusion. With the acceleration of fintech and its budding ideas, the future of financial inclusion is bright and holds many opportunities that come with new beginnings.Need more info on how fintech can help you? Write to us at <a class="link au mg" href="mailto:business@m2pfintech.com" target="_blank" rel="noopener ugc nofollow">business@m2pfintech.com</a>.<a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox. Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

Fintech- A Catalyst for Financial Inclusion

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/04/banner1251-8.webp" alt="M2P Fintech" title="" id="rvrudoanq" width="100%" height="317">India has the highest Fintech adoption rate of 87%, significantly higher than the global average rate of 64%.India is rapidly evolving and is one of the fastest-growing Fintech markets globally and has also emerged as Asia’s biggest destination for Fintech deals, leaving behind China. Advanced technologies and a customer-centric approach are what bring this thriving industry its profound growth in this decade.Having witnessed this flourishing industry and its achievements, let’s look back on its evolution rather a revolution. So, gear up as this article throws light on how the fintech industry has steadily evolved over the years.<h2 class="heading-node" id="5995" style="text-align: left">The fintech landscape in India</h2>Ever since the start of modern society, finance and technology were entwined robustly. The beginning of the Fintech industry globally is traced back to the 19th century when technology started to mark its place in history, which made the fintech industry flourish.According to a research paper by Arneris, Barberis &amp; Ross, the significant stages of fintech are differentiated into the following eras, which will help us understand the steady fintech evolution better.<h2 class="heading-node" id="ab20" style="text-align: left">Fintech 1.0</h2>Outmoded technologies like the telegraph and Morse code were first used to transmit financial information across borders to strengthen the infrastructure rapidly. Then, later during the 1950s, the credit card was first introduced and was the first financial product in the industry, and to everyone’s surprise, it is still in the game.In India, many British Raj banks were nationalized post-independence, when the country’s economic growth started to shoot up, and banking services were availed by many citizens.<h2 class="heading-node" id="aff2" style="text-align: left">Fintech 2.0</h2>This era has marked the switch from analog to the digitalization of finances led by traditional financial institutions. People perceived finance management and financial institutions differently after the outbreak of the internet. The 1980s and 1990s were the high point in history when online banking pushed the fintech industry to the limelight with electronic installment framework, web-based business models, web-based shopping, portable banking, and digitization of banks.The banks started to experiment with online banking in the 1980s, got the hang of it by the 1990s, and made it even more popular. In India, ICICI Bank was the first to step into this internet banking space with limited banking services like access to account details and transfers within the bank. Other banks also started to follow the path and rapidly altered the way of banking. It is no wonder banks had faced challenges like technical mishaps, fraud, complex cross-border transactions, payment methods, etc.Fintech 2.0 gave the fintech industry’s modernistic look, and the below listed important events triggered the rise of fintech in India.<ul class="list-node" id="ef0j04wu4"><li>The first Indian ATM to withdraw cash was launched in 1987, Mumbai by HSBC.</li><li>In 1980, the Central Bank of India launched the first credit card in India.</li><li>Stanford Federal Credit Union was the first institution to let its customers access banking functions via the new World Wide Web in October 1994.</li><li>PayPal launched in 1998, which took the payment systems further after the internet boom.</li><li>The Global Financial Crisis in 2008.</li></ul><h2 class="heading-node" id="2020" style="text-align: left">Fintech 3.0 — The rise of Indian Fintechverse</h2>By the time the 21st century rolled around, India had emerged as one of the active players in this era with a plethora of smart advancements and entrants. Moreover, the Global Financial Crisis in 2008 paved the way for the fintech industry to gain traction and become ubiquitous. People started to shift from the traditional banking system slowly and developed trust over the new entrants.The release of Bitcoin v0.1 in 2009, Google Wallet in 2011, Apple pay in 2014 was the start that shaped the face of the fintech industry in India. Since India focused on customer-centric financial products and services, it has seen more rise in few years. The 2016 demonetization drive pulled in a lot of significance for the fintech. The Indian government’s move towards Digital India and to turn India into a cashless economy with financial inclusion also hands out immense