Category: Banking

Welcome to our specialized banking category, an expertly curated space where we delve into the exciting world of digital transformation sweeping across the banking industry. Our insightful articles explore a multitude of facets that are actively shaping the future of banking, from the disruptive force of cutting-edge technologies to the shifting paradigms of customer expectations.

As the terrain of the sector undergoes continuous evolution, it becomes increasingly crucial for industry professionals, enthusiasts, and observers to keep abreast of the latest developments and trends. Our in-depth articles serve as a resource, providing valuable insights into how traditional banking institutions are navigating the transition to the digital age, and how emerging fintech companies are spearheading innovative solutions that are redefining the industry’s contours.

Our coverage encompasses a wide array of topics, from the convenience and the ubiquity of digital payments to the transformative impact of regulatory technology and the paramount importance of data security. This comprehensive exploration offers our readers a panoramic view of the digital banking ecosystem. Our overarching objective is to equip our readers with a nuanced understanding of the challenges that lie ahead, as well as the opportunities that digital transformation brings to the fore.

So, immerse yourself in our curated content, enrich your knowledge, spark meaningful conversations, and stay ahead of the curve in this digital banking era. Join us in exploring the captivating world of this sector where the only constant is change. Welcome to the future of banking, with us!

Cryptocurrencies

How Will Cryptocurrencies affect Fintech?

Posted on | by Signzian

In 2020 the world cryptocurrencies and blockchain market was estimated to be $1.49 billion. By 2030, it is expected to reach $4.94 billion, growing at a 12.8% CAGR from 2021 to 2030. Even with the current wavering scenarios, it is clear that they have an upward trajectory in the long run. Although cryptocurrencies haven’t achieved absolute consumer acceptance yet, there is little doubt that they will form an integral part of the financial ecosystem in the future.

Fintechs will likely be well impacted by multiple cryptocurrency availability and its adoption growth. Below we elaborate on how cryptocurrency, blockchain’s future, and the fintech industry are increasingly intertwined.

Decrypting Crypto

Cryptocurrencies are digital currencies not issued or regulated by any central authority, such as a federal or state government. Instead, they are generally stored in a more decentralized fashion. Some of these currencies, like Facebook’s Libra, are initially meant to be centralized, with long-term plans to be decentralized.

When a cryptocurrency is specifically decentralized (for example- Bitcoin), transactions are verified with the use of blockchain technology. Blockchain is a well-distributed, decentralized, accessible public ledger. In other words, it’s a public database of relevant digital information. Furthermore, the use of blockchain technology is a vitally secure mode of storing data as it is virtually near impossible to manipulate without significant detection.

Thus, cryptocurrencies are very secure virtual currencies with decentralized nature. As a result, they are not subject to government interference or regulation, as with traditional currencies.

Newer Fintech Industry Horizons With Cryptocurrencies

Cryptocurrencies are not well understood by the regular banking consumer residing in a country with a stabilized main currency. Therefore, unless the consumers are early adopters, they don’t have much incentive to primarily adopt crypto over the regular options and may even see the digital currencies as too risky.

However, cryptocurrencies are significantly more popular and have extensive adoption rates in regions of the world with multiple unstable currencies. A good example was when the bolivar experienced swift devaluation in Venezuela; many cryptocurrencies gained considerable access as a more stable and reliable option.

Cryptocurrencies are also specifically relevant to nearly 1 billion people across the globe. These people have mobile devices but may not have bank accounts. Being “unbanked,” they can’t use conventional financial products. But they can use those built on selected cryptocurrencies.

In both these cases, cryptocurrencies help open up newer markets where Fintechs find consumers who benefit from their products.

Better Money Transfers With Cryptocurrencies

One of the fintech consumers’ biggest complaints with conventional financial companies is the excruciatingly sluggish pace of transaction approval caused by the many layers of bureaucracy such approvals usually entail. Anyone who has tried to transfer money from one bank to another across borders is undoubtedly acquainted with how tiresome the process can be. Even transferring money between institutions in the same country is often riddled with delays and inefficiencies.

Because they are created on secure and decentralized public ledgers, cryptocurrencies can be taken back and forth much more swiftly than traditional currencies. This has the extra effect of considerably reducing transaction costs.

