A Guide to Navigating the 2024 Technology Landscape of BFSI & NBFC in India

The Banking, Financial Services and Insurance (BFSI) sector, alongside Non-Banking Financial Companies (NBFCs), is undergoing a period of tremendous transformation in India. Driven by factors like digital adoption, regulatory changes, and the rise of fintech, staying ahead of the innovation curve requires navigating a complex technological landscape. This guide explores some key trends shaping the BFSI & NBFC tech space in 2024 and offers insights for navigating this dynamic environment.

Top 10 Technology Trends in 2024:

1. Artificial Intelligence (AI) and Machine Learning (ML): AI and ML are revolutionizing how these institutions operate. According to Gartner predictions report, it is said that by 2026, 75% of businesses will use generative AI to create synthetic customer data. From fraud detection and risk management to personalized customer experiences and loan underwriting, AI is streamlining processes and operations by enhancing decision-making capabilities. ML models leverage historical data and predictive analytics to assess credit worthiness swiftly and accurately, expediting the lending process at reduced risk.
2. Cloud Adoption: Cloud computing offers scalability, agility, and cost-effectiveness. Migrating to the cloud enables institutions to deploy innovative solutions faster and leverage advanced analytics for better customer insights, and focus on their core business priorities without the burden of managing infrastructure. A recent survey stated that 83% of financial services companies already use cloud infrastructure in some capacity, and 38% choose hybrid cloud with single and multi-cloud solutions. It is highly possible that by 2026, 70% of leading banks will increase their cloud spend.
3. Open Banking and APIs: Open Banking regulations are fostering collaboration within the financial ecosystem. By leveraging APIs to integrate with third-party fintech solutions, these financial institutions can expand their service offerings beyond traditional boundaries, enhance customer experiences, and drive innovation across multiple touchpoints, ultimately delivering greater value to customers in the digital age.
4. Open Network for Digital Commerce (ONDC): The emergence of ONDC presents a significant opportunity for BFSI & NBFC institutions. Integrating with the ONDC ecosystem, institutions can offer financial services like microloans and payment processing to a wider range of merchants and consumers. Supporting this trend Government of India (GoI) has brought in initiatives to target registering 900 million buyers & 1.2 million sellers on the ONDC platform and generate USD 48 billion gross merchandise value (GMV) for the next 5 years.
5. Cybersecurity: As financial institutions become increasingly reliant on technology, cybersecurity threats become more sophisticated, according to CERT-In, India’s financial sector faces on an average of 4,400 cyber-attacks daily. Implementing robust security measures is paramount to protecting sensitive customer data and ensuring business continuity. Strengthening risk planning against unforeseen fraud with AI and automation tools which can analyse synthetic data to identify emerging threats and continuously update detection algorithms to stay ahead of fraudsters.
6. RegTech: Regulatory compliance is an ongoing challenge for BFSI & NBFC institutions. In 2022-2023, India’s regulatory framework saw 5,986 updates, averaging over 16 updates per day. RegTech solutions powered by AI and automation can streamline compliance processes, better financial reporting data models, reduce costs, and minimize regulatory penalties.
7. Customer Experience: In today’s competitive landscape, delivering a seamless and personalized customer experience is crucial. Embracing omnichannel strategies, chatbots and AI-powered virtual assistants, can elevate customer engagement, drive operational efficiency, and gain a competitive advantage, ultimately positioning themselves for long-term success in the dynamic and evolving financial services industry.
8. Advanced UPI: Indian Payment landscape is witnessing a rapid evolution with 59% increase in volume and 45% increase in value of UPI transactions compared to 2022. The emergence of UPI Lite, UPI Tap & Pay, and UPI Credit lines signifies a paradigm shift in the way payments are made and processed in India. These new features offer enhanced convenience, speed, and flexibility to users, empowering them with seamless payment experiences across various channels and devices. BFSI & NBFC institutions need to adopt these trends to stay relevant.
9. Marketing Technology (MarTech): Marking advancement in India fuelled by technology like Machine learning (ML), natural language processing (NLP), large language models (LLMs), and deep learning are fundamentally changing how institutions engage with customers, analyse data, and extract valuable insights.
10. Hyper-personalization: In a digital-first landscape, where according to a study, 86% of customers are willing to share their data for a more personalized banking experience. Hyper-personalization in BFSI and NBFCs not only enhances customer satisfaction but also fosters deeper engagement and loyalty, driving sustainable growth and differentiation in a competitive market. Through advanced algorithms and machine learning, these banks analyse vast datasets to understand individual preferences, behaviours, and needs, delivering highly targeted and relevant services and recommendations

Navigating the Landscape:

• Identify Your Needs: Carefully assess your institution’s specific needs and challenges. What are your pain points? What are your strategic goals? Understanding your priorities will guide your technology selection process.
• Embrace Innovation: Don’t be afraid to experiment with new technologies. Pilot projects and proof-of-concepts can help you evaluate the potential benefits of emerging solutions before full-scale implementation. Consider establishing Centres of Excellence (CoEs) to embrace experimentation in a controlled manner, maximizing benefits.
• Prioritize Security: Cybersecurity should be at the forefront of your technology considerations. Invest in robust security solutions and ensure your systems are compliant with data privacy regulations.
• Build a Strong Technology Partner: Partner with a reliable technology solutions provider who understands the BFSI & NBFC landscape. Look for a partner who can offer domain expertise, comprehensive solutions, implementation proficiency, and ongoing support.

Maveric Systems – Your Partner in Success

Maveric Systems is a leading provider of IT solutions specifically for the BFSI & NBFC sector. With our deep domain expertise and a comprehensive portfolio of AI-powered solutions, we can help your institution navigate the evolving technological landscape. We offer solutions for:

• Customer Experience
• Process Excellence
• Regulatory & Compliance
• New Age Application Management System
• Assurance

Contact us at indiasales@maveric-systems.com to initiate a conversation about your unique requirements. Let’s explore together how we can tailor our solutions to meet your specific needs effectively.

Author:

Nivedha Ganeshan is an Associate Manager – India Sales handling Client engagements, at Maveric Systems.