Fintech holds the key to banking evolution in the country

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The author of the article is Chaitra Chidanand, President & Co-Founder, Simpl

With the first bank being established in 1472, the banking and financial sector today is not like what it was a decade ago. Spending hours standing in long queues, drafting cheques or signing documents to withdraw money has become a rare scene these days. All these systems and processes have been incrementally simplified or replaced through technology. A much longer visit to a bank has been replaced with the opening of an app on your phone today. 

When you take a step back, you realize that through the increasing pervasiveness of technology, what we really stand to gain from it is convenience. More than the idea of obsolescence or replacement, it’s that of convenience. Multiple facets of our life, and not just the banking industry, are impacted by technology and have made our lives inherently far more convenient. 

For us at Simpl, the real impetus about what we do is the idea of convenience. How can we make a merchant’s life easier? How does this benefit their consumer? E-commerce, hyper-local delivery, and a plethora of options; all of which are enabled by technology, have made consumers rely or default to options that involve technology in some form or the other. Usually, the one part that is not under a user or merchant’s control is the payment process. Conventionally, this involved OTPs, or remembering entire card numbers and one wrong entry on the keypad meant a failed transaction. Persistent users would persevere and redo the transaction. The slightly less persistent? They’d abandon the transaction altogether. 

Which is where the value process of a simplified transaction process paves the way for repeat-purchases. It drives better engagement with users and merchants and over time builds trust. And this journey is not a complex one. Rooted in and enabled by technology, it moves from convenience to trust in a few short steps. Which bodes well for the future of transactions in the country.

Everyone remembers the spike in digital transactions that followed demonetization. However, by 2025, India is expected to have 0% cash transaction which is a far cry from the inconvenience of denomination one faces in most cash transactions. With UPI-based payment platforms having overtaken card-based payments, it’s not hard to imagine a future with almost no cash payments. 

The need of the hour then, in extending the concept of convenience, across the board is a safer environment within which organisations may experiment. At this point, the RBI’s regulatory sandbox will provide the right stimulus for innovators. Running the regulatory sandbox in a time-bound manner at each stage can mitigate the risks like payment transaction failures and over time, create systems of trust and convenience before they hit the market commercially. 

In summary, formal banking has been disrupted a lot in the recent past with the advent and access to technology. However, what we mustn’t forget is that through incremental changes in the financial ecosystem, spurred by technology, we’re reaching a point where trust and convenience operate hand in hand. What’s needed is the right impetus to ensure that this flourishes in the time to come.