Transparency, speed, and convenience -are the cornerstones of any Fintech innovation, and cryptocurrencies are part of what makes it possible to create solutions based on the same principles.

Cryptocurrencies To Reduce Financial Fraud

Even as disruptors Fintechs face the exact issues around identity theft, fraud, and money laundering as any legacy financial company does, thwarting such hurdles is time-consuming, challenging, and labor intensive.

Because cryptocurrencies are created on distributed and decentralized ledgers, their specific transaction records are verified easily. Furthermore, provided the secure nature and use of blockchain technology, these particular records cannot be particularly manipulated or obscured, rendering fraud prevention a much less costly and tedious enterprise for Fintechs.

Fintech innovation has been an impactful disruptive force in the financial technology industry. Over the past decade, financial services and products have changed dramatically as Fintech solutions have offered consumers more appealing alternatives to traditional products.

Newer Paths In The Fintech Industry

In decades to come, cryptocurrencies will play a more significant role in forming emerging Fintech innovations by unlocking novel markets and supporting efficiency and convenience in all product offerings. However, it’s not just crypto that will transform the industry. Considering the rate at which innovation occurs in the fintech space, financial companies require the best products and services for their customers. It is vital to ensure that the customer is welcomed with a convenient yet secure onboarding experience. Check out Signzy’s AI-driven state-of-the-art customizable no-code resources to see what fits your needs.

About Signzy

Signzy is a market-leading platform that is redefining the speed, accuracy, and experience of how financial institutions are onboarding customers and businesses – using the digital medium. The company’s award-winning no-code GO platform delivers seamless, end-to-end, and multi-channel onboarding journeys while offering totally customizable workflows. In addition, it gives these players access to an aggregated marketplace of 240+ bespoke APIs that can be easily added to any workflow with simple widgets.

Signzy is enabling ten million+ end customer and business onboarding every month at a success rate of 99% while reducing the speed to market from 6 months to 3-4 weeks. It works with over 240+ FIs globally, including the 4 largest banks in India, a Top 3 acquiring bank in the US, and has a robust global partnership with Mastercard and Microsoft. The company’s product team is based out of Bengaluru and has a strong presence in Mumbai, New York, and Dubai.

Visit www.signzy.com for more information about us.

You can reach out to our team at reachout@signzy.com.

Written By:

Signzy

Written by an insightful Signzian intent on learning and sharing knowledge.

 

Who Regulates the NBFCs?- Supreme Court Settles The States’ Money Lending Laws Disparity With RBI

Posted on | by Signzian

 

Last week, the Supreme Court held that Non­-Banking Financial Companies (NBFCs) regulated by the Reserve Bank of India could not be regulated by individual state enactments.

A bench of Justices Ramasubramanian V and Hemant Gupta said NBFCs play a vital role in contributing to the country’s financial health, whose operations are controlled by RBI. Therefore, it said that the Reserve Bank of India has no say in such a relevant matter of vital interest. It would strike at the fundamentals of the statutory control vested in the Reserve Bank of India.

“It may be true that many times RBI may not be controlling the rate of interest charged by NBFCs on the loans advanced by them. It does not mean that they have no power to step in,” the bench said.

The Supreme Court examined whether Non-Banking Financial Companies regulated by the Reserve Bank of India could also be regulated by specific State enactments such as the Kerala Money Lenders Act, 1958 and the Gujarat Money Lenders Act, 2011.

The fact that the Chapter III­B of the RBI Act assigns a supervisory role for the Reserve Bank of India to oversee and regulate the NBFCs’ functioning, including all their activities, automatically comes under the scanner of the RBI. This applies to the NBFCs from their inception (registration) till the time of their commercial denouement (winding up/cancellation).

“As a consequence, the single aspect of taking care of the interest of the borrowers which is sought to be achieved by the State enactments gets subsumed in the provisions of Chapter III­B,” the bench said.

The Supreme court also said it believed that the Kerala Act and the Gujarat Act would not apply to all NBFCs registered under the RBI Act, which the RBI regulates.

Therefore, the bench stated that all the appeals the NBFCs filed against the Kerala High Court’s judgment are standing and allowed. Similarly, the appeals the State of Gujarat filed against the judgment of the Gujarat High Court are wholly dismissed.

