From Traditional Banking To FinTech Integration: A Roadmap For C-Suite Executives

FinTech companies in India have been making significant strides in revolutionizing businesses. India is the third largest FinTech market in the world and is projected to score $200 Bn in revenues over the next decade, as per an EY report. These FinTech companies are now an integral part of the economy within the financial services domain with offerings like payment gateways, and unique lending solutions like small-ticket personal loans, and BNPL (buy now, pay later). Established players are gradually moving towards card issuance, asset management, and insurance sectors. Given their scale of operations and variety of operations, FinTech companies are blurring the lines between them and traditional banks.

In this blog, we will discuss the differences between FinTech companies and banks, and how C-suite executives must navigate the evolution from traditional banking to FinTech integration.

FinTech companies vs traditional banks

The primary distinction between the two is that FinTech companies are digital-first financial service providers, while traditional banks rely on physical presence to sell their offerings. FinTech firms facilitate convenience, flexibility, and a user-friendly approach to enhance the banking experience. Because of technology, these companies can innovate faster to democratize access to financial services. In contrast, traditional banking institutes are focused on stability and conventional methods of offering services. They prioritize in-person interactions and believe in building personal bonds with the customers.

Based on the pace at which FinTech companies have scaled over the last few years, they have carved a niche for themselves within the financial services sector. Leveraging AI/ML and other emerging technologies has helped businesses transform a range of financial practices. Some of them are:

Disruptive Impact of FinTech Companies for Businesses

For SMEs and enterprises alike, FinTech companies have transformed the way they do business through financial inclusion, expense management, compliance, and data analytics. Let’s explore in detail how technology has disrupted traditional banks with new-age financial services firms offering innovative solutions.

Smooth Path to Regulation and Compliance

Compliance issues usually happen due to oversight or human bias. However, FinTech companies allow businesses to include compliance and regulatory requirements within the automated workflows. All that C-Suite executives need to do is establish clear policies and frameworks, which should then be configured within the digital solution for consistent implementation.

For example, in spend management platforms, companies can integrate expense policies via controls like spending limits and category restrictions.

Facilitating Financial Inclusion for Underserved

In India, a large section of startups remain unbanked or underserved owing to the stringent regulations of traditional banking practices. Because of this, they fail to leverage the financial services that can accelerate the growth of these companies. FinTech companies could challenge the status quo by empowering entrepreneurs through its branchless approach. It helped these businesses connect with the economy and build financial resilience.

Streamlined Digital Payments and Mobile Banking

Digital payments are by far the most revolutionary financial innovation in the FinTech industry. Through user-friendly interfaces, the FinTech companies have made contactless payments a norm. Businesses of all sizes and types are leveraging digital payments and mobile banking for independent money transfers. 

Access to Lending and Credit Services

For most startups, access to financial solutions like loans and credit cards has been a challenging task due to the strict eligibility criteria. These businesses have to prove their creditworthiness and age of business before they can qualify for credit services. But with FinTech companies designing innovative solutions like business credit cards and short-term credit lines, startups are finding new alternate funding options. They allow these businesses to build credit history before they can seek larger lending opportunities.

Data and AI-driven Innovations for Growth Strategies

Leveraging data analytics and insights has now become a common business practice, thanks to FinTech companies making AI/ML an achievable technology. They have been integrating predictive models and intelligent workflows within the software that allow businesses to uncover customer behavior and industry patterns. FinTech has empowered businesses to be resilient to change while being bullish on growth.

Zaggle: One Partner for Comprehensive FinTech Transformation

FinTech companies brought in much-needed disruption in the Indian market to facilitate the growth of startups. They have empowered enterprises with a range of AI-powered financial solutions. Zaggle, one of the few listed profitable SaaS-based FinTech unicorns in India, has built a suite of fintech platforms to enable SMEs and enterprises to leverage AI technologies for seamless growth and efficient cash flow management. Its highly interoperable product suite includes

• Spend management and embedded finance platform, Zaggle Zoyer
• Employee flexi benefits automation solution, Zaggle Save
• Employee and channel partner incentive management tool, Zaggle Propel
• Integrated credit cards and real-time data analytics solution, Zaggle ZatiX

Talk to our experts to see how Zaggle can help your business expand.