<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/04/banner1251-2.webp" alt="M2P Fintech" title="" width="100%" height="447">Blockchain is crossing its chasm and it might be stumbling its way towards knocking on the doors of many other industries. Still, the scope of its application and ideas challenges the present technologies in the field. This technology, still young and fresh, continually offers its beneficiaries data transparency, security, and quicker transactions.Awaiting to join hands with fintech <a class="link" href="https://m2pfintech.com/blog/the-world-of-apis-how-they-power-fintech/">APIs</a> blockchain promises, to accelerate numerous applications to the front row. Unfortunately, the innovators and investors are not on the same page yet on bringing the dreams of <a class="link" href="https://m2pfintech.com/blog/fintech-a-catalyst-for-financial-inclusion/">fintech</a> operations into practice.Still, one cannot overlook the potential of blockchain technology because bitcoin efficacy is proved through the decentralized protocol algorithm of Blockchain.The use cases of Blockchain in Fintech are discussed below along with the deterrents of the operational practices too.<h2 class="heading-node" id="ea1b" style="text-align: justify">What is Blockchain?</h2>Blockchain is a database: digital, decentralized database. A series of blocks containing transaction data, a hash identity, and node details are connected to form a chain. They are linked to their previous block with immutable characteristics. It also facilitates the process of recording, managing, and tracking assets. Assets can be tangible and intangible, and virtually anything of value can be traded on a blockchain network. It reduces risk and costs for all the parties involved.The reason why Blockchain is now on an accelerated trend is that it is fast. As a business runs on information, the quicker it is received. The more accurate the information is, the faster the business reaps results. The security aspect of Blockchain is well coveted as it can be accessed by individuals who have the key. It offers a single view where even a single modification will be known to all the members.<h2 class="heading-node" id="3ca3" style="text-align: justify">How does Blockchain work?</h2>Blockchain records validate and store the data in its database. So, it has the privilege to validate a transaction. However, it does not simply hold the data but also every nuance that happened in the transaction.<ol class="list-node" id="khl9t5q91"><li>User requests for a transaction of any type involved with or without contracts, cryptocurrency, information, or any other records.</li><li>Now the requested information is sent to various nodes of the P2P network (the people involved in the transaction) for validation.</li><li>The validation of the nodes and the user status is recorded and updated by the algorithms.</li><li>Once the transaction is complete, a new block is added with the recorded data to the previous block .</li></ol>Each block contains the following information<ul class="list-node" id="30nibfo2u"><li>A Hash pointer (link to the previous block)</li><li>A timestamp</li><li>Transaction data</li></ul><img src="https://miro.medium.com/max/1400/1*ymase2KIJyghd5SKYaPm2Q.png" alt="M2P Fintech" title="" width="100%" height="358"><h2 class="heading-node" id="a369" style="text-align: justify">What gives Blockchain its power?</h2>Blockchain destroys cybercrime attacks with its decentralized ledger. The conventional centralized ledger in <a class="link" href="https://m2pfintech.com/blog/fintech-a-catalyst-for-financial-inclusion/">Fintech</a> opens pathways to fraudulent activities despite its easy access — vulnerable to&nbsp;cybercrimes. In the case of the Blockchain, the distributed P2P network allows more than one node (device) to validate, authenticate and approve transactions.Moreover, the nodes cannot alter any transaction data without their peer nodes.A decentralized ledger is the core concept of Blockchain technology that makes it completely superior. This operational protocol helps holds numerous features such as embezzlement in check.Blockchain characteristics are flexible enough to bend at few places and remain immutable at other occurrences. Moreover, it comes with complete security compliance, avoids fraud, and is scalable with any form of transaction.Reliability: It removes the double records because it certifies and identifies the transaction of each party.Unchangeable transactions: You cannot edit or remove the transactions but only add. The chronological ordering stores each block with a timestamp.Reduces Frauds: The P2P network validates the transaction request and reduces the chance of embezzlement.Collaboration: Removes the third party from the transaction. The dream of digital banks, neo banks complying with all the strict regulations is possible with blockchain technology.Transparency: Transaction details are public to everyone, including changes (parties involved in the transaction). It solves the credibility and trust challenges of Fintech.<h2 class="heading-node" id="5838" style="text-align: justify">How Blockchain is transforming Fintech?</h2>Blockchain is silently proving its invincibility in the fintech industry. However, underpinning Blockchain is to the transformative growth of Fintech; it is abstained by a large crowd due to operational reality.Ripple connect and Ethereum has found their ways into early adopters door but could not cross the chasm cycle yet. Effectively, the technology contributes to reliable finance systems through robust algorithms: distributed technology in record keeping and transactions with the decentralized protocol eliminating thousands of paperwork.The infant technology is fruitful for Fintech, especially in shaping retail banking services.