What It Means

The statement by the Supreme Court comes as a massive breath of fresh air for NBFC in particular and the fintech industry as a whole. None of the RBI-regulated financial companies need to get tangled in multiple jurisdictions and unnecessary compliance complications. Contradictions between jurisprudence are also apparent and transparent.

Even then, financial companies still need to follow many regulatory compliances. For this, they need reliable fintech service providers to ensure good service. Signzy can get you the apt products and services you seek. With our customizable AI-driven API resources for KYC, Onboarding, etc., which are absolutely regulations compliant, you can make all your financial technology processes optimized to the best degree.

Key Takeaways

  • The Reserve Bank of India(RBI) will unequivocally regulate Non-banking financial companies (NBFCs), and state money-lending laws will have no applicability to them.
  • The verdict was that the Kerala Act and the Gujarat Act would have no application to the NBFCs registered under the RBI Act and regulated by the RBI.
  • No NBFC can begin or carry on business without obtaining a registration certificate under the RBI Act; their continuation in business would depend upon compliance with the RBI Act and circulars/directions issued by the RBI.
  • This is impactful news for NBFCs as this will help maneuver unnecessary bureaucratic hurdles.
  • It creates a strict differentiation between local money lenders and Non-Banking Financial Companies.

About Signzy

Signzy is a market-leading platform that is redefining the speed, accuracy, and experience of how financial institutions are onboarding customers and businesses – using the digital medium. The company’s award-winning no-code GO platform delivers seamless, end-to-end, and multi-channel onboarding journeys while offering totally customizable workflows. It gives these players access to an aggregated marketplace of 240+ bespoke APIs that can be easily added to any workflow with simple widgets.

Signzy is enabling ten million+ end customer and business onboarding every month at a success rate of 99% while reducing the speed to market from 6 months to 3-4 weeks. It works with over 240+ FIs globally, including the 4 largest banks in India, a Top 3 acquiring Bank in the US, and has a robust global partnership with Mastercard and Microsoft. The company’s product team is based out of Bengaluru, and it has a strong presence in Mumbai, New York, and Dubai.

Visit www.signzy.com for more information about us.

You can reach out to our team at reachout@signzy.com

Written By:

Signzy

Written by an insightful Signzian intent on learning and sharing knowledge.

Enriching eNACH -Impact on NBFCs, Banks, And Even Millennial Financing

Posted on | by Signzian

India’s lending industry stands at a staggering 156.9 lakh crores, a steep increase of 100% from 2017. But what many miss out on is that of these, only 2% involve microfinance contributions. Instead, commercial and Retail lending dominates 98% of this, with each at 49%.

Although almost every citizen will try to avail of a loan at a point in their life is true. It is an integral part of the economy and even a commoner’s aspirations. But the above data identifies two significant factors. One, customers prefer commercial and retail lending. Two, These areas are potentially untapped and improvable.

Once considered stormy waters, even personal loans are now being navigated at a growth rate 3.8 times higher. This is primarily due to easier access and availing procedures of loans in the country. As a result, even banks and NBFCs are modifying their gameplan to incorporate the novel surge in commercial and retail loans through digital banking.

But then, why is the government stressing on eNACH Mandates? Why are banks and NBFCs preferring the involvement of eNACH?

 

What’s The Real Concern?

As the tide rises, so does the seaweed. Financial Institutions reported an abnormal increase in loan repayment defaulters. Although COVID-19 played a significant role in this, the impact is also attributed to a sense of gullibility. Even genuine customers who accidentally default face the risk of lowered credit ratings.

Entities have increased their safety and security measures to stop defaulting, but that alone won’t cut it. We need an impeccable system of retrieval and processing. Electronic clearing service was a primitive form of this. Even though insufficiently effective, it paved the way to a better solution- eNACH Mandates.

 

The What, Why, And How Of eNACH Mandates.

eNACH mandate is an improved version of the existing NACH mandate. The NACH mandate helps the customer give the collecting agency the right to debit the respective amount from the account for a fixed period at a specific frequency. The agency is required to collect the mandate form from their customers to facilitate the process of auto-debit for personal loan EMIs.

eNACH mandates are the digital versions of paper-based NACH mandates. They allow customers to approve recurring payment charges in a go, digitally. This will enable merchants to collect recurring insurance premiums, loan repayments, investment SIPs, utility bills, etc.

