FinTech 2022: Prioritising data privacy & CX with AI & blockchain while empowering MSMEs

The Tech Panda spoke to a few FinTechs to gauge predictions in the coming year in the ever evolving FinTech sector.

2021 has been an exciting year for the markets as the Nifty railed from 14,000 to an all-time high of 18,600. The last 18 months have created one of the fastest wealth creation opportunities for all types of investors.

This bull run in 2021 has witnessed a record number of new demat accounts being opened by retail investors as capital markets penetration in India continues to grow and digital wealth platforms continue to scale.

2022 will be no different, says Saumya Shah, Founder of Tarrakki, a comprehensive wealth management platform that is designed to make investment easy and hassle-free for first-time investors.

2022 will be a year where not only individual investors will have an opportunity to invest digitally but a plethora of new non-individual investors

“One can expect to see a surge of new demat accounts being opened as more and more retail investors are now participating in capital markets as traditional bank deposits products have become less lucrative due to the low interest rates,” he says.

“2022 will be a year where not only individual investors will have an opportunity to invest digitally but a plethora of new non-individual investors like HUFs, Minors and Corporates will also have digital access to investing via platforms like www.elevo.money. Participation from new such investors will be a major driver for wealth management in India,” he adds.

Founded in 2018 by Saumya Shah, Tarrakki is a comprehensive wealth management platform that is designed to make investment easy and hassle-free for first-time investors. The new-age technology used by the personal finance platform enables users to make regular, calculated investments in mutual funds, equities, and P2P lending and other asset classes, based on their individual life goals, in keeping with their income, age group, and risk appetite.

Read more: The future of banking is FinTech automation

Tarrakki via Elevo offers solutions to consumers and corporates (so that the  MSMEs can efficiently manage their working capital requirements and surplus cash). tarrakki is also the parent company of Rural Invest- an innovative personal finance startup run by school children to create a nationwide impact on young investors by creating financial literacy

“This year will see established banks and NBFCs take big strides in terms of leveraging API stacks to generate meaningful business,” says Aditya Gupta, Co-founder of Credilio, a first to industry FinTech startup transforming the digital lending ecosystem by integrating the lenders, DSA channel and customers on a common platform.

This year will see established banks and NBFCs take big strides in terms of leveraging API stacks to generate meaningful business

“We can expect them to back their lending expertise with FinTech collaborations. FinTech companies will however continue to manage customer interface, while lenders will provide robust underwriting capabilities,” he says.

He also predicts larger partnerships between brands and lenders to provide embedded finance options to customers, which will be available across distribution platforms.

“Overall, exciting times for digital lending business in terms of business volumes,” he adds.

Credilio aims to  empower financial advisors through the lifecycle of the loan process through its proprietary assisted digital lending platform. Founded in 2020, the startup is on a mission is to enable digital adoption within the personal finance industry bringing about transparency, speed and efficiency.

The FinTech startup is building an army of Digital Financial Advisors, trained individuals who will guide a customer through the entire journey of applying digitally,from submitting a lead to completing application to document collection and issuance of the product.

Data, Blockchain, & Privacy

Tanul Mishra, CEO of Afthonia Lab, says data will play a big role in FinTech, but privacy must take priority.

“Data is likely to change how the FinTech industry works in the coming years. It is going to be foundational to building intelligent, intuitive, and sharper solutions that find resonance in the market quicker,” she says.

The wealth of opportunity that data is going to accrue for the FinTech industry will be unparalleled, provided that privacy remains a top agenda for innovators in this space

“The wealth of opportunity that data is going to accrue for the FinTech industry will be unparalleled, provided that privacy remains a top agenda for innovators in this space. The usage of blockchain in this regard will revolutionise the way data is handled by FinTech innovators and augment the scale and serve the end customer better,” she adds.

Founded by Mishra in 2018, Afthonia, headquartered in Bangalore, is an incubator that helps FinTech startups with a safe ecosystem, wherein startups can experiment, grow, and flourish. Recently, Afthonia has taken strides to pull together key players in the investor community to build a corpus INR 3-5 crore.  The incubator aims to be a one stop destination for FinTech startups with an experienced and well-structured body of mentors from diverse sectors in India and abroad.

During the first nationwide lockdown, when all the other startups were struggling to keep themselves afloat, the startups from Afthonia Lab raised funds and bagged international partnerships.  The list includes GingerRoot Code Factory, BlockSurvey, Tarrakki, Blips, Monech, Niivo, and Earnvestt.