<ol class="list-node" id="hehe9ly9f"><li>RTP solutions: Sending money will only take a matter of minutes. Implementing RTP has been risky with the traditional banking process, but Blockchain accelerates the implementation process. As a result, irrespective of any app used for money transfer, transactions will happen securely.</li><li><a class="link" href="https://m2pfintech.com/blog/cross-border-payments-a-swift-money-flow-across-borders/">Cross-border Payments:</a>&nbsp;While setting up to collect or fund transfer across other countries, the limitations make the process slow, tiresome and challenging. With Blockchain, the restrictions can be melted. In addition, it is an entirely internet-based operation which removes the need for an additional setup cost.</li><li>Smart Contracts &amp; Recurring Payments:&nbsp;For SaaS &amp; B2B industries, smart contracts will help secure credible transactions that can be released based on a completed action, event, or conditions. It is useful when the goods are delivered, and the funds are released in the logistics.</li></ol><h2 class="heading-node" id="3afc" style="text-align: justify">Blockchain use case scenario in RTP solutions &amp; cross-border payments</h2>From 2017, there are speculations of the use of Blockchain in the fintech field, as of now, no direct confirmation apart from Ripple and Ethereum using their Blockchain in real-time settlements and <a class="link" href="https://m2pfintech.com/blog/cross-border-payments-a-swift-money-flow-across-borders/">cross-border payments</a> — a real challenge in retail banking.RTP &amp; <a class="link" href="https://m2pfintech.com/blog/forex-cards-international-travel-made-effortless/">international payment</a> processing solutions are slow because of the conjecture of the third parties in stock markets, healthcare, and cryptocurrency. However, blockchain usage can lift the barrier in a few cases if the compliance has been favorable. Thus, it may not remove the third party entirely but speed up the process.In cross-border and RTP solutions, the payment systems still need a third party till the regulations are changed. But with cryptocurrency, the need for the traditional infrastructure banking setup can be overridden. First, the currency of the payer can be converted to bitcoin or any other fiat currencies. Then the payment can be approved by the distributed electronic ledger protocol.Then the receiver will get the settlement in the original currency. It involves an additional step of converting the currency to crypto and then back to the original format. Of course, it increases a few complications. Still, given the present tech innovations in the market, this is an easy pie.A group of consortium banks in Japan is currently running on this tech innovation method to collect international and RTP domestic payments.<h2 class="heading-node" id="0b95" style="text-align: justify">Fintech Blockchain Use cases</h2><h3 class="heading-node" id="c07b" style="text-align: justify">Smart contracts</h3>An exciting branch of Blockchain is the smart contract. The capability of smart contracts is transformative enough to disrupt the automation process in the future. Adding a bit of AI or edge intelligence, smart contracts will be more intelligent: they can trigger AI decisions.In 2016, financial consortium R3 and its member banks completed trade finance prototypes that used smart contracts to process factoring transactions and letters of credit. Smart contracts have high leverage on places where escrow is high. When a synchronized chain of actions happens upon if/ else statements drawn by both parties, it is a win-win situation.<h3 class="heading-node" id="6c71" style="text-align: justify">KYC</h3><a class="link" href="https://m2pfintech.com/blog/know-your-customer-kyc-the-need-for-authentication/">Know Your Customer</a> (KYC) is a regulation now, and it is mandatory for consumers to enjoy frictionless payment advancements. But <a class="link" href="https://m2pfintech.com/blog/crack-the-kyc-jigsaw-ease-onboarding-compliance/">overcoming KYC challenges</a>, and establishing the identity of the customer without barging into their privacy is complex. The transparency of Blockchain enables identity verification without disclosing the true identity. It sounds like beating around the bush, but the protocol allows to establish, verify and transact based on digital identities of all the counterfeits.<h3 class="heading-node" id="d839" style="text-align: justify">Escrow — freelance</h3>Freelance opportunities are booming everywhere, thanks to COVID; however, the escrow is high. For a platform like Upwork, satisfying both sides is a requirement without any compromise. The best way to solve these problems is through smart contracts. Transferring the deliverables based on effective agreed rules from both parties can enable a seamless functioning of the whole platform.<h3 class="heading-node" id="d2b7" style="text-align: justify">Recurring Payments</h3>In B2B, the payments usually take 3–4 days to complete, which is quite annoying nowadays. The middlemen in the process are co-dependent with the paperwork, which delays the sales cycle even further. Intelligent contracts can plunge in with the idea of its transparent agreement terms, making recurring payments every month or year easy. The contract triggers the next step of the action only if both the parties are convinced, so it gives complete control to the buyer and the sellerBlockchain is waiting for its massive scaling, and 2021 is the year for its spark plug. The industry is quite busy solving its problems with operational constraints. Yet, we have pretty a trend waiting to breach in soon, at least into the payment ecosystems under the fintech radar.To know more about blockchain, write to us at business@m2pfintech.com.<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.