This makes things far easier for customers, NBFCs, and banks. This is why financial institutions now focus more on creating eNACH mandates for loan EMI collection from the borrowers. In addition, innovative companies and pioneer entities in the industry aim to craft solutions engineered to help NBFCs streamline their loan repayment collections while ensuring the benefit for the customer.

 

What Are Its Advantages?

  • Decreased Time- The digitized nature coupled with the automated deduction and reduced human involvement fastens the process. Signing up for loans is also swift with eNACH.
  • Increased Success Rate- loan disbursement and retrieval are more successful as most of the process is automated and the entire process is digitized.
  • Higher Successful Processing Rate- Almost all technical and human errors are negated with a proper digital system in place. This implies that the processing is better and more efficient.
  • Reduced Number of Defaulters- Defaulters find it hard to abscond and not pay. As everything is automated, the agreed-upon amount will be deducted accordingly from their accounts.

 

How Does It Impact And What’s The Bottom Line for eNACH?

It’s pretty much evident that eNACH is the new phase of recurring collections. Banks, NBFCs, and other financial institutions are incorporating it. Even genuine customers prefer eNACH as it is swifter and easier for processing. Millennials form the lion’s share of this as they mostly prefer digitized payments. This is evident because they overwhelmingly choose digital bank accounts over traditional options. The next generations will only soar higher from this point onwards to the digital canopy. Millennial financing is definitely digital.

But all this will be possible only with the proper implementation of eNACH and its methods. For this, you require the best resource provider you can get. We at Signzy can help you with this. With premium resources and products for your digitization and automation, you can better your processes.

 

About Signzy

Signzy is a market-leading platform that is redefining the speed, accuracy, and experience of how financial institutions are onboarding customers and businesses – using the digital medium. The company’s award-winning no-code GO platform delivers seamless, end-to-end, and multi-channel onboarding journeys while offering totally customizable workflows. It gives these players access to an aggregated marketplace of 240+ bespoke APIs that can be easily added to any workflow with simple widgets.

Signzy is enabling ten million+ end customer and business onboarding every month at a success rate of 99% while reducing the speed to market from 6 months to 3-4 weeks. It works with over 240+ FIs globally, including the 4 largest banks in India, a Top 3 acquiring Bank in the US, and has a robust global partnership with Mastercard and Microsoft. The company’s product team is based out of Bengaluru, and it has a strong presence in Mumbai, New York, and Dubai.

Visit www.signzy.com for more information about us.

You can reach out to our team at reachout@signzy.com

Written By:

Signzy

Written by an insightful Signzian intent on learning and sharing knowledge.

Banking And Fintech In The Metaverse Of Finance

Posted on | by Signzian

Dolce and Gabbana had a peculiar sale last year. Their customers paid $5.7 million to the fashion conglomerate for basically… Nothing. Or that’s what people who do not understand virtual reality would say. In fact, the company sold primarily virtual products for customers to use in the Metaverse. This is why the Metaverse economy experienced retail sales of more than $20 billion with an annual growth rate of around 40%.

This is the mere beginning of using digital assets as a repository of value. It is the beginning of a digital renaissance, encompassing AR, VR, and other digital immersive technologies, which will lead to wide-scale adoption and regulations. Cryptocurrencies will also play a crucial role in this.

Financial institutions must secure their position in this enormous and novel part of the economy by incorporating Metaverse and crypto into their services and business models. This will lead them to a cryptocurrency-fueled metaverse economy.

As the metaverse users increase, financial transactions in the new realm will increase. The government will issue new regulatory guidelines in the coming future. But it is unwise not to adopt early. Banks and institutions should not wait for this. Instead, they should embrace the metaverse economy. Here are some of the ways in which this is possible.

Build And Leverage Trust

Customers usually trust banks more than even the government. This should be utilized in a positive fashion. Tap into the customers’ interests in crypto and digital assets. Despite the standard expectations, 45% of Boomers used cryptocurrencies to make a purchase, compared to the 30% of Zoomers, in 2021.

