How fintechs have transformed banking for individuals and businesses?

As a result of these partnerships you can today open a bank account in less than 24 hours or avail a loan in sub 30 minutes irrespective of you are in Kashmir or Kanyakumari. The intense level of competition in the sector has also improved the customer experience that one gets today compared to just 5 years ago.

Payments has had the most amount of innovation till date; 10 years ago you would carry cash of all denominations to make sure you had the right amount of money to pay for any transaction. Today a combination of PayTM, Phonepe, Google pay etc has made that irrelevant. It’s not hard to imagine an India in 5-10 years which doesn’t need to carry any cash. We still have a long way to go but the fact that we crossed over 2 trillion transactions in the last fiscal years means we are well on the right track.

Lending earlier would involve physical visits, a massive amount of paperwork, 45+ days to process the end amount and would carry a hefty processing fee. Today the scenario has changed drastically; it initially started with fintechs lending money to individuals and then to SMEs through an underwriting process very similar to banks but much quicker.

Over the course of the last 5 years because of increasingly higher acquisition cost both the speed and underwriting process has improved dramatically.

Almost every fresh college graduate can today get a credit card even though they have no credit history removing the perverse cycle which used to exist earlier → You needed a CIBIL score to get a loan but to get a CIBIL score you needed to take a loan :) Companies like HDFC, Slicepay, RBL, Kredit Bee are at the forefront of this new era. New initiatives from the government on things like the account aggregator license will improve the likelihood of any one in India to get a loan.

Given the plethora of choices available to every customer today; the customer experience has taken a very positive turn. Though we are still some away from having a truly seamless experience online, KYC services such as CKYC, e-aadhar, e-sign etc have made the process far more bearable from when we would have to carry everything from our birth to marriage certificates.

Tracking your investments, wealth, authorizing transactions etc is only one tap on your preferred mobile application. Banks and fintechs have made banking simple, uncomplicated and fun; something I thought would never happen. There is real joy in being able to get things done quickly and without having to check every granular detail to make sure things are right. The power of tech and collaboration.

There are a lot of ups and downs that the fintech and banking sector will go through but at the end of day it’s going to make banking better for everyone. Increased competition across the space will give way to more direct collaboration across banks and fintechs; both parties will profit by a symbiotic relationship of better product design by fintechs and massive distribution capability by banks.