Ever heard about DeFi? Also known as Decentralised Finance, DeFi is the emerging financial technology based on blockchain that is expected to revolutionise the financial industry to its core. The current financial industry is highly centralised, with financial institutions and the government at its centre. However, with the emergence of Fintechs with DeFi, things will change sooner or later. Let’s understand how blockchain, particularly decentralisation, addresses the shortcomings of the current financial landscape.

How is Blockchain Addressing the Current Challenges of the Financial Industry?

Following are some of the significant challenges that the financial industry is currently facing:

• Centralised System: As discussed earlier, the financial industry in India is currently centralised, with the government and financial institutions at their heart. As the core idea behind blockchain business is decentralisation, introducing it in finance will address this shortcoming from the root.
• Slow Processes: The current financial systems are still lagging. Even though the technology is developing rapidly, the process is often delayed. This leads to a lower satisfaction rate amongst the users and customers.
• Trustability: When it comes to money, trust is the most crucial factor. While Fintechs are emerging, they are struggling to win people’s trust. People are growing more and more conscious regarding finances and their data. Therefore, imparting trust and transparency are core to the Fintech business, without which they cannot survive.
• High Operational Costs: Fintechs are currently burdened with high operational costs. If you see recent Fintech service providers, they spend a lot on customer acquisition and retention. This only adds to the cost of operations. If they make the process public and cut out dependency on multiple people, they can reduce their operational costs to a great extent.

In a Nutshell

The above problems can be tackled if the finance industry shifts from centralisation to decentralisation. Conventional brick-and-mortar banks are burdened with their existing customers and services, so conducting this shift is difficult. All eyes are on Fintech businesses that can bring revolution by integrating decentralised finance with the current landscape.

However, until the time transition is made from existing systems to DeFi, you can focus on selecting the best financial systems and gateways for your business. PayU is a leading payment gateway that provides 150+ payment modes and allows you to accept payments in international currencies. So, let your business flourish with happy customers using PayU!

FAQs

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Financial services were one of the first industries to see the potential of the Big Data revolution and the surge of innovation that has accompanied it – including Artificial Intelligence (AI). AI is a powerful technology that has already been used extensively in the financial services industry. It has a lot of potential to make a positive difference if organizations use it with enough caution, wisdom, and care.

FinTech firms are more likely to utilize AI to launch new products and services, whereas incumbents are more likely to improve the existing ones. A growing number of FinTechs are taking a product-oriented perspective to AI implementation, delivering AI-enabled solutions as a service.

For the FinTech industry, AI is offering novel solutions. AI can evaluate enormous amounts of data incrementally over time via machine learning. Artificial intelligence is being utilized to recognize fraudulent activities unusual transactions and overall provide a rise to handling sensitive financial data – all with a lower possibility of privacy risk – by identifying suspect behaviors.

Why Is FinTech Lagging?

Finance, like other sectors, has already undergone several changes as a result of the digital transformation, including information sharing, financial consumer and shareholder engagement, and increased data analytics. 

However, a significant reason is that most institutions are still restricting themselves and operating in minor ways. Some of this may be owing to the regulation established in the sector. Additionally, it will not be easy to change. However, our perceptions and behaviors account for a significant portion of the lag.

Enter into the digital domain and make greater use of the resources available to you. The earlier we conform to how the financial scene has already altered, the quicker we see the results and keep pace with other technologically advanced industries.

The Need For AI in FinTech

In FinTech, AI can assist businesses in achieving their growth goals, an advantage over competing and becoming more accessible to their customers. It can also help them in lowering operational costs and streamlining internal operations. Customers can benefit from this by better managing their finances.

Here are a few instances where FinTech is helpful:

Security & Fraud Detection

FinTech apps provide new and innovative ways for users to digest information, resulting in better financial decision-making. Data analysis through applications becomes simple because of machine learning and visualization tools, translating it into understandable insights.

Offers Better Security

Financial cybercrime will rise as digitalization procedures become more popular worldwide. Thanks to AI, users and businesses can now protect themselves and their credentials.

Algorithms can detect questionable conduct and, even further, alert consumers. Because these technologies can closely and constantly monitor abnormal trends, there is no need to stay attentive 24/7.

Personalized Banking Apps Powered by AI

Many banking applications provide tailored financial guidance to help users meet their financial objectives, monitor their income and expenditure, and more. AI-powered FinTech developments are primarily responsible for this personalization.