Mastercard is processing crypto payments and paving the way for other institutions to follow suit. Offering custody services and processing crypto payments help banks prepare for the digital future. Even mortgages, loans, etc., will have digital asset involvement. Banks and banking technology may also leverage their brand identity in user verification and risk management as more peer-to-peer crypto transactors want to trust authentic payment sources.

Metaverse Payment Platforms: Adopt The Boon

Metaverse virtual reality is all set to take over the shopping experience for customers. The fundamental fintech future will be altered to adopt the new paradigm. Financial institutions must process transactions on metaverse payment platforms to accommodate the customers and their needs. A trial pilot by Facebook, the Whatsapp digital wallet is the beginning of this transformation. It offers benefits like zero fees for international transfers, etc. 

These methods have so much potential and versatile applications. For example, such platforms will help fasten transactions and secure the customer’s safety and privacy. Moreover, the institutions can either provide such platforms or integrate the accounts into existing payment apps by utilizing their APIs. But it is noteworthy that most of these apps adapt to phones and screens and ARVR technology.

The metaverse economy is in the infant stage. But once it starts flying, the entire system will soar. This is the ripe time for banks and financial institutions to secure the fintech future. This is where banking technology ups its game a notch with payment platforms.

Integrate With AR And VR Platforms

Providing payment platforms in the new paradigm is essential. But banks need to do more than that. They need to integrate with the metaverse virtual reality. Banking technology must evolve to increase its presence in the Metaverse while ensuring that customers spend more time in it. 

This may be done in multiple ways:

  • Communications with customers- Include AR and VR where it is appropriate.
  • Increase Visual Presence- Transactional experiences should be encapsulating and immersive.
  • Explore the New Age Ads- Advertising is evolving along with technology. Digital billboards, avatars of celebrities, etc.

Banks In The Metaverse

The future of fintech is mainly altering. But it is not unpredictable. We may not be able to say how the Metaverse will affect us or how it will look, but we sure can understand how it can be leveraged. Financial institutions should not wait for regulatory guidelines to adapt to evolving technology. They must learn how to leverage their unique attributes.

Utilizing their attributes to meet the wants and needs of the customers helps and navigate the digital transition successfully. This includes the desire to be a participant in the metaverse and crypto economies. But all these financial institutions and banks need a reliable and trustworthy service source. A resource marketplace where you get all that you require. Signzy can help you with the best customizable APIs and resources with our efficient AI-based rule engine and technology.

About Signzy

Signzy is a market-leading platform that is redefining the speed, accuracy, and experience of how financial institutions are onboarding customers and businesses – using the digital medium. The company’s award-winning no-code GO platform delivers seamless, end-to-end, and multi-channel onboarding journeys while offering totally customizable workflows. It gives these players access to an aggregated marketplace of 240+ bespoke APIs that can be easily added to any workflow with simple widgets.

Signzy is enabling ten million+ end customer and business onboarding every month at a success rate of 99% while reducing the speed to market from 6 months to 3-4 weeks. It works with over 240+ FIs globally, including the 4 largest banks in India, a Top 3 acquiring Bank in the US, and has a robust global partnership with Mastercard and Microsoft. The company’s product team is based out of Bengaluru, and it has a strong presence in Mumbai, New York, and Dubai.

Visit www.signzy.com for more information about us.

You can reach out to our team at reachout@signzy.com

Written By:

Signzy

Written by an insightful Signzian intent on learning and sharing knowledge.

Peer-2-Peer Lending- A Future Formed From Fundamentals

Posted on | by Signzian

With a revolution of digitization in the country since 2020, India is set for changes in the P2P lending market. IndustryArc predicts the market size to exceed $10.5 billion by 2026. This is after considering 21.6% CAGR during the forecast period between 2021 and 2026.

Peer-to-Peer(P2P) Lending, follows the practice of lending money to businesses or individuals by other individual lenders. This is usually through online services that match lenders with borrowers. Since 97% of these transactions are online now, P2P lending is synonymous with online P2P lending. 

