Threat from Fintech & Tech giants to Banking Industry

With the growth of digital transactions, Banking customers expect convenience and seamless experience when it comes to accessing services. According to BCG & Facebook studies carried out, number of customers using online banking is likely to double to 150 million by next year. Rising online Banking users could be partially attributed to digital push by Government of India, in order to move towards less-cash economy. GoI has launched payment platforms namely UPI (Unified Payment Interface), BHIM (Bharat Interface for Money), BBPS (Bharat Bill Payment System) and AePS (Aadhaar Enabled Payment System) for encouraging users as well as businesses to undertake digital transactions.

Dynamic customer/consumer preferences and digital platform promotion initiatives taken by the GoI have opened up doors for technology giants namely, Amazon, Facebook and Google to firm up their footsteps into Indian Financial Sector, thereby launching innovative products/services benefiting customers/consumers. Payment platforms like Amazon Pay, Google Pay, Apple Pay and proposed Whats App payment services would pose a greater threat to the Banks in that field. More than 200 million Indians are already using Whats App messaging services, which will make it a prominent player in the Payment space. Usage of big data in analyzing consumer behavior patterns could aid these tech giants to work on vital aspects of consumer delight, uniform customer experiences and financial inclusion.

Though Government has taken multiple digital initiatives on tech infrastructure front, Banks are yet to fully capitalize on this opportunity despite growing number of internet users. Technological advancement coupled with ERP platforms would enable banking system to cope up with ever growing preferences of its customers besides remaining ahead on the dynamic competitive landscape.

Besides tech giants, home-grown fintech companies namely, PayTm, PhonePe, Mobikwik, Freecharge, Zerodha, Mpaisa, Policybazaar, Lendingcart, Mswipe, Bankbazaar, Paisabazaar and FINO PayTech have been posing threats to Banks in the space of Payments, Insurance, MF advisory, Online lending and Online Trading Services. Banks have to find out innovative ways of facing growing challenge not only from the home-grown fintech companies but also from tech giants.

Keep watching this space for more updates on the latest trends in the Banking Industry!