Fintech NBFCs and Market Shifts: How Fintech NBFCs Should Adapt to Market Trends

This article has been contributed by Kunal Mehta, Founder and Director, Arthan Finance.

The fintech industry has been growing and developing rapidly with the introduction of digitization in various aspects of the system. The traditional format of banking has evolved at a great speed, especially since the pandemic. NBFCs operating in the fintech sector have seen significant growth in recent years. With technology driving growth in almost all sectors, there is a greater need for a smoother financial system interface. Fintech NBFCs, or non-banking financial companies, have enhanced the financial experience of customers by offering innovative, technology-driven solutions. There has been a major shift towards digital and cashless transactions, creating greater and better opportunities for NBFCs to expand their businesses and portfolios.

However, with technology constantly upgrading and shifts in consumer behavior and demands on the market, the NBFCs must continuously adapt to stay ahead of the curve. Along with digital solutions, NBFCs also need to embrace technologically-driven solutions for the best customer experience.

Since the pandemic, market shifts and wavering demands have put some pressure on the fintech companies to thoroughly analyze the futuristic demand. In order to stay relevant, NBFCs should be able to understand the nature of the demands of their customers and their futuristic needs. Some of the changing market trends that will shape the fintech industry in the coming years are:

Constant Integration of Digitalization
Amplifying Security
Expansion into New Geographic Markets and Product Lines
Blockchain Technology
AI-driven Data Solutions
Leveraging IoT Technology
Hyper Automation
MetaVerse Fintech

Constant Integration of Digitalization

Although fintech companies have been established through technology, NBFCs must continue to invest in building and adopting new technology and digital infrastructure that will help streamline internal processes, enhance customer experience and collect data that will help them understand the future needs of their customers.

Amplifying Security

In recent years, there have been a lot of fraudulent cases relating to online and digital payments. This has made people wary of using technology for their day-to-day transactions. There is a dire need within the fintech sector to strengthen their security and protect the trust of their customers. With digital payments becoming the new norm, designing a high-security transaction system will help NBFCs boost growth and expand their customer base.

Expansion into New Geographic Markets and Product Lines

One of the biggest assets of the fintech sector is easy accessibility. The consumer can conduct all financial transactions at the tip of their fingers. However, in order to make their services available and known, NBFCs need to venture into new geographical markets and market their products locally. This expansion will help to increase the reach of NBFCs and create new business opportunities. Additionally, expanding their product portfolio will help NBFCs reach out to a bigger market and create more opportunities for business.

Blockchain Technology

Blockchain technology is increasingly being adopted by the fintech sector for its potential to improve transparency, security, and efficiency in financial transactions. It enables the creation of secure and decentralized ledger systems that can facilitate a range of applications including digital payments, smart contracts, and decentralized finance (DeFi). Blockchain technology can help improve financial inclusion by enabling faster, cheaper, and more secure transactions for individuals and businesses, and can also reduce fraud and errors in financial transactions. Additionally, it has the potential to streamline various financial processes, from remittances to insurance claims, by eliminating intermediaries and increasing transparency. NBFCs need to gradually experiment with integrating this technology to understand its pros and cons on the user experience and business.

AI-driven Data Solutions

One of the biggest boons within technology has been AI-driven data collection, segregation, and solution. NBFCs should look into amalgamating AI in their systems and allowing AI to understand customer behavior. This will help fintech companies to provide customized products and services to their customers, benefitting both, the company and the consumers and driving major value creation.

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Leveraging IoT Technology

IoT Technology has been effectively changing the dynamics of the financial landscape. IoT has excellent data analytics capabilities that can help segregate millions of data points in seconds. Additionally, it can swiftly detect hackers, attacks on the system, and malware being uploaded. This can help NBFCs detect fraudulent activities and increase the security of their system and protect the data of their customers. IoT can also help mitigate risks for secured and unsecured loans while improving consumer engagement.

Hyper Automation

With new technology within AI and deep learning being designed and introduced, process automation would be the next fintech market trend to be adopted. From deploying chatbots and introducing deep learning to understand customer behavior, Hyper Automation will reduce paperwork, increase efficiency, enhance decision-making, and make the entire experience seamless for the customer.

MetaVerse Fintech

The biggest revolutionary technology, the MetaVerse, is one of the most innovative and crucial technological development. With proper development, MetaVerse will become a universe of its own, drawing customer engagement and driving value creation through various services. Fintech companies must look out for MetaVerse Technology as it is fast evolving and still new in its phases. With fintech MetaVerse, customers will be able to conduct their banking and financial activities and transactions in a virtual reality format. This, in a way, will be building a full circle.

With technology making it easier for customers to conduct transactions on their phones introducing MetaVerse where customers can enter virtual reality and experience traditional banking services. This will be revolutionary for NBFCs as it will allow them to provide a personal touch and experience to their customers and help retain them. It will also open up new opportunities and avenues for customer engagement and build loyalty and trust.

Conclusion

Fintech companies and NBFCs have been leveraging technology to improve the customer experience, making it faster and more convenient for users. By adopting new technology, expanding their reach, and building avenues to retain customers, NBFCs have a huge opportunity for growth and development in the coming years. Fintech companies need to stay focused on creating business strategies that will help them integrate new technology in a seamless manner, which will enhance the consumer experience.