support to fintech companies.Ever since the traditional banks were struggling to roll out their banking services integrated with the SWIFT system, fintech start-ups started to share the industry space through collaboration. SWIFT system’s initiative like SWIFT GPI provides end-to-end tracking with high security for the transactions. The Indian financial sector opened the door wide open for fintech to offer innovative and cost-efficient financial solutions.The rapid adoption of fintech had many Indian firms establish like Paytm, Phonepe, Mobikwik, Freecharge in few years. This made sure smartphone adoption is here to stay and will become the primary method for people to handle their money wisely.The span of around five years led to more than 2000 fintech companies in India at present and became the era of fintech start-ups. This made even the traditional banks rethink their strategies and welcome more fintech inclusion in their services to get hold of present-day tech-savvy customers. Open Banking, Banking as a Service (BaaS) were adopted by traditional banks that allow third-party service providers to access their financial data. BaaS further fuelled the entry of neo banks and digital banks in India.Fintech applications like mobile payments, automated investment apps (Robo-advisors), online lending businesses, and crowdfunding platforms have taken the financial industry by storm.The following technologies contribute oodles of success to the fintech ecosystem:<ul class="list-node" id="852pkzxgr"><li>Artificial Intelligence (AI)</li><li>Machine Learning (ML)</li><li>Big Data and Data Analytics</li><li>Robotic Process Automation (RPA)</li></ul><h2 class="heading-node" id="4ca4" style="text-align: left">Factors that led to India’s immense Fintech growth</h2>The quick adoption of new solutions and financial services made India, a country with the highest fintech usage. The factors which drive India’s fintech growth to the next level are listed below.<h3 class="heading-node" id="0376" style="text-align: left">Painless payments</h3>Easy digital payment is the key player in the fintech ecosystem, gaining trust and pulling many users in. Since its beginning, the merchants and shoppers have enjoyed this and made it even popular during the coronavirus outbreak. People were concerned about making a physical payment for safety reasons and quickly adapted to these digital payment modes in a jiffy. The demonetization drive in 2016 made every Indian switch to digital payments and online transactions, which was a green flag for fintech entrants at that time. People now make their digital cash flow without any second thoughts as they feel secure and safe more than handling physical cash.<h3 class="heading-node" id="b2cf" style="text-align: left">Payment wallets &amp; UPI apps</h3>This is one of the services which transformed the way people carry cash. Multiple digital payment apps like Google Pay, Apple Pay, Amazon Pay, PhonePe, etc., are definitely a booster for ‘Cashless India’. Features like easy transaction, secure, fast, multiple options benefit these payment wallets to make waves in the Indian fintech industry. Moreover, Artificial Intelligence (AI) and Big Data help users personalize their payments and store multiple bank accounts in a single digital wallet.<h3 class="heading-node" id="2917" style="text-align: left">Digital lending &amp; insurance</h3>Fintech is the cherry on the cake when it comes to market-based lending. When already banks were doing their great job in lending and insurance, fintech collaborated to make it even more feasible by giving enormous options, online availability, customer-centric loans, and speedy approval for businesses and customers.<h3 class="heading-node" id="b7e3" style="text-align: left">Wise finance management</h3>After the fintech boom, people witnessed many changes in the way they handle their finances. As every Indian has started managing finances digitally, it is easy to keep track of their expenses and make a calculative move. Robo-guides or Robo- advisors also help in wise finance management by providing automated, algorithm-driven financial planning services.<h3 class="heading-node" id="d8c7" style="text-align: left">Remittances</h3>Fintech's eases the way banks were making international transfers for decades. The remittance was considered an arduous task in the past, involving high fees, tons of paperwork, no tracking of money, multiple players, and a great deal of time. But now, fintech defines it as a flexible real-time payment with transparent fees, end-to-end payment tracking, multi-currency payments, and so on.Definitely a worthy throwback on this Independence Day 2021?This nostalgic look back at India’s Fintech evolution promises what the busy future holds for the country. The finance industry will flourish, but it demands a little more wait to reveal further episodes. So, let us wait to witness India evolve more and better in the future.<a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox.Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

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