Blockchain and Fintech-Use cases and Applications

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/05/Artboard-1-copy-8-2-2.webp" alt="M2P Fintech" title="" width="100%" height="529">Cybercrime is quickly evolving into an escalating issue across the physical and virtual universe. More than 80% of online businesses have reported an increase in cyberattacks since 2020.The digitization of finance has further widened avenues for hackers to create loopholes in financial infrastructure with sophisticated tools and techniques. Wherever there is a software application or a network involved, cybercriminals infiltrate the system to steal sensitive personal information and financial credentials. Vulnerable financial applications don’t stand a chance before the mushrooming attacks and give way to compromised data, loss of money, identity theft, and data breaches.<h2 class="heading-node" id="d923" style="text-align: justify">Nipping vulnerabilities in the bud</h2>As responsible facilitators of digital banking, payments, and lending services, fintech companies take cybersecurity very seriously. According to the Sixth Annual Bank Survey, more than 70% of fintechs vow to treat information security as their top concern in 2022. They adopt technologies, tools, and even philosophies that will help them nip vulnerabilities right in the bud.<h2 class="heading-node" id="d555" style="text-align: justify">Transition to DevSecOps</h2>Standing at the forefront of technological innovation, fintechs need to deliver secure deployments, application releases, and updates at supersonic speed. But as with every new-age technology, fintech <a class="link" href="https://m2pfintech.com/blog/the-world-of-apis-how-they-power-fintech/">APIs</a> are prone to security risks. These risks reduce go-to-market speed, delay update releases and impair code quality.Even though standard practices such as DevOps delivers tremendous deployment velocity with zero downtime, cloud readiness, robust security, and compliance management, it still fails to address security risks at the grass-root level. That’s why financial software developers mandate the need to integrate security into the DevOps process. They began transitioning towards the DevSecOps to build secure and efficient applications at top speed.DevSecOps quickly evolved as the future of financial software development, as it made cybersecurity a fundamental part of the production pipeline, which comprises architecture design, coding, and testing phases. Today, it is a crucial application development methodology for successfully developing fintech applications in regulated and unregulated domains.<h2 class="heading-node" id="dbbb" style="text-align: justify">What is DevSecOps?</h2>DevSecOps, a blend of development, security, and operations, refers to the adoption of security right at the beginning of the software development lifecycle (SDLC). It is more a philosophy than a tech approach that calls for increased collaboration between development, security, and operation teams.<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/05/DevSecOps-blog-banner-02.webp" alt="M2P Fintech" title="" id="hasokqmme" width="100%" height="529">It resonates deeply with the view of Cloud Security Alliance (CSA) which goes, “Security can be achieved only when it has been designed in. Applying security measures as an afterthought is a recipe for disaster.”This is exactly what DevSecOps solves for.<h2 class="heading-node" id="1b91" style="text-align: justify">Why DevSecOps?</h2>During the days of DevOps, security was included late in the lifecycle only after the development and operation phase. Technological advancements in cloud platforms, microservices, and containers could not move forward, as security turned out to be a major bottleneck. Catching security issues late in the cycle resulted in a lot of rework and late releases. These were some of the reasons why fintech application developers shifted to agile DevSecOps practices for quick and modern application development and deployment.By shifting security left, DevSecOps integrates testing checks between the development and operation functions of every sprint. It integrates security into DevOps by tackling issues within Continuous Integration (CI) and Continuous Delivery (CD) pipelines. In doing so, DevSecOps accelerates software delivery, reduces the duration between code change, production, deployment, and release while reducing security risks.