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10 Innovations Fintech Brings and What This Could Mean for Indian Banking

Gone are the days when FinTech was feared by banking players, and the era has ushered where new and traditional banking sectors are embracing technology to deliver cutting-edge solutions to consumers.

What Is FinTech?

When you blend banking services and technology, you get what we call ‘FinTech.’ From ordering food online to availing cab services at the tap of a button or even opening your very first savings account entirely online – all these are gifts of FinTech technology.

According to EY’s Fintech Adoption Index (2017), India has the second largest population of digital users, and digital payments are estimated to cross 1,800 crores in the current fiscal year. Figures paint the picture and here are the top ten Fintech trends you should watch out for in India.

1. ChatBots

Did you Know? According to the TrackXN Database, there are over 100 Chatbot Startups across India.

E-commerce stores, insurance companies and travel agencies have already begun using chatbots for the benefit of their services and providing personalised content to audiences based on their previous interactions. ChatBots are APIs that answer your queries and provide information to users based on their requirements. Conversational chatbots seem to be the primary focus of Indian banks with APIs often initiating conversations, answering FAQs, and asking users relevant questions related to what they’re looking for. In simple terms, they ask and reply, and the conversation continues in this sequence.

Banking chatbots like the Kotak’s AI-powered voice bot ‘Keya’ lets customers get product details, view charges and information related to IFSC Codes and other financial product information. Customized queries are redirected to human operators, and common FAQs are integrated with the search functionality on official websites.

2. Blockchain

Did You Know? According to a Thomson Reuters Survey, financial institutions pay between USD 60 million to USD 500 million every year to keep track of Know Your Customer (KYC) and customer due to diligence information. This data lets banks prevent terrorism and money laundering cases by making businesses provide information related to client identification and similar requirements.

Blockchain technology features the use of timestamps in banking transactions which makes them virtually unhackable. This means reduced fraud, increased instances of contract enforcement and more transparency between banks and consumers. Backend operations will be revolutionised with the power of Blockchain technology.

Blockchain technology will eliminate the need for intermediaries in payment processes and directly connect customers with their products or services.  Occupational hazards and trading errors will be reduced by improving banking efficiency through blockchain solutions.

3. Security

Did You Know? According to The Economic Times, there were over 53,000 cybersecurity incidents noted in 2017 alone!

Banks will be ramping up Cybersecurity measures to prevent hacking and leakage of financial data during transactions. Security trends entail the use of OTPs, biometric authentications’, HTTPs protocols, etc. during transactions. Identity validation and more KYC products will be tied to the growth of this segment.

4. Automation

Did You Know? Kotak’s Keya is India’s first automation solution that integrates phone banking and IVR services with bilingual support

An automated financial life will become indispensable and reality in the future. Banks are developing processes related to automated savings and investments, bill payments, and other one-off transactions which occur in individuals’ everyday lives.

5. Machine Learning

Did You Know? According to a Business Insider Report, Robo-advisors are expected to automate global asset management by up to 10% by 2020 in the world.

Machine Learning applications are in full-swing where banking app development is concerned. Put simply, “intelligent algorithms” accumulate customer data based on previous experiences and interactions and improve upon tools being used in banking sectors. Common use-cases of ML in banking include fraud detection, risk mitigation, customer support, Cybersecurity, and financial management for customers. Natural language processing algorithms in Machine Learning and AI will convert speech to text for legal documentation and organise client service queries into data that is searchable and presented accordingly.

6. Open Banking

Did You Know? 74% per cent of payment executives revealed that they prefer open banking according to a recent Accenture survey.

Systems like UPI and APES enable individuals to conduct POS transactions and simplify P2P transactions as well. Third-party services build apps and services which integrate modern banking services through the use of open APIs. Good examples of open banking systems include payment portal options offered by Uber and Big Basket.

7. Smart Workflow

Did You Know? About 30% of banking tasks can be automated according to a McKinsey report and with the introduction of ‘Smart Workflows’ banks will be shifting their focus towards consumers and strategising financial solutions based on their requirements instead of spending more time on mundane and repetitive tasks such as client onboarding and generating monthly reports.

Since technology is revolutionising the way banks operate, it stands true that their entire workflow paradigm will change too. “Smart Workflow” is another way of saying adding embedded AI technology to traditional banking workflows and automating the process as much as possible.

8. Agile Architecture

Did You Know? Kotak Mahindra Bank joined hands with RippleNet on June 2018 for enabling real-time cross-border transactions through xCurrent.

Micro apps and micro-services will be deployed into banking operations, and new architectural changes will follow suit with an emphasis on minimising the impact of the disruption of existing banking services.

9. Merger Between Physical and Digital

Did You Know? The Kotak 811 which enables users to open up zero-balance bank accounts within five minutes, thus reducing the hassle of visiting a branch to open a new account, unless the user wants to.

Digital services make availing services seem seamless, but when you visit a banking branch, things go traditional. A merger between physical and digital banking services is essentially reducing or eliminating this divide and using a combination of physical self-service and automated digital services at respective branches to deliver a complete user experience. Put simply; it’s merging physical and digital banking into a singular experience and making them interchangeable. Another example of joining the physical and digital banking experience is making banking services available to those who have access to financial service data but are credit poor.

10. Extended Digital Coverage

Did You Know? Kotak Mahindra Bank offers a wide range of corporate and SME Banking services like term deposits, e-tax payment, and more!

Extended digital coverage expands the realm of digital banking services by branching out into sectors beyond retail banking such as SME Banking and corporate banking. Internal operations will change based on the implementation of extended digital coverage applications in banking sectors.


The Indian FinTech trend is estimated to reach a revenue of USD 2.4 billion by 2020 and 2018 is a year that has opened the doors to innovation in various banking sectors. Private players and government regulations are encouraging change and embracing technological advancements in banking segments. What this means for the consumer are greater flexibility and seamless transactions.


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