Being in a pandemic not only changes the way we work, and go about our day to day activities, but it also changes the way we see things. While India continues to be in lockdown, different sectors in the Indian landscape have faced the heat. India went into lockdown on the 25th of March. This was done to mitigate the adverse effects of the deadly pandemic, COVID-19. But, as many of them saw it coming, this also took a bitter toll on the economy with its impact leaving a major setback that can be seen for years to come. But, if there is one sector that has seen an upward shift during this setback, it has to be in the way digital transformation across different channels and business points has been galvanized like never before. This shift was further propelled with the world’s demand for organizational agility wherein ties with the customer are long-drawn and can be accessed at any given point in time. 

Embracing this digital revolution in full swing are the banking and finance sectors. Being the pillars of the modern economy, the banking and finance sectors have seen a surge in digital adoption and offerings. While digital technologies aren’t new in the banking sector, the pandemic has put the adoption on fast-track, with an influence that can be seen in the years to come. The pandemic has also served as a gateway for fintech service providers in the country to expand and offer tailored solutions. 

The surge of fintech can be attributed to a non-changing conventional financial environment, and in today’s day and age with rising challenges to perform business operations, we will see numerous new-age fintech players sprout up taking advantage of this situation by offering high-impact, relevant solutions. This can be further bolstered by India’s dependence on digital-led financial solutions like e-wallets, UPI, credit/debit cards, thanks to these solutions helping people meet their financial obligations without stepping out of anywhere. But where else are we going to see this fintech revolution unfold? Let’s find out.

Bridging the financing gap for small businesses 

Big conglomerates and multinationals are influential in deciding the state of the economy, but it’s the small and medium enterprises (SMEs) that drive the economy across the world. They contribute massively to a country’s GDP while providing humongous working opportunities for the people. India stands as a prime example where it has more than 50 million SMEs, that contribute to a staggering 38% of the GDP. Though the contribution is applause-worthy, the same cannot be said about the support they receive from banks or other financial institutions. More than often, these enterprises find it extremely difficult to find a line of credit to continue or expand their operations. At times when credit is made available, they are expected to go through cumbersome processes for approvals, making it increasingly difficult for these players to take the risk that could eventually reap greater rewards. 

While everyone assumed there wasn’t an alternative, a sliver of hope came in the form of a digital revolution. Fintech solution providers entered the market, where they transformed the lending space by using non-traditional sources that are powered by data and digital technologies to make financing available to business owners. This surge and penetration in a country like India was so welcome, that even traditional banking institutions have now partnered with these fintech service providers like Easebuzz to cater to a larger audience. 

But the pandemic has thrown a spanner in the works. Like always, the small and medium enterprises have been the first to face the brunt of the lockdown, wherein their business operations were completely shut for months together. This has halted cash flow, expansion objectives and other pivotal business decisions. But, with the world slowly unlocking into the new normal, one can expect business to bounce back in a way that was never seen before. And ready to help these businesses in the financial space are the various fintech solution providers like Easebuzz in India. This indeed marks an exciting time for the digital financial revolution that is going to spread in the country. 

The surge of digital payment and remittance platforms 

Digital technology has been pivotal in accelerating India’s economic growth. A factor aiding in this venture are how remittances have increased multifold. We live in a time where internal remittances have gone beyond external remittances. This can be attributed to the growing infrastructure of financial services in the country. In a country, where more than half of the working force lives away from their native homes, remittances have seen a tremendous surge. A significant factor aiding this is the growing financial literacy and digital awareness. 

This has led to individuals from all walks of life quashing myths that have plagued the Indian digital financial landscape for years. People have started to realize that there are no additional costs that are involved when one transfers funds through digital means. Digital solutions also provide a quick and secure medium to transfer funds without any hassles. They are also advantageous since one need not involve a third person to validate the transaction, making sure it is secure on every front. With fintech solutions in India on the rise, individuals are also realizing that remittances through digital platforms are not complicated on any front. 

The biggest hurdle fintech solutions in India face are the social and cultural attitudes that have been present for years. In the post-pandemic era, fintech solution providers in India will look at empowering every sector of the Indian diaspora with financial literacy, making everyone aware of the comprehensive benefits with its widespread potential. 

Helping financial providers operate online

Fintech services have the power to maximize economies, while lowering costs, without compromising on security, speed, or transparency. This unique nature allows it to be more customizable and tailored to the needs of any individual. The current pandemic has shed light on the need to keep financial systems functioning, while keeping people safe, during this time of social distancing. This is further accentuated with the rising financial uncertainty, reduced input supply, and changing credit conditions. Fintech solutions in India are bridging this gap by providing all the traditional financial services online, without the need for an individual to step out of their home. It is also ensuring all the regulatory and legal frameworks are adhered to while the financial services are offered without any compromises. 

Fintech solutions are aiding governments in securely reaching people in need with financial assistance through cash transfers. It is also helping them reach businesses that need emergency liquidity opportunities, which wasn’t available earlier. The crisis has also highlighted the advantages of fintech solutions in India, where it is allowing people to achieve sustainable financial goals. Fintech, through its operation online can also be useful during a health emergency as seen in our country with different disasters striking earlier this year. It can also viably support economic recovery and ease the transition to economic growth from the situation we are in currently. 

A transformation in the labor-intensive market

It’s fair to say that the unregulated labor market across the agricultural sector and its ancillaries have been the worst hit due to the COVID-19 pandemic. The workforce in this sector relies on physically visiting lenders, to get cash in return that can help their operations. Cash is also the primary mode of payment across employees, vendors, traders, and most of the parties involved. While fintech organizations have been trying to tap into this colossal market, the market’s use of feature phones, or smartphones for purely entertainment purposes has hindered the development. However, a big change in this sector is right across the horizon. With Jio entering the mobile landscape, by introducing pocket-friendly smartphones with an internet connection that would eventually replace the feature phones, we can anticipate the idea of digital payment adoption across rural areas surge.

The functioning of microfinance institutions

MFIs and NBFCs across the country have conventionally not only relied on physical cash but have also needed physical presence for approval, verification, or for disbursement processes. With the new dynamics in play, where social interactions are limited and social distancing has become a norm, fintech finds its way into the ecosystem seamlessly. Automating physical and manual processes with almost no physical interactions, fintech solution provider(s) are looking at changing the dynamics of MFIs and NBFCs in the country. They have also found in-roads to provide their services to startups at a much lower cost than a traditional name, with a better and quicker turnaround.

The transformation of the on-demand economy

E-commerce was the first to embrace the fintech revolution, and it has revolutionized the e-commerce landscape of the country. This revolution has had an adverse impact on the retail footprint of the country. To make matters worse, the implementation of the lockdown along with people’s awareness pertaining to hygiene, and social distancing means that the retail industry has a mountain to climb. Both in the essential and non-essential commodities sectors. With every business realizing that having an e-commerce presence is a must, fintech startups and fintech solution providers are bound to make inroads and create a tidal shift in the payment behavior of the people.

Conclusion

As anticipated, the pandemic is bound to redefine the digital landscape. Customer behavior and their interactions are changing at an unprecedented rate and are bound to evolve with the digital transformation. Fintech solution providers in India are also coming to terms that it is not just about digitizing the financial offerings, but about looking at the entire value chain that entails everything from the consumer’s journey to the merchants. The fintech revolution will also look at creating a collaborative ecosystem that uses a digital transformation to make banking and payment systems accessible to every individual. 

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