The digital movement has usurped the traditionalist way of life. The ‘Great Pause’ or the pandemic took away a lot from the world and stopped the globe at its stride, but what it also did was bring about a sea of change in the way humans lived, learned, entertained, and even transacted. Every sector saw this change, including the financial sector.
Technology and mobile phones democratised access to financial services and the disruption has been a welcome change. But we are not talking about the world at large. The lending industry is much more optimistic, financially inclusive, and is trying to be more accessible to many credit-invisible individuals.
The government also understands the market growth potential for this sector and has taken several steps to avail credits for millions of Indians and is infusing the sector with more funds to boost the fintech ecosystem.
Today, due to a robust digital infrastructure, better smartphone penetration and high-speed internet service, accessibility has increased for the majority of the population, who hitherto depended on other sources such as family, friends, and relatives for meeting their credit requirements.
Banks need to upgrade their processes
With this surge of digitalisation and the ease of transactions in the smartphone age, banks are fast realising that they need to collaborate, diversify, and create essential banking services. The ease of service and accessibility has to be the key factor in this engagement.
The new-age customer, with a phone in his hand, is probably the most powerful, demanding, discerning than they have ever been. Banks have realised that the attention has to be completely customer-centric, innovative, and absolutely seamless.
The shift in trend in the lending industry
In a digitally equipped industry, the fintech sector is trying to mitigate credit invisibility. Customer expectations are fast-changing, and they are seeking seamless banking solutions. In the post-COVID-19 era, there has been significant growth in the BNPL (Buy Now, Pay Later) products.
The market is looking to gradually recover, and with pent-up demand now being used, credit-seeking and purchasing have doubled or trebled in size.
Consumer credit is commonplace, and it often helps in ironing out budgets and family incomes in the short term, but with customers risking higher interest rates, the alarm bells are not far to go off.
Enabling access
The world has certainly started moving forward, but the post-COVID-19 era has introduced a new normal with an increase in the use of smartphones and digital channels. Over the lockdown, humankind shifted to digital platforms, facilitating the surge in ecommerce, fintech, edtech etc.
Customers now prefer availing services through digital channels at their own convenience. This has helped various industrialists to renovate day-to-day activities, the financial industry being no different also captured this opportunity through digital lending, neo-banking etc.
The way
In a clutch-and-brake economic environment that looks like the new normal in the coming years, the integration of banks and fintechs are necessary. These value-creating collaborations are what will see the next generation through to the new age of banking services.
The collaborative strategy seems to be the only way out, minimising documentation and decreasing delinquency, but at the same time, creating an empowering financial environment where customers are being served by banks without really fighting for other platforms.
With real-time data of consumers, the new-age lending platforms are looking to serve the under-served.
With a collaboration that is not just targeting the borrowers, it is also looking to get the money to the end consumer without compromising on repayment strategies. It is the fintech-banking collaboration that will help create more personalised services and provide the best on-demand experience for the new-age customer.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)
