After the setback of the past two years due to the pandemic, the current year has been showing the rays of hope. Normalcy is returning and the economic activities are gaining momentum. Experts are predicting that the use of technology in day-to-day life and digital transactions will grow rapidly this year however the financial institutions will have to ensure the protection of common users from online frauds. Before the pandemic, artificial intelligence (AI) did not have much role in the normal functioning of banks and other financial institutions. But the lockdowns changed the trend. Online banking and Net banking eventually became transformative measures in finance. Digital banking is not just about going paperless or cashless, but it has brought more convenience and freedom to the people with the help of technology. Those days are gone when visiting a bank was necessary to withdraw, deposit or transfer money from one’s own or others accounts. With the arrival of financial technology (fintech) startups like Paytm, GooglePay and PhonePay, financial transactions have become a few seconds job only. Your mobile has turned into a bank. With the introduction of AI in the banking sector, things have improved faster.
Dr Hemant Garg, Nodal Officer at the International Financial Services Centers Authority (IFSCA), believes that cryptocurrencies and crypto-assets powered by decentralised blockchain technology across the world will evolve and become popular in the same way as social media evolved and showed a quantum jump from what it was in 2015. The government is in the process of releasing Blockchain CBDC (Central Bank Digital Currency) as the only legal tender or blockchain-based cryptocurrency. But by imposing a 30 per cent tax on crypto assets sale and purchase, it has initiated the process of recognising the technology and its beneficial trends for government revenue and a step towards recognising user transactions regarding crypto assets in India. In the coming times, the focus of Indian Fintechs will be on securely speeding up the payment process and financial transactions with the help of technologies like Blockchain, Quantum Computing etc. Financial Institutions like banks are now looking for technology partners for themselves. For example, HDFC Bank issued a special credit card in association with Paytm.
Joint products of banks and technology firms are a good sign of the progress of FinTech, but banks will have to make every effort to stop online fraud. Only then will the real benefit of Fintech be available to the common man, feels Dr Garg, who recently made India proud by successfully managing the Infinity Forum, an international FinTech event, inaugurated by Prime Minister Narendra Modi and addressed by several business leaders from across the globe, including Reliance Chairman Mukesh Ambani, Infosys co-founder Nandan Nilekani, and Soft bank CEO Masayashi Son, to name a few. The Infinity Forum 1.0 was organized in collaboration with NITI Aayog, Invest India, FICCI and NASSCOM. The AI-backed fintech solutions will further improve financial transactions. A lot more is in the pipeline and things will unfold one by one in the coming time, however, the core concern remains the same, that is how to control online financial frauds. Banks need to make people aware of digital frauds and ways to avoid them.