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Upasana Taku

Upasana Taku, Co-Founder and Director, MobiKwik.

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Mobikwik, An Evolving Stack. Key Focus Areas for FinTech Players to Learn from This Journey

Technology has been at the forefront of developments in the fintech industry. Data analytics have been enabling companies to comprehend customer needs and discover new paths to profitability. Financial technology is also boosting surveillance tools and countering cybercriminals while machine learning is facilitating tax planning and wealth management.

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In India, the financial services industry is undergoing a paradigm shift. Demonetisation acted as a shock therapy and forcefully nudged many individuals, industries and institutions into adopting digital transactions, almost overnight. Since 08 November 2016, when India underwent a ‘digital revolution’ of sorts, there have been steady gains for fintech players across India. Post demonetization, over the next one-year, digital payment companies grew exponentially and brought about a noticeable change in the way India did its financial transactions. The pace of change has been accelerating ever since as more stakeholders realised the benefits of swift, seamless and safe digital transactions.

Earlier, many banking and financial institutions were reluctant to embrace digital transactions, given their legacy systems that made innovation cumbersome and costly. But recent events have superseded their concerns, leaving them with no choice except to adopt digital means to promote growth in an increasingly digitalising economy. 

Technological Advancements Pave the way for the future 

Technology has been at the forefront of developments in the fintech industry. Data analytics have been enabling companies to comprehend customer needs and discover new paths to profitability. Financial technology is also boosting surveillance tools and countering cybercriminals while machine learning is facilitating tax planning and wealth management.

To add to this, digital technology is achieving these objectives at a lower cost. AI and software bots are making operations more efficient, thereby improving customer experience. Presently, financial firms are exploring the benefits of launching their own virtual assistants. And as customers discover the sheer speed, comfort and convenience of online banking, visits to banks are declining. This is good news for digital first and mobile first payment and lending companies as well as banks.

Significantly, 2018 will witness the ever-expanding deployment of digital tools in the financial services space. Advanced analytics, AI, and machine learning are all primed to drive cost reductions and better, faster decision-making. Naturally, the early adopters are stealing a march on the late risers. Therefore, the sooner fintech players get a grip on digital tools, the faster the deliverables and the safer the transactions. 

Realizing the ‘Power of Partnerships’

In the initial days, banks and other conventional financial firms feared the disruptive influence of digital players, however, in today’s times, both parties are realising the benefits of working in tandem to drive greater customer satisfaction. Several traditional financial institutions are working closely with the new age fintech companies to roll out cutting edge solutions for the customers.

We, at MobiKwik, have numerous success stories around the ‘Power of Partnerships’. Bajaj Finserv joined hands with us to create India’s first credit or EMI wallet, that offers seamless digital ecosystems for all financial transactions. It is the first debit and credit wallet that integrates technology to financial products and services. IndusInd Bank also tied up with MobiKwik and launched country’s first auto-load co-branded wallet, allowing millions of customers of the IndusInd Bank to simply tap their mobiles and have money automatically debited from their accounts while making purchases, without the need of loading money into their wallets. Adhering to mobile banking norms, the transactions are authorised via an additional authentication factor. 

Such tie-ups build on the synergies of banks as well as fintech entities, ensuring the best of both worlds for customers seeking seamless payment transactions, without undue risk. The partnerships have only begun to make an impact in this domain and we will witness a lot of interesting partnerships coming up in the near future, that will in turn build a conducive ecosystem for the digital economy to reach out to every part of the country.

Risks and Data Security

Talking about risks brings up two factors: cybersecurity and data security. Cyber-attacks are rising as online transactions keep soaring daily. Also, cybercrime is evolving in size, statistics and complexity. And the threat can emanate from outsiders – or insiders. Besides, with systems being exposed to varied stakeholders, the threats/attacks too can be multifarious. In such scenarios, a sustained drive is required to pre-empt attacks from any quarter even while identifying employees who are compromised, inadvertently or otherwise.   

Nonetheless, considering the shortfall in cybersecurity experts, plugging these gaps through human resources may take time. Again, AI can play a critical role in securing payment gateways by speedily trawling through massive mounds of data, pinpointing patterns of malicious behaviour. In case in-house talent exists for cybersecurity assignments but are currently engaged in other non-critical or repetitive tasks, robotic process automation or RPA can be enlisted in freeing such resources. Of course, RPA can open other vulnerabilities but these could again be addressed through AI. 

Clearly, cybersecurity requires constant monitoring and focus to eliminate or minimise transaction vulnerabilities. Apart from creating tech firewalls, a strong second rung of cybersecurity controls is important so sensitive customer data is safeguarded 24x7x365. 

In the world of financial services, data is the key. It is imperative that all customer data is stored safely to ensure there are no frauds. Recently, a directive issued by Reserve Bank of India (RBI) has asked all payment companies to ensure that all their data is stored in India. The new directive is applicable to companies which are born in India and are building the relevant infrastructure for financial services or payments companies, and companies which hold licenses in India for operating any form of payment system, including a mobile wallet, payment processing, BBPS, or newer financial service products like loans, investments or insurance. RBI has asked the companies to ensure it has unfettered access to all payment data for supervisory purposes. This is a great move and will go a long way in building consumer trust in the digital payment ecosystem. It will be very impactful and help to further strengthen the ecosystem, increase capabilities, and also give consumers the much needed confidence to do financial transactions digitally. MobiKwik has always been a responsible financial services brand. It understands the importance of maintaining high levels of security standards & puts this at the center of all user interactions on the platform. All our data rests in India itself. For us, security is not just a state; it’s a process which is applied in every new feature upgrade or in case of any new product development.

To sum it up, this is just tip of the iceberg and I sincerely believe that the fintech industry is destined to scale new heights as we continue our journey to become a digital economy. However, the level of success enjoyed by fintech companies will depend largely on the degree of seamless, secure transactions they are offering to the customers.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house

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