Traditionally banks are the first option people consider to obtain funds. Perhaps a personal loan at an affordable price might do the trick. Unfortunately, the process of qualifying for a loan is rather tedious and time-consuming. This is why up-and-coming businesses and entrepreneurs widely use P2P lending to acquire sufficient funds for their ventures. This helps them get the investments they need without the hassle of availing bank loans.

How It Works And What Are Its Benefits?

P2P lending enables borrowers to avoid the troubles of bank bureaucracy. They are no longer at the mercy of a bank or financial institution. Instead, a fellow lender helps them raise the money. The lenders get decent returns on their investment too. The transaction is possible with the help of an intermediary P2P platform.

Once both parties divulge their credit history, the P2P platform ensures that neither are serial defaulters. After a thorough risk assessment(With algorithms on past borrowings, etc.) they formulate an idea on the chances of incomplete repayment. They assign a score for the parties. Once a participant is listed, they can list their requirements including the funds they need, the interest rate and the duration.

Individuals without credit history or formal banking methods can also participate. But the P2P platform makes an extra effort for verification. But this is not much of a headache for the borrower when compared to the hurdles in traditional bank loans. Since the P2P platforms provide unsecured loans, it is easier for finalizing the transaction for the participants. As a matter of fact, this is one of the major reasons why it is flourishing. P2P is gaining the attention of youngsters across metros.

The platforms also promote P2P lending as an investment opportunity.  Prima facie it may seem not apt that P2P lending presents itself as an investment, considering that most individuals are the primary interactors. Most platforms advise focusing on the returns and not the nature of the arrangement. The interests are constant and the involved parties are already verified. Defaulting is minimal, and thus it makes sense.

The platforms can offer returns of up to 14% to their investors. Investors can customize these investments according to their needs. They can select one specific borrower or diversify with multiple borrowers.

What’s The Catch and How Can Signzy Help?

The P2P platforms usually charge a fee from the borrower and sometimes the lender.  If everything goes well, the borrower will promptly return the capital with a good interest rate. All parties are satisfied after the process.

But if the borrower defaults, that’s when the problems occur. Things can go wrong rather swiftly. Even though the lender can choose the borrower depending on their risk ranking, many times these rankings may be inaccurate. This can be due to inefficient verification methods or procedures. The fact that there is no collateral here, is relevant. Most of the time, the lender does not even have a recourse.

P2P lending utilizes the fundamentals innovatively. They are useful as long as they are safe. But how do we make sure that it is safe? What measures can the platform as well as the lender take while organizing such a venture?

We at Signzy specialize in providing AI-powered RPA platforms for financial services. We digitize your processes while making sure that each individual is properly verified without fail. P2P platforms that avail of our services get state of the art security and the lenders who wish to enter the P2P marketplace can seek our brand too.

Signzy can completely automate your back-operations decision-making process into a real-time API. This is possible due to a combination of ‘Nebula’ — Our no-code AI model builder and our Fintech API Marketplace of over 200+ APIs. Today we work with over 160+ FIs globally including the 4 largest banks in India and a Top 3 acquiring Bank in the US. Globally we have a strong partnership with Mastercard and offices in New York and Dubai to serve our customers in the 2 geographies. Our Product team of 120+ people is building a global AI product out of Bangalore.

About Signzy

Signzy is a market-leading platform redefining the speed, accuracy, and experience of how financial institutions are onboarding customers and businesses – using the digital medium. The company’s award-winning no-code GO platform delivers seamless, end-to-end, and multi-channel onboarding journeys while offering customizable workflows. In addition, it gives these players access to an aggregated marketplace of 240+ bespoke APIs that can be easily added to any workflow with simple widgets.

Signzy is enabling ten million+ end customer and business onboarding every month at a success rate of 99% while reducing the speed to market from 6 months to 3-4 weeks. It works with over 240+ FIs globally, including the 4 largest banks in India, a Top 3 acquiring Bank in the US, and has a robust global partnership with Mastercard and Microsoft. The company’s product team is based out of Bengaluru and has a strong presence in Mumbai, New York, and Dubai.

Visit www.signzy.com for more information about us.

You can reach out to our team at reachout@signzy.com.

Written By:

Signzy

Written by an insightful Signzian intent on learning and sharing knowledge.

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