Customer Service

The best AI application is bots. ML algorithms have only gradually begun to gain traction, even though they have been here for some while. One can observe the rise of intelligent chatbots that can communicate with consumers and respond to a range of customer queries on a real-time basis.

Asset Management

For a long time, investment funds have depended on complicated algorithms to create reliable forecasts and models. Several asset and wealth management processes have been restructured, and additional services such as the introduction of wealth management tools.

App users may now access their bank statements and conduct important transactions on any of their gadgets. Most significantly, AI and machine learning technologies give users the option of reducing the rate of intermediaries. As a result, asset management cuts expenses by eliminating redundant processes.

AI-powered Payments

Transaction banking is a sector with the ideal conditions for AI to thrive.

In the payment business, artificial intelligence can drastically reduce fraud detection. An AI-powered payment system calculates a risk score based on various parameters. The payment gateway sector can now execute large transactions with greater precision and lower mistake rates thanks to AI.

Use Cases of FinTech Innovation Driven By AI

As per the FinTech 5×5 survey, 67 percent of FinTech organizations believe AI will significantly impact the industry over the next decade. Ignoring a technology transition in the finance industry means depriving your company of the prospects for proper growth and development that AI in FinTech may offer.

ZestFinance has used AI to construct an automation interface that enables FinTech firms to screen potential loans more quickly. The software assesses the risks and provides employees with a rapid image of whether a potential borrower is trustworthy.

Payoneer and Skrill, both online payment providers, use AI to evaluate complex data.

Crest Financial Group uses the DataRobot machine learning platform to study client activity, and create predictions to detect and prevent suspicious transactions.

Privatbank, a prominent Ukrainian bank, employs AI-powered chatbots that utilize Natural Language Processing to address fundamental questions of users and give advice using the bank’s different services.

These solutions have the same purpose – to boost FinTech organizations’ productivity. You can considerably reduce the stress on your human personnel by deploying data analysis automated processes and chatbots.

Conclusion

Because of artificial intelligence in FinTech, companies in the financial services sector have entered a new age of progress and expansion. These technologies are becoming increasingly important in a wide range of processes. This is the right time to leverage the possibilities of machine learning and AI as a driving factor for your FinTech company’s survival and prosperity.

The post How Has AI Entered The FinTech Space And Its Management? appeared first on PayU Blog.

Here are some of the top industries that will be trending in India by 2022:

Edtech

The emergence of Covid-19 provided India’s academic technology (“EdTech”) sector with a once-in-a-lifetime chance. The regular face-to-face connection between a teacher and pupils suffered a major setback, and a radical change to the unusual online learning style occurred practically instantly. This shift propelled the EdTech business into the forefront, and it acquired the necessary financial and legislative encouragement to grow in the fiscal year (FY) 2021-2022. The EdTech sector’s stratospheric expansion is evidenced by a significant inflow of funds, acquisitions, and the formation of new start-ups in the preceding fiscal year.

Ecommerce

Despite the outbreak of the Covid-19 pandemic, India’s e-commerce growth slowed dramatically in 2020. However, projections for this year and forecasts through 2022 suggest a strong increase before leveling out until 2025. According to research from GlobalData, a London-based reporting, and analytics firm, e-commerce revenues will expand at a percent per annum (CAGR) of just over 18 percent between 2021 and 2025, reaching $120.1 trillion (or Rs 8.8 trillion). The e-commerce channel is presently on a fast-rising trend, according to card payment rates and GlobalData’s e-commerce statistics (see chart below). Between 2017 and 2020, the economy’s growth dropped from about 30% to just over 12% the year before.

Fintech

This might not be new, but the tech industry’s evolution has resulted in new forms of professions and services. Financial apps, for instance, became one of the most prominent start-up sectors last year, according to Statista. With the growth of mobile, a large portion of the population has begun to depend on digitalization for day-to-day tasks. Although previous people have resisted adopting a digitally advanced lifestyle, many have been forced to learn how and where to pay bills and manage their finances using smartphone applications rather than a computer in 2022. As a result, hundreds of new applications are added to the app store every day, including apps that collect payments and make it easy to make payments.

Digital & Social Media Marketing

Many organizations are figuring out how to remain appealing in the electronic era, especially to the proliferation of smartphones. As a result, the number of young individuals pursuing jobs in branding and understanding methods to become marketing specialists has increased dramatically. In addition, now that having a social media presence is necessary, a massive burgeoning sector will continue to generate money as older firms turn to younger advertising to remain ahead in the marketplace.