“Data is the biggest product or entity in today’s market, gathering it and its optimum usage is important,” says Wilson Bright, Co-founder of Blocksurvey, a 2020 startup that focuses on privacy-focused data collection through surveys, polls, and forms used by enterprises and small businesses to gather insights by using blockchain technology.

Data is the biggest product or entity in today’s market, gathering it and its optimum usage is important

It is built on a blockchain called Stack, which is anchored to Bitcoin and enables the collection and sharing of data with guaranteed end–to–end encryption and privacy.

“Due to digitisation taking leaps in the last one and a half years, there’s also a huge risk of data breaches and thefts which the Stack stops from happening. In the coming years its use cases are going to fundamentally change the way privacy is looked at and will help grow the whole FinTech Industry,” he predicts.

Blocksurvey’s application ensures data anonymity at any given point to protect it from getting manipulated. Incubated by Afthonia Lab, the Bangalore-based startup currently has 500+ active members and is used by individuals and companies. The total data downloaded using their services is more than 100GB until now. It was featured as one of the promising 50 tech startups at TechSparks 2021.

More Help for MSMEs

The Indian economy is largely MSME driven with the sector contributing upwards of 30% to the economy both in GDP and employment generation. However, the potential for growth is even higher and is only interrupted by access and awareness provided in this sector, says Mishra.

“I definitely see FinTech innovations playing an instrumental role in providing the right impetus for growth to this sector by facilitating the easy and adequate flow of credit to this sector or being a wealth management tool for people all over India,” she says.

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“Traditionally, for instance, wealth management companies have focused on high-net-worth individuals (HNI) with net assets of ? US$ 1 million and ultra-high-net-worth individuals (UHNWI) with net assets of ? US$ 30 million. The HNI and UHNWI groups in India have witnessed significant growth in the last decade and this is a demand driver for wealth management services. Being able to extend those suites of services to businesses in India can provide the fillip the MSME sector needs to fuel growth and ensure a gush of capital in a sector that can act as a growth engine for the Indian economy,” she adds.

MSMEs face several challenges when it comes to securing working capital loans they want from the banks due to various reasons. As per a Financial Express report, 82% of MSMEs reported a loss in revenue.

FinTechs can help, says Kunal Ahirwar, CEO and Co-founder of Earnvestt Technologies, a young team from IIT Madras working towards managing financial irregularities in the marketplace using the power of distributed systems like blockchain.

The structuring of products with the help of banks and new technology will help the MSME market reach its full potential as it is the foundation of the industry. Blockchain could be one such way of making platforms more intact and swifter

“The structuring of products with the help of banks and new technology will help the MSME market reach its full potential as it is the foundation of the industry. Blockchain could be one such way of making platforms more intact and swifter,” he explains.

“The FinTech Industry has started to reach the grassroots and is now trying to uplift them with very real-world, innovative and problem-solving products, and it will not only improve financial inclusion but also help the overall industry to become better and stronger in the coming years,” he adds.

Earnvestt Technologies provides invoice financing to its customers, which helps businesses to maintain liquidity and workflow capital for a smooth business. They are currently working with FMCG, e-commerce, software services, medicine, pharmaceuticals, manufacturing, industrial services, agriculture services, and food processing.

Their products include working capital management consulting, invoice and bill discounting, cheque financing, project financing, term limits, WC limits, and revenue-based financing. The team is working towards building innovative tools to empower small businesses in India.

Elevated Customer Experience

FinTech will transform in terms of customer experience, says Darsh Goleccha, Founder of Monech, an AI-based solution provider focused on taking care of one’s financial needs right from managing funds, keeping a track of expenses, and finding the right financial products according to the customer’s needs.

I personally believe there is one more big customer experience and value disruption coming and that will truly define the next generation

“FinTech evolution is at center stage and it’s time for the world to change intelligently and for the better. The single best thing to happen with this change is the evolution of customer experience as a whole, across all segments of finance. Blockchain, phygital models, tokenisation, etc. are leading the way in new and in addition to current trends, I personally believe there is one more big customer experience and value disruption coming and that will truly define the next generation,” he says.

Launched in 2019, Monech is currently running operations across three cities in India, Mumbai, Bengaluru, and Hyderabad. Services offered include Legacy Now | Next, a service that enables families to perform end-to-end legacy planning and legacy transfer in one place.

It claims to be the first to use technology to streamline and build an end-to-end hybrid stack and to create a business model that can be included by organisations, corporates as part of their Employee Benefit Programs.