The Indian BFSI sector: Factors driving it towards digitalisation

The BFSI (Banking, Financial Services, and Insurance) sector has transformed on a global level and is now being driven by technology. The financial service industry of India has also witnessed a massive boom in just a few years owing to the rise of digital transactions. Note that this momentum is expected to expand further with over half of the globe’s population expected to access banking services digitally by 2026. Read on to understand what BFSI means, and what factors are transforming the BFSI sector to attain economic growth and upliftment. 

What does the BFSI industry mean?
 

The BFSI industry provides banking, financial services and insurance products as per customer needs. Under the BFSI sector, there are universal banks and companies that offer a range of financial products and services. Fundamentally, BFSI comprises of insurance companies, commercial banks, cooperatives, non-banking financial companies, and other small financial entities. 

Now that you are aware of what the BFSI sector means, let’s proceed with why this sector is geared up for progressive transformation.

Revolution of the BFSI sector
 

Digitisation is the primary factor responsible for the BFSI revolution. Digitising refers to converting anything to digital form, which presently is paper-based or manual. However, digitalising is an entirely unique way of thinking. Such revolutionary processes allow financial institutions to traverse and experiment with business processes and technologies like artificial intelligence, cyber security, blockchain, and robotic process automation to form prudent BFSI services.

While digitalisation assures cost efficiency and robust security, its real potential lies in providing value to you as a customer. To sum this up accurately, digital banking is designed to make your life simpler and easier. Through this, you can manage all your finances in a single place, set up automatic payments and make deposits from anywhere and at any time without the requirement of physically visiting the bank.

Important drivers of transformation for the BFSI sector
 

Here are crucial factors that are rapidly transforming the Indian BFSI sector –

Cognitive analytics and artificial intelligence
 

Cognitive analytics and machine learning are the present-age tools facilitating data-driven decisions and information discovery across all industry sectors. Such technologies place great emphasis on data. For this, they process and examine data to extract insights from complex data sets. Artificial technologies look to connect the gap between big data insights and actionable decision-making.

As the BFSI industry is backed by massive data, it is a prudent ground for using cognitive analytics. Cognitive analytics can present valuable insights from unorganised data like industry reports, financial news, company data, etc., through machine learning, predictive analytics, and deep learning.  With such insights, BFSI sectors can form customised services for the target audience and encourage customer brand engagement.

Blockchain
 

While blockchain is an emerging technology, it has created several changes in the BFSI industry. RBI believes blockchain technology holds massive potential for improving the financial and banking markets. As reciprocity is vital for the successful implementation of blockchain, financial institutions are encouraging collaboration with Fintech specialising in the domain of blockchain.

RPA (robotic process automation)
 

RPA imitates actions that depend on simple rule-based processes performed by humans. This system interacts at the user interface level to successfully mimic the same steps, as anyone working on multiple applications. RPA is cost-effective, scalable, and simple to implement. Up until now, RPA has stayed conducive to the BFSI sector’s growth. Here are 3 crucial points to support this claim.

1.      RPA can help in improving case management, increasing productivity of banks globally and addressing various dilemmas linked with case backlogs.

2.      For annuity and insurance firms, RPA can improve the experience of customers by indexing the turnarounds through digital interaction.

3.      RPA can assist in lowering manual mistakes, thus ameliorating the quality of financial products and services.

There has been a massive shift in the BFSI sector in India owing to digitalisation. By implementing the latest technology, IDFC FIRST Bank ensures that its customers have access to all online banking services that can help in utilising their time more effectively. 

Disclaimer

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