Online Gaming

Gaming has become a very popular and successful sector in India due to technological advancements in internet access, mobile phone usage, and video game consoles. More gaming businesses are opening up and generating better, higher-quality games as gamers focus on streaming live broadcasts on YouTube and Stutter. Similarly, the internet gambling sector has continued to expand in this regard, with justgamblers.com noting that 15 new websites have launched in the last year alone.

AI & Automation

AI software, such as Amazon’s Alexa and Google hubs that rely on voice activation to execute different functions, is now available to more households than ever before. This has opened up India and fostered the establishment of comparable local enterprises specializing in developing this technology, consolidating it to make it simpler to use, or even experts with the know-how to repair it. Restaurants and other companies are also adopting automation, from ordering meals from a menu to replacing employees with trained robots. Economists predict that additional employment in programming, maintenance, and other related fields will emerge as this business grows.

Pharma With Digital Healthcare

The pandemic also wreaked havoc on the healthcare business. Patients who regularly visited their doctors were suddenly unable to and had to rely on video conferencing with their medical providers. In addition, it became difficult to obtain medicine because many pharmacies were closed and had reduced personnel. At the same time, the healthcare system was overburdened. This has sparked a tech transformation in the medical business worldwide, particularly in India, where digitization has become a need due to the country’s massive population. This opened the door for new businesses to enter the market, such as those that assist hospitals in effectively storing and processing patient information, transfer papers, and arranging meetings and other services. According to Nidhi Jain, President of KareXpert, in a discussion on financialexpress.com, these healthcare technology enterprises will continue to grow into a trillion-dollar sector.

For more information on trending industries, head over to PayU India.

The post India’s Fastest and Trending Businesses In 2022 appeared first on PayU Blog.

Similarly, a radical transformation has happened in the fintech ecosystem. This growth has happened in payment solutions like UPI, wallets, one-tap payments, tokenization, and blockchain in the last ten years. Seeing this, it is quite evident that customer expectations and needs are driving new product breakthroughs. 

Fintech as a sector itself has revamped entirely in terms of providing a seamless customer experience while gaining trust as well as by delivering secured payment platforms. 

Challenges in Building Fintech Products

Developing successful fintech products doesn’t come easy. It always comes with challenges such as compliance with the latest Government norms, Artificial Intelligence (AI), and big data capabilities. Along with improved user experience (UX), data security among others.  
 
If these are taken care of in the nascent stages, the challenges will be minimal at the time when the product is put to test. 

Now, you must be thinking what’s the driving force that helps in building such successful products in the fintech ecosystem? Here’s a list of them: 

1. Innovation 

In the online payment environment, the customer goes through a lot of problems such as payment failures, delayed refunds, etc. As per the studies, a merchant is the one who bears the brunt of cart abandonments due to the limited availability of payment options, complex checkouts, or any other technical glitches.

Manas Mishra, Chief Product Officer, PayU India believes “A customer-first mindset is a driving force behind any innovation. Creating successful fintech solutions at scale relies on this guiding principle.”

As a result, a lot of innovations have happened in the payment world to tackle such problems. Problems focusing on providing the best customer experience. With the use of innovative solutions like One-Click payments, customers can make quick payments at the checkout without switching over to different tabs, remembering their CVVs and OTPs. Isn’t that cool, right? 
 
Even, studies have revealed that such innovative solutions can make the payment process 1.5x faster. 

So, it’s the need of the hour to invest in seamless payment experiences. In other words, payment experiences that foster repeat purchases and increase average transaction value and transaction success rates. 

Long story short, to make your product development successful, it has to go beyond meeting business needs. Not to forget that it also add value on a larger scale. To accomplish this, product managers and engineers have a suitable environment. An environment where they get a level of trust, empowerment, and ownership. Thus, they are more likely to generate innovative ideas. 

2. Deliver what your customer wants 

We are currently living in a world where customer preferences and requirements are constantly changing. If a brand does not evolve itself with the changing winds, chances are high that it will perish soon.

The Pandemic era served as a catalyst that led to a massive change in the way customers use online payments. They were keen to use contactless payment methods that are quick and can be used anytime, anywhere.

