In simple terms, digital banking means conducting banking functions online. Banking services such as-
Bill payments, checking bank statements, updating the passbook, money transfers, opening accounts, EMI payments, etc. are all conducted online using net banking or mobile banking facilities.
Many banks now have mobile or desktop applications that facilitate these functions. The Net or mobile banking applications ease the process and do not require the customer’s presence in the bank.
From the perspective of a bank, Fintech has eased the process and has reduced the turnaround time. It has also decreased the rush hours or hassle at the banks, thereby reducing the workload on the executives.
Fintech has automated banking functions and processes. Especially during the Covid-19 pandemic, there was a massive shift from traditional banking to digital. Mobile banking apps and Internet banking services were widely used during the pandemic. Fintech companies such as Phonepay, GooglePay, Paytm, Bhim app, etc. faced a surge in demand, especially from the middle or lower income group.
According to Worldbank, as of 2021, two-thirds of the adult population worldwide make or receive digital payments. About 71% have an account at a bank, or other financial institution, or with a mobile money service.
Leveraging the boom in online banking and Fintech, businesses can be very profitable. If you are a business owner or wish to start a business in this sector, here are some tips for a thriving business –
- First mover advantage – Digital technology changes rapidly with every technological breakthrough. Keep pace with these changes. If you have an idea that will streamline the processes or impact the banking industry, do not hesitate to implement it.
Dynamic has become a synonym for online banking and the Fintech sector. Be quick to enter the market with innovations, before the banking giants catch up with them. Take the first-mover advantage.
- Adaptable to changing demands – Be quick to respond to changing demands. As an entrepreneur, you must be quick to catch the pulse of the customers. Make the necessary changes to your product according to the demands or change the products to make them more relevant.
When it comes to Fintech, try to adopt a proactive rather than a reactive approach. This will prove to be a differentiating factor for you.
- Learn from competitors – Competitor analysis is the process of assassin your competitor’s products, core benefits and the point of differentiation. It also involves monitoring their moves and gauging the impact.
The Fintech sector is not any different. As a businessman, you must be on a constant lookout for your competitor’s products and offerings. Try to objectively understand the reasons for their success or failure. Try to derive meaningful insights from this analysis.
- Focus on UX – The key differentiating factor in online platforms is the user experience. Easy navigation, quick and easy accessibility, simple to use interface are a few factors that elevate the customer experience when using your website or application. Hence an investment in making your app or website stand out from the crowd is crucial even in the Fintech sector.
- Inclusive tech – During and after the Covid-19 pandemic the adaption of technology has greatly increased in the middle and lower-income countries and sections of society. Even the global gender gap in account ownership has decreased.
The adoption rate of Fintech is increasing, in such a scenario, it is essential to develop technologies or applications that are gender and income-inclusive. Many money services have the option to maintain zero or nil balance in their wallets or accounts. Many companies offer microloans at zero interest. Many have easy installments or EMI options making them all-inclusive.
Understand the demands of the market and make changes accordingly. This is the key to having a thriving business in any sector including Fintech.
As an entrepreneur, catching up with the latest trends seems like a difficult task. Hence MITSDE has designed programs for working professionals like you to update your knowledge and enhance your skills.
MIT School of Distance Education (MITSDE) is an AICTE-approved distance learning institute. It offers a unique Post Graduate Diploma in Finance Management.
Post Graduate Diploma in Finance Management (PGDM Finance Management) course covers the basics of finance, financial modelling, financial markets, mergers and acquisitions and international finance and hands-on training in the latest tools and techniques.