Customers Prioritise Personalisation Over Brand Name, Says Experts

Many fintech businesses are leveraging the meteoric rise of open banking in the financial sector. Through open-source application programming interfaces (APIs), banks and other financial institutions engage in the practice of "open banking," which grants third-party financial service providers access to consumer data such as bank account details, transaction histories, spending patterns, and credit reports.

Speaking at the 3rd edition of the BW Businessworld Festival of Fintech, Deena Jacob, Co-founder and CFO of Open, stated that policies such as demonetisation, the implementation of the Goods and Services Tax (GST), and increased internet penetration across the country have facilitated the shift to a digital economy for businesses, including fintechs and banks.

In the past, customers had to visit various desks to get their documents approved at banks. However, Aishwarya Jaishankar, Co-founder and COO of Hyperface Technologies, explained that today, banks can contextualise their services and reach customers directly, eliminating the need for customers to visit physical branches. She also mentioned that older banking systems were not designed with APIs in mind.

For instance, in India, the Unified Payments Interface (UPI) has become the most widely used payment method. In 2022, over 50 billion transactions worth more than USD 3 trillion were processed using UPI, surpassing the combined volume of credit card and debit card transactions. UPI's convenience, widespread use, low cost, and government support have made it an appealing option for both consumers and businesses.

Hena Mehta, Co-founder and CEO, emphasises that customers nowadays prioritise personalised services and experiences over brand names.

Fintech companies are utilising technology to disrupt the traditional banking industry. These new-age companies provide consumers with innovative financial services that are practical, accessible, and cutting-edge. While banks still dominate the financial sector, fintech firms pose a growing threat to their market share.

Sabyasachi Senapati, Business Head of Trillion Loans, clarifies that there may be a perceived competition or friction between banks and fintech, but they are different entities. Banks operate under high regulatory standards, while fintechs face fewer compliance requirements.