Digital Economy: Reliable and secure payment services

76% of adults have an account with a bank, other financial institution, or mobile money provider, up from 68% in 2017 and 51% in 2011, according to the Global Findex 2021 database (World Bank Org.). This significant increase can be attributed to the Covid-19 pandemic.

This suggests the digital economy is growing rapidly, and banks will need to innovate to keep pace with changing lifestyles, evolving business processes, and emerging technologies. They will need to focus on the reliability and security of payment services, particularly against cyber-attacks, and ensure that operations are lean and cost-optimized. This may lead to an increase in outsourcing non-core activities to third parties or managed services.

We spoke to Ms. Lini Susan John, Head of Marketing, Zuci Systems to understand the digital economy world and the benefits of RPA, and more.

AI implementation for NPA management in the BFSI sector

AI and Data Analytics can significantly reduce the level of rising NPAs by assisting in the identification of creditworthy customers and the creation of a strong loan profile. AI-powered technologies will help integrate data, which will in turn enable bankers to make lending decisions for individuals and firms, based on credit scores.

Data on transactions and payment history from financial institutions form the basis of most credit scoring models. These models utilize tools based on the concept of ‘machine learning to generate credit scores through regression and statistical analysis with various data sources, including social media activity, mobile phone use, and text message activity. This provides a more detailed view of creditworthiness and improves the accuracy of loan ratings.

Applying machine learning algorithms to this new data allows for the assessment of qualitative factors such as consumer behaviour, willingness to pay, and payment history terms. The ability to leverage this additional data allows for better segmentation of borrower quality, leading to quicker credit decisions. This not only enhances credit quality but also helps speed up the disposal of applications received. This will prevent accounts from being converted into NPAs.

Embracing the mobile-first, digital-first ecosystem

5G is anticipated to affect information security, machine learning, IoT, data management system, etc., all of which are used by fintech companies to a great extent. In the Banking and Financial Services industry, 5G will be most useful in making communications more secure, processing real-time information, and improving customer experience.

The potential of 5G in the Indian banking and fintech domain is immense as the arrival of 5G coincides with a boom in Internet of Things (IoT) devices, including smartphones and wearables. This will assist banks and fintech firms to make seamless financial transactions, innovate, and provide security services to their customers. 5G services may be effective in capturing how sentiment analysis can be used to gain more customer understanding.

These technology advancements will also offer banks an extensive range of customer engagement tools delivered on the most connected network coverage. There is no doubt that 5G will bring innovative and better services apart from bringing more digital-savvy users to the banking industry.

RPA (Robotic Process Automation): Changing the face of the BFSI sector

RPA has the potential to change the Banking, Financial Services, and Insurance sectors by automating various processes, such as the bank reconciliation process, loan application process, customer onboarding, and account management system alerts, to name a few.

RPA is a form of artificial intelligence (AI) that can automate high-volume manual tasks, providing better customer service, reducing processing time, and increasing accuracy. RPA can also help to improve compliance with regulatory requirements and can drive down costs, drive efficiencies and optimize processes.

In addition, the BFSI sector is under pressure to reduce costs, improve efficiencies, and meet stringent regulations. In this highly competitive environment, the implementation of RPA can help firms in the BFSI sector gain a competitive edge.