The federalizing of money management from advisers and institutions to individuals have seen greater levels of financial literacy and ability to customise one’s own money management. With the advent of digitization, these Personal Finance solutions are offered on smartphones. Thus, it is now possible to make informed financial decision in real time.
Although some banks have started to develop their own personal finance management software, many are turning to fin-techs start-ups, Tech service providers, and smart device manufacturers, for their offerings.
Some of the key factors how fin-tech is changing personal finances are
1. Payments: Even though credit/ debit cards have been around for quite some time, the digitization of payments through the introduction of personalised finance apps, like mobile wallets, UPI’s and card-less barcode scanners etc., intertwined smartly with point of sale technologies, have made payments one of the most revolutionary of all Fin-tech offerings. An amalgamated and innovative ecosystem that is supple and offers solutions to consumers and merchants which are easy to use, have universal suitability, most appropriate payment mechanism and highly secure are becoming part of the personal finance management.
2. Marketplace lending: Marketplace lending commonly known as alternate lending, refers to the un-conventional mode of data analytics for establishing credibility of consumer for lending. The online lending platforms, are not the axioms among the fin-tech sector, drive intelligent data collection, and analysis to facilitate informed and augmented decisions on the credit worthiness of the borrowers, thus cutting down drastically on time and cost, while enhancing customer experience and agility in offering solutions.
3. Insurance technology: Technology in finance is driving growth of the insurance segment by cutting down on risk, costs and time, and creating a robust, efficient and shorter insurance value chain. With the use of AI, Data analytics and block chain management for risk assessment, claims management and sales, the insurance sector is witnessing massive transformation, especially in areas of authenticating claims, claim settlement, background checks, KYC’s, faster on-boarding and improved consumer experience.
4. Wealth management: The rise of robo-advisors, along with the proliferation of AI tools, has transformed the way financial advisors interact and provide services to their clients. Wealth management is a significant forte once considered to be the privilege of the few intelligent bankers, is undergoing a makeover globally with a unique hybrid automation approach- a combination of robot advisory and human intellect driven service.
Conventionally the personal finance sector has been known for its tough regulatory framework, scrupulous documentation, and lengthy, often cumbrous processes. With the advent of IT revolution, the fin-tech segment offered an alternative to the individuals and corporates alike, enhancing consumer experience, simplifying processes and making it faster and efficient format of financial transactions across platforms.
The author of this article is Sumana Iyengar (CEO & Co-Founder Goavega Software India Pvt Ltd)