Suitably, the payment service providers along with merchants have responded to the emerging needs with omnichannel solutions. Right now, a lot of payment decisions are being made through multiple payment channels. They have expanded to payment checkpoints too. 

Consequently, businesses are now adopting omnichannel payment solutions to provide a seamless experience to their customers. 

Final Thoughts

Fintech is one such sector that is highly changing. Evolving existing products with the changing needs is the only way to sustain and be successful in the market. In other words, customer-centricity is the only way to stay ahead of others and remain unaffected by the changing winds. 

Incorporating this approach into fintech products can boost financial inclusion, lower entry barriers, and democratize technology across the nation. As you empower customers, you enable businesses.

The post Why is a customer-centric approach key to building successful fintech products? appeared first on PayU Blog.

PayU is very proud to announce the findings of its first Financial Prosperity Barometer. The landmark global report was undertaken to understand the link between perceptions of prosperity and access to financial services, in line with PayU’s vision to create a world without financial borders where everyone can prosper. We wanted to understand what does ‘prosperity’ mean to different people? Is its meaning the same across all the high-growth markets in which we operate?

The survey was conducted across 18 markets including India, on over 10,000 people globally. Throughout this report, we have unearthed the depths of these different views on what it means to be prosperous and looked at how access to different financial services can impact them. The report throws up fascinating global insights such as over 75% of respondents believe that financial services can help people plan for future prosperity and 50% of believing they could not be prosperous without access to financial services. However, prosperity isn’t just linked to finance, as over 30% of respondents listed ‘being happy with your life’ and ‘good health for friends and family’ as the key characteristics for defining ‘prosperity’. Only 25% of respondents feel that ‘being wealthy’ in itself is necessary for prosperity.

The India-specific findings reveal interesting insights, with many respondents clearly identifying a link between access to financial services and an increase in personal prosperity. It also discloses a number of consumer trends when it comes to financial services. Some of the regional variations and interesting trends in India are:

• Over 85% of digital Indians believe that financial services help people plan for their future prosperity
• Close to 80% of them have found financial services helpful to become more prosperous
• 85% of Indians felt the government’s larger role will be beneficial for accessibility to financial services
• A majority (80%) of digital Indians are confident that they know how to make good financial decisions
• Although there have been numerous conversations of the economy slowing down, the PayU Global Financial Prosperity Barometer reflects that over 77.25% are comfortable with the current financial state of their households and majority of them expect it to improve over the period of next 12 months (83.50%)
• For Indians, prosperity means much more than financial stability. Close to 40% of digital Indians believe that being happy, having a loving family and good health of family also equates to being prosperous
• Over 80% of Indian respondents felt their ease to borrow money is linked to living a more prosperous life
• 40% of Indians surveyed prefer traditional bank to borrow money, with an increase in demand for borrowing money from digital money providers. Most Indians still believe that the biggest social and emotional benefit of saving and growing one’s money is to be able to plan for the family’s future
• Ease of Access – When it comes to ease of access to financial services a majority of respondents reported ease of access to saving and investing money. Of all the services, over 80% have easy access to depositing money, 79% of respondents said they had easy access to send and receive money, 74% said they found it easy to insure the property against accidents and 73% said they found it easy to access somewhere to save and grow money for the future
• Digitally inclined India – While traditional banks continue to lead as a platform for people, online platforms are becoming more & more popular. 58% of the people surveyed used a website to transfer money, 51% used an online site to deposit money and 49% used online websites to borrow save and grow money
• There is a growing use of smartphones to access financial services – Over 55% of digital Indians interact with their financial service provider through smartphone apps to send or receive money from elsewhere

“At PayU, our vision is to create a world without financial borders where everyone can prosper. It is insightful and interesting to discover the strength of the relationship between access to financial services and perceptions of prosperity. For India, a few things stand out, firstly that the notion of prosperity goes beyond purchasing power and is linked to the ability to create wealth and safety nets for oneself and one’s family and secondly the degree of dependence and adoption of internet technologies to access financial services. I think it shows the customer appetite for financial services and is a great opportunity for fintech players,” said Anirban Mukherjee, CEO of PayU India.

To access and download the report please click on: PayU Financial Prosperity Barometer

To access other materials please click on: Video and Financial Prosperity Barometer landing page

With more than 4.5 lakh merchants, PayU is India’s leading all-in-one payment solution. Now to enjoy the best payment gateway experience and grow your business effortlessly, 

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