<h2 class="heading-node" id="dbb0" style="text-align: justify">Resolving contentions</h2>The fundamental area of contention between development, security, and operation teams is their change implementation, security monitoring, and stability principles. They become a source of friction that often leads to lags in the software development cycle. DevSecOps serves as an effective tool to resolve this friction by providing a culture that empowers the teams to work in sync.<h2 class="heading-node" id="79ef" style="text-align: justify">Functions of DevSecOps</h2>DevSecOps aims at designing novel solutions that simplify complex processes within the agile framework. It ensures that customers suffer no technical glitches after deployment or release of any update, or application.Encompassing threat modeling and security testing processes in the pipelines saves time, effort, and cost. The automation in security testing helps test for vulnerabilities keeping futuristic risk possibilities in mind. Security reports can be easily generated to identify risk patterns in CI and CD. The continuous feedback process at every phase of development and code integration strengthens rectification and delivery infrastructure.<h2 class="heading-node" id="63bb" style="text-align: justify">4 simple steps to develop a DevSecOps culture</h2>For sustained focus on security and application effectiveness, companies need to build a DevSecOps culture. Developing a ‘Security as Code’ philosophy is a vital step towards creating this culture. It calls for consistent, compliant, and collaborative efforts between development, operations, and security teams.Follow the steps below to make DevSecOps culture a breeze.<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/05/DevSecOps-blog-banner-03-03.webp" alt="M2P Fintech" title="" id="wnvu7jjqw" width="100%" height="529"><ul class="list-node" id="l13bfyfvi"><li>Garner cooperation&nbsp;— Team silos and conflicts are key reasons why DevSecOps tends to fail in most companies. Garner cooperation through knowledge sharing and reward mechanisms that promote continuous improvement.</li><li>Grant authority and autonomy&nbsp;— Nobody likes dictatorships. Authorize your teams to identify and resolve issues on their own. This autonomy will boost their solidarity and collaboration.</li><li>Appoint strong leaders&nbsp;— Groom or bring in leaders who prioritize security. Make security a top-down mandate. This is a crucial step to building a DevSecOps culture.</li><li>Educate and align&nbsp;— Educate team members on the importance of security, and align the learnings towards DevSecOps tasks. Focus on risk training while also briefing security teams about DevOps methodology.</li></ul>The fundamental goal of the exercise is to make cybersecurity an organization-wide priority, with DevSecOps as a crucial tool.<h3 class="heading-node" id="0f3f" style="text-align: justify">Crucial imperative for fintech application development</h3>A common myth is that developing applications with security in mind impedes innovation. But the security left DevSecOps methodology steers innovation in the right direction and saves a lot of time, effort, and cost.If you are in the business of developing fintech applications, then it’s imperative&nbsp;that you deploy DevSecOps tools and processes as an organization-wide philosophy. As forerunners in implementing the DevSecOps philosophy, we deliver pre-built workflows and AI-powered automation capabilities to deliver secured risk-based authentication at every step. We redefine the software development lifecycle process to accelerate software deployment, product quality, and controlled release cycles and processes.Want to know more about how your business can benefit from the DevSecOps process?Ping us at&nbsp;business@m2pfintech.com.<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.

DevSecOps, the future of financial software development

<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?

