Navigating tomorrow: FinTech experts reveal the roadmap for 2024
By Puja Sharma
In the closing chapter, 2023, the financial landscape has undergone a transformative journey marked by substantial regulatory interventions. A notable shift has occurred with intensified collaboration among regulators, banks, FinTech firms, and technology solution providers.
This synergy has propelled the industry to identify opportunities, adopt innovative practices, and adapt to an evolving regulatory framework. Concurrently, the surge in data breaches has underscored the vulnerability of data privacy in the age of modern technology, prompting a heightened focus on cybersecurity within the FinTech and financial sectors. As the year winds down, the industry stands at the intersection of regulatory evolution, technological innovation, and a steadfast commitment to fortifying the integrity of financial systems.
“In alignment with global standards, India also took the milestone step to enact the Digital Personal Data Protection Act, which not only offered clear guidelines to businesses on usage and storage of customers’ personal data but also promoted responsible innovation. This will positively impact end consumers’ trust in the digital ecosystem and give much needed control and protection to them over data privacy. Next, the Reserve Bank of India (RBI) strengthened cybersecurity measures through Master Direction amendments, urging regulated entities to adopt a risk-based approach for KYC updates.” said Ankit Ratan, Co-founder & CEO at Signzy
This has helped in enhancing digital trust and combatting advanced tactics of fraudsters. On the back of this rapidly evolving landscape, we also saw an increasingly diverse range of uses for FinTech and RegTech applications, ranging from credit risk analysis, data governance to cyber risk resilience and information security. The amendments introduced by the regulators have made compliance easier which will also lead to enhancement of financial inclusion.
Ratan noted, “Looking ahead to 2024, we believe that the financial institutions will expand within the digital ecosystem. E-KYC, onboarding, fraud detection, and compliance services will aid in regulatory compliance while protecting user data and building digital trust. Onboarding, especially in a country with 1.4 billion Aadhaar holders, requires a deeper understanding of individuals beyond mere data possession as businesses don’t know ‘if the person is who he says he is?’. It is important for the banking industry to use Transaction monitoring which will help in distinguishing between good and bad actors.”
A notable trend for 2024 is the evolution of Generative AI, transforming how alerts are validated, especially given the daily generation of around 10,000 alerts. This innovation reduces analysis time and enhances scalability without proportionally increasing human resources. Along with Gen AI, artificial intelligence (AI) and machine learning (ML) continue to play pivotal role in enhancing customer experience. Through the utilization of machine learning techniques, AI systems can proficiently analyze vast quantities of data, recognise complex patterns, and subsequently generate informed predictions or decisions.” said Ratan.
ML serves as a cornerstone in elevating the capabilities of AI, rendering it more intelligent, adaptive, and efficient. To combat sophisticated fraudsters, increased investment in AI & ML is crucial to outsmart them and protect user data, fostering a trust-oriented digital environment. As we enter the new year, businesses will be compelled to adopt digital-first technologies. KYC/KYB processes will be pivotal in preventing money laundering and terrorism financing.
“As we stand on the cusp of 2024, the Indian FinTech industry stands on the precipice of an unprecedented transformation, poised to reshape the financial landscape in rural and semi-urban India. This transformative wave is propelled by a confluence of factors, including the widespread adoption of digital technology, a dedicated push for financial inclusion, and the integration of cutting-edge technologies aimed at empowering rural and semi-urban communities.” said Dilip Modi, Founder, Spice Money
The burgeoning landscape of women entrepreneurship in India’s MSME sector serves as a compelling testament to FinTech’s transformative prowess. Women-owned MSMEs, constituting nearly 14% of the total registered units, have experienced an impressive 110% annual job growth over the past six years. On the global stage, India, in its G20 leadership role, consistently underscores efforts to establish digital public infrastructure, actively collaborating with other nations on technologies underpinning the India Stack initiative.
The JAM (Jan Dhan-Aadhaar-Mobile) trinity has become the bedrock of India’s digital and FinTech terrain, effectively narrowing the financial divide in rural and semi-urban areas. With over 50 crore Jan Dhan accounts, 56% designated for women, and 67% initiated in rural areas, this initiative has democratized financial access, facilitating active participation in the digital economy.
Modi added, “Looking ahead to 2024, the Indian FinTech industry is set to intensify its transformative impact on Emerging India, creating innovative solutions tailored to the specific needs of these communities, including micro-lending platforms, mobile banking applications, and digital literacy initiatives. With its unwavering commitment to financial inclusion, Spice Money is set to play a pivotal role in bridging the financial divide and empowering rural and semi-urban communities to fully participate in the digital economy. The year 2024 promises to be a watershed moment, marking a new era of financial empowerment and redefining our interaction with money, particularly in underserved communities.”
IBSi Daily News Analysis
February 23, 2024
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