Fintech grownups: Experience meets innovation - Hindustan Times

Fintech grownups: Experience meets innovation

ByHindustan Times
Oct 31, 2023 11:33 AM IST

This article is authored by Sheenam Ohrie, managing director, Broadridge Financial Solutions, India.

We live in an era of continuous opportunity and transformation as innovations like blockchain, Artificial Intelligence and the cloud rewrite how people transact, work, commute and live. One sector, however, that has been at the forefront of these transformative technologies is the fintech ecosystem – demonstrated strongly by the exponential growth trajectory of the fintech industry, which is projected to reach a global market size of $200 billion in 2030, growing by $140 billion over a 10-year period. A significant portion of this growth will be fuelled by the Indian fintech market, which is the 3rd largest in the world and also the fastest-growing market. With a compound annual growth rate (CAGR) of 20%, India has the highest count of fintech companies that have emerged in the last three years.

Fintech(Getty Images/iStockphoto) PREMIUM
Fintech(Getty Images/iStockphoto)

The history of financial services is also intertwined with the history of computing: from the introduction of technologies like bank mainframe computers in the 1950s to the development of blockchain today. The fintech industry has numerous companies with a long track record of offering their clients value by being not just early adopters, but drivers of technological innovation. With benefits like first-mover advantage and a deep history of client engagement, these fintech grownups are thus ideally situated to understand key market challenges and deliver intelligent solutions.

The fintech industry's growth has been driven by advancements in AI, blockchain, cloud computing and various other digital technologies. Together with environmental, social, and governance (ESG) initiatives, these form the pillars of progress for the fintech sector, or the ABCDE of fintech.

Finance organisations understand that next-generation technologies like the above are a driving force for slow transformation, efficiency, and industry disruption. A common myth is that disruption is where startups shine and conquer. Their ability to be agile, to experiment and fail early, and to be able to leverage cutting edge technology gives them a niche advantage. But fintech grownups have a certain added expertise to further leverage these technologies. Let me explain this with a few examples.

Take AI, for instance, machine learning models require significant amounts of training data to become successful. Fintech grownups that have been in the market for a long time and cornered a first-mover advantage, will be able to create more robust solutions based purely on the fact that they have rich data and are able to make more informed decisions. Creating data products that enable their customers to deliver personalised insights and make right decisions can be extremely powerful.

Another advantage that fintech grownups enjoy are network effects. Blockchain and smart contracts can be used to create solutions like distributed ledger technologies (DLT) that can help streamline the market and trading of certain commodities. A distributed ledger repo (DLR) platform can mutualise disparate systems of separate financial institutions and offers many benefits including the ability to execute intraday trades, enjoy flexible settlement times that can be agreed upon between counterparties among others. But the success of DLT is also contingent on onboarding enough organisations and counterparties on the platform. Fintech grownups not only have the established client base to expedite this but have the credibility and experience to do so in a way that is attractive to companies.

The maturity of fintech grownups like Broadridge plays a crucial role in their ability to flourish in the market and meet clients' evolving demands. Several key aspects contribute to their success:

· Domain and technology expertise: Fintech grownups possess deep domain knowledge and expertise in both financial services and technology. They understand the intricacies of the industry and stay abreast of the latest technological advancements. While it is comparatively easier to find expertise in either finance or in tech, finding organisations with both is rare. This expertise enables fintech grownups to develop solutions that are tailored to the specific needs of financial institutions and deliver tangible value.

· Crafting and delivering to the future: Fintech grownups exhibit a forward-thinking mindset, embracing innovation and change. They have a clear vision for the future and are willing to take calculated risks to drive industry transformation. More importantly, fintech grownups differentiate themselves through their mindsets. They understand that fintech is as much about new possibilities unlocked by niche technologies as it is about delivering stable transaction processing to their customer. They have a unique ability to leverage their vast domain expertise, customer insights and collective industry experience to drive industry mindset shift.

· Powerful & inclusive culture: Associates in any organisation are the backbone of delivering innovation and transformation that lead to customer delight and shareholder happiness. All companies, therefore, need to invest in a culture of innovation, collaboration and agility as employees that think creatively and experiment with new ideas are better suited to adapt quickly to changes in the market. This dynamic work culture attracts top talent, ensure talent retention and hence, facilitates the development of cutting-edge solutions. Fintech grownups have the ability to create strong associate networks that organically foster and build a conducive culture.

· Availability of resources: Fintech grownups have access to a set of very diverse resources, including technology and domain partnerships, industry experts, customers, investors, and board members. These enable them to invest with great clarity and strategy in research and development, acquire niche technology skills, and forge strategic alliances - giving them a distinct competitive edge.

The fintech industry has experienced remarkable growth and transformation globally, with India emerging as a key player in the ecosystem. Fintech grownups have played a pivotal role in driving this evolution by harnessing technology and domain expertise to solve market challenges. With a deep understanding of AI, blockchain, cloud computing, digital transformation, and ESG initiatives, fintech grownups are well-positioned to shape the future of the financial industry.

As the pace of change accelerates, fintech grownups will continue to lead the way by providing the quintessential balance between providing stable products to their customers, ensuring that all regulatory requirements are complied with, and creating innovative solutions that enhance efficiency, security, and customer experience.

This article is authored by Sheenam Ohrie, managing director, Broadridge Financial Solutions, India.

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