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/banner-4.webp" alt="M2P Fintech" title="" width="100%" height="253"><h2 class="heading-node" id="2fad" style="text-align: justify">Great news to kickstart the year 2022!</h2>We are delighted to announce that we have raised $56 million in Series C1 funding. The round was led by New York-based global private equity and venture capital firm Insight Partners and MUFG Innovation Partners, a CVC company of Mitsubishi UFJ Financial Group Inc. Existing investors Tiger Global and Better Capital also participated in this round.We have now raised more than $100 million in 2021–22 alone. This round of funding is a shot in the arm that will help us strengthen our technology, widen our offerings, and expand to international markets.Madhusudanan R, our Co-Founder, and CEO adds, “The consequence of COVID-19 has accelerated the shift from in-person to digital consumption. This shift has forced businesses across the globe to move from brick and mortar to digital channels and, in doing so, has created an urgency for businesses to adopt an <a class="link" href="https://m2pfintech.com/blog/api-the-power-that-drives-new-age-banking-ecosystems/">API</a> platform like ours. We see an unprecedented opportunity to meet this need by bringing our leading platform to other fintech markets across Europe, Africa, and Asia while doubling down on key and emerging fintech markets such as the Philippines, Indonesia, and Egypt. We are very glad to get the backing of Insight Partners and looking forward to leveraging their deep understanding of working with fintech entrepreneurs across the globe as we look to expand into new markets. MUFG with assets across Asia will be a key partner in the next phase of our growth.”We thank our bank partners, investors, clients, 500+ fellow fintechs for their constant support and guidance. <a class="link" href="https://m2pfintech.com/">Our agile platform</a> will continue creating and deploying products in the fintech ecosystem while maintaining the core promises of scalability, security, and reliability.A special shoutout to all our followers who have engaged with our content, supported us in cyberspace, and gave us the impetus to learn and grow. Thank you for your patronage.Let’s do great things together!<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.

M2P Fintech raised $56 million in Series C1 Funding!

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/05/Artboard-1-copy-1.webp" alt="M2P Fintech" title="" width="100%" height="1790">Never underestimate what good chai can do to your life!One such stimulating chai conversation ignited the origin of M2P, the brainchild of Madhu, Muthu, and Prabhu.<h2 class="heading-node" id="b82a" style="text-align: justify">Genesis of M2P</h2>The candid chat on the disruptive potential of fintech led our founder trio to envision an inclusive world where every business, bank, and NBFC gets equal access to technology-enabled financial services, irrespective of their size, scale, or locale. Giving entrepreneurial wings to their fintech dream, they founded M2P in 2014.Today M2P specializes in building financial ecosystems that accelerate digital payments, banking, and lending worldwide. With an active presence in the Asia Pacific (APAC), the Middle East, North Africa (MENA), Southeast Asia, and Europe, M2P strives to future-proof fintech transformation while boosting business agility and customer lifetime value.<h2 class="heading-node" id="39f0" style="text-align: justify">Founding Trio</h2><img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/Artboard-1-copy-8-2.webp" alt="M2P Fintech" title="" width="100%" height="529">Madhu, Muthu, and Prabhu possess over a decade of rich experience leading financial and technology innovations in leading global firms. Madhu, a knowledge powerhouse and a passionate chef steered the prepaid and financial inclusion product division for VISA, Citi, and Thomas Cook. Muthu, an avid sportsman, and technologist managed technology delivery for Paypal, Movida, Fujitsu, and Satyam before cofounding M2P. And Prabhu, a deep space tech enthusiast, drove key technology projects at Cognizant, Verizon Data Services, and iGate.<h2 class="heading-node" id="778b" style="text-align: justify">Uphill Climb - YAP</h2>M2P’s initial journeys were fraught with struggles and fallouts. Even though our domain expertise, innovation potential, and technology proficiency were among the best, gaining opportunities by breaking conventions was a major challenge to growth.Pooling in personal savings and resources, the founding team quietly began their bootstrapped journey. They built YAP, the API platform that allowed businesses to quickly create and deploy fintech products by customizing all relevant workflows through plug-and-play solutions.YAP simplified the ability of banks and PPI licensed entities to support back-end products by facilitating technology integration, settlement and operational support. Within a short timeframe, M2P powered neo banking, cross-border payments, card issuance, program management, new-age lending, and investments for several clients.Our robust, secure, and customizable fintech APIs enabled banks, fintech firms, and businesses to go to market at incredible speed with excellent efficacy. M2P’s tech stack has passed numerous regulatory audits and is backed by industry-leading certifications such as PCI DSS ver 3.2.1, ISO 27001:2013, and ISO 22301:2012. We also completed RBI PPI Information Security Audit Compliance as per the RBI Master Direction DPSS.CO.PD. №1164/02.14.006/2017–18 and implemented the “Data Localization” protocol as per Reserve Bank of India (RBI) guidelines.