Home Markets How Technology Has Revolutionized The Way Finances Are Managed

How Technology Has Revolutionized The Way Finances Are Managed

by Prabhakar Tiwari (CMO, Angel Broking)
Feb 03, 2021
How Technology Has Revolutionized The Way Finances Are Managed, Market, KonexioNetwork.com

Technology has become indispensable in today’s age. Right from the beginning of the day till the lights are out, technology assists us in numerous ways to make our personal and professional lives much more efficient and seamless. Over the years, Technology has been an enabler in human lives. Not so long ago, the simplest of chores would have taken hours to accomplish. Going to the bank to produce documentation, offering collateral to open bank accounts, using passbooks to make entries of transactions, and queuing up in front of the cashier to withdraw money, all seemed like a distant dream. Furthermore, keeping track of account activity, and having all details at one place was a strenuous process, which was often handled by assistants and managers assigned to clients.

In the decade of automation and mobile app-based services, the BFSI sector has been at the forefront of integrating tech-enabled services for clients. The proliferation of affordable smartphones, tablets, computers, other internet driven devices have paved the way forward for ease of use in financial management.

Today, opening Demat accounts, transferring funds, starting fixed or recurring deposits, and applying for loans or credit cards has become a cake walk. To add to this, the demonetization in 2016 has resulted in the mushrooming of digital payment gateways, which have disrupted the financial sector ever further. Moreover, mobile apps now offer personal financial services, which come equipped with almost every option one could think of, in terms of managing money.

Disruption and its result

The competition in the financial sector isn’t confined to just banks and their affiliate institutions anymore, thanks to the innovation by FinTech companies and others. Business models, as well as job roles are being redefined to fit the demands of a digitally savvy customer. Artificial Intelligence, Blockchain and Machine learning-driven applications are ensuring the safety of customers’ accounts with improved security features to fight identity theft and frauds.

Banks had earlier been reticent to invest in the modernization of their business models and systems. The burgeoning tech industry has woken them up from their slumber, as leaner and sharper mechanisms are being discovered by new-age financial companies. They are now competing with other online models designed by crowd-funding platforms, NBFCs’ peer-to-peer lending models, Bit-coin, and algo-trading by brokerage firms, to name a few. In fact, even customers are getting accustomed to faster financial transaction mechanisms.

Other financial services that were transformed

In the case of the stock markets, customers are able to manage apps that provide detailed insights about the global and domestic economic outlooks, alongside minute details of each invested stock and performance of the markets. It would have been unimaginable for traders who queued outside stock exchanges a decade ago, to digest the agility with which trades are conducted today. These changes must be attributed to the disruptions brought in by ingenious thinkers across industries, who worked in tandem to deliver the Internet of Things (IoT) ecosystem to one and all. Even salaries can now be disbursed directly into employee accounts, not just in corporate houses, but also among MSMEs in remote locations.

Similarly, be it e-commerce, insurance or healthcare industries, payment procedures and the manner in which transactions are tied in with one’s bank account, suggest how complex systems have been broken down to provide smart financial management tools to the end user. Today, insurance agents can authenticate prospective customers remotely, through DigitalKYC procedures, retailers can sign up on e-commerce platforms to sell their products seamlessly through payment gateways, and health advice can be provided on apps, while the fees are transacted directly. Every industry has been digitally integrated into the macro-level financial system, assuring a constant access to money, transactions, and personalized financial health assessment.

What the future holds for financial management

As India opens up the financial system to those who have remained excluded thus far, it is bound to generate both challenges and opportunities. Technology has never played a more important role to address both aspects. It will be instrumental in detecting fraudulent activities, as well as streamlining credit-lending for those who were not deemed creditworthy.

In the next few years, tier III and IV towns will bring in customers in the millions. The ‘new to credit’ customers will be provided digital proximity to banking, brokerage, lending services etc. Moreover, inter-industry collaboration to facilitate blockchain and AI-enabled transactions in the far corners of the country will become commonplace, and a formalized practice. Industry 4.0 has begun its post-disruption journey, which will allow the blossoming of unique organizations, start-ups, financial mechanisms, and the changes they bring will be here to stay.