Technology has redefined the financial services and the result, Fintech – an amalgamation of finance and technology, whose phenomenon has shaken the foundations of the financial sector. In the past decade, Fintech has seen an unprecedented rise in the global market by taking over. India though, not behind in this global trend is still the youngest to witness the enormous growth. Over the last year and a half, the Fintech has emerged as a transformative force in the financial market in India.
Ever since the Demonetization of high-value currency notes in November 2016 by Prime Minister Shri Narendra Modiji to achieve a digital economy, Fintech has become one of the booming industries. With the augmented usage of smartphones and the APIs coming into existence, the functionality of banking applications has become easy further opening many opportunities for the existing FinTechs and start-ups.
With the growing popularity for digital payments and new ideas originating in the banking industry, many traditional high-street banks are coming under increasing pressure to find technological solutions to provide access to necessary financial services to individuals, businesses and other organizations. In a bid to endeavor the digital transformation and stand the fierce competition, they are developing a winning digital strategy changing their business models shift from product-centric to customer-centric.
In the battle to dominate the market share in the modern era of banking, players or startups in the financial services industry realize that the dire need for proper governance is more urgent. Over the past decade, financial institutions or companies which are grouped under the umbrella of Fintech, have been investing in the necessary resources by making notable additions to their boards of directors. Fintech companies that typically do not have boards of directors comprised of individuals who are well-versed with the array of regulations are leveraging the expertise of establishment bankers and regulators by acquiring talent from traditional financial institutions and regulatory agencies.
Traditional banks, on the other hand, should do the same by onboarding technological expertise who is capable of understanding the challenges posed by technological innovation and who are adept with how technology can successfully be incorporated into a bank’s existing platform. All organizations or companies of any size can stimulate new governance with the right team of individuals having a profound understanding of a wide array of bank operations and also those who have deep technology experience. With a sound strategy for governance, financial institutions or Fintech startups can disrupt the finance industry landscape by transforming the traditional finance sector.