<h2 class="heading-node" id="f2ad" style="text-align: justify">Quantum Leap</h2>The first breakthrough for M2P happened when we launched our first Visa-powered card program in partnership with DCB Bank. Later, we created several marketing programs with Rupay, MasterCard, Visa, Amex, Mercury, and China Union Pay. We also became Visa’s Fintech Fast Track partner across the APAC region and preferred partner for MasterCard globally.By fostering diverse partnerships with 23+ banks, issuers, acquirers, prepaid issuers, emoney license holders, and industry partners across Travel and Forex, Fleet and FasTag, Digital Lenders, Neo-Banking, NBFCs, Gig-Economy players, and traditional bank programs, M2P processed more than $10 billion transactions in 2021. More than 500 engagements and 100 Fintech programs went live in a matter of few years.And our team strength too grew tremendously from 60 in the formative years to over 300 in 2020, and is expected to reach 700 (by March 2022).<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/Artboard-1-copy-11-1.webp" alt="M2P Fintech" title="" id="0gemdejro" width="100%" height="529"><img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/Artboard-1-copy-10-2.webp" alt="M2P Fintech" title="" id="534weeytw" width="100%" height="529"><img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/Artboard-1-copy-9-2.webp" alt="M2P Fintech" title="" id="mkg9f1kdm" width="100%" height="529"><h2 class="heading-node" id="4ed5" style="text-align: justify">Cashless Surge</h2>Post-February 2020, the pandemic triggered a surge in cashless payments. As a result, banks, NBFCs, and businesses needed fintech services and APIs to sustain omnichannel commerce, as economies began encouraging digital touchless payments. This was an excellent opportunity for us to realize our dream of delivering financial inclusion among banks, NBFCs, and other businesses.And, there was no turning back from there. Projects started flooding in, and we needed more capacity strength and funding to bolster the surge.<h2 class="heading-node" id="beae" style="text-align: justify">Funding and Acquisitions</h2>In the beginning, the founding team chose not to be distracted with funding activities. Instead, their strategy was to chisel and scale up the API platform first and then seek funding for overseas expansion. As the India business was and has always been self-sufficient, no external capital infusion was required at that point in time.In early 2020, angel investors such as Amrish Rau, Pine Labs CEO, Jitendra Gupta, Jupiter Money founder, Kunal Shah, CRED founder, Vikram Chachra of 8i Ventures, Peifu Hsieh of Karbon and Abhishant Pant, Founder of The FinTech Meetup pitched in to raise Rs 10 Cr for the team. We used this funding to develop newer technology stacks, boost team strength, and grow in newer markets outside India.In July 2020, series A funding happened, and we raised $4.50 million through venture capital firms Beenext, 8i Ventures Fund, DMI Group, and Better Capital. Angel investors such as Alok Mittal, Indifi Technologies founder, Ashneer Grover, BharatPe founder, Amrish Rau, Pine Labs CEO, and Jitendra Gupta, Jupiter founder, also participated in the Series A funding.In the meantime, M2P grew rapidly and became the fintech enablement partner of choice for SBM Bank. Our partnership grew from strength to strength covering all facets of Retail banking. This model is now being emulated by other large private banks in India.We also acquired companies such as Wizi and Origa, and made strategic investments in firms like LivQuik to strengthen our cards, credit, and payments ecosystem and improve go-to-market speed.In less than a year, we raised another $10 million in Series B funding from Flourish Ventures and Omidyar Network India, Beenext, 8i Ventures, and Better Capital. Now, we have raised another $35 million through Series C funding led by Tiger Global.<h2 class="heading-node" id="a1ac" style="text-align: justify">Future of Fintech, here and now</h2>From the chai conversation in 2014 to funding rounds, global expansions, innovations, partnerships, and acquisitions in 2021, M2P has come a long way.But this is not time to rest on our laurels.We believe that the future of fintech is here and now.And, we are geared up with futuristic fintech products that are data-driven with AI-ML engines, disruptive R&amp;D, and innovative propositions.<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.

M2P Growth Story: From Chai Conversations to Fusing Fin with Tech

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.

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