Fin Tech Firms A Disruptor Or Partner To Banks

As the finance industry grapples with what the next generation of banks and payment systems will look like, whether you’re a multibillion-dollar traditional bank or a startup looking to bring cutting-edge technology into the mainstream.

- Gijo Verghese

Introduction

The initial offering in this segment came in the year 2005 with the introduction of BC (Banking Correspondent) model to increase penetration to unbanked areas. FinoPayTech and Eko India were the major start-ups that took advantage of this opportunity and built their services around the BC model. The year 2010 saw the slow emergence of fin tech companies in a heavily regulated market, but with lots of restrictions in financial sector the way forward for such companies was sceptical. In the year 2015 the Indian Fin tech sector, saw a spike in the emergence of numerous Fin tech start-ups, incubators and investments.

Banks have also launched solutions with the help of their in-house teams aimed at improving the digital financial infrastructure. Some of the initiatives include:

• Union Bank of India launched the *99# mobile application in partnership with NPCI that allows basic services like balance inquiry, fund transfers and mini statements to its customers even when there is no internet

• Axis Bank presented the 'Invoice to Payment' feature that provide end-to-end digital invoicing and payment solutions

• ICICI bank launched a contactless mobile payment system which could enhance NFC payments in India

• DBS introduced the first mobile bank that allows customers to open accounts digitally with their ID proofs.