The modern payment system is no more in the control of a few large institutions. With the active participation of technology players, the entire eco-system is rapidly evolving with massive innovation. The ease of making cashless payments and the holistic experience around it is making news each day.
Ever-changing regulatory changes requirements and low entry barriers allow Fintechs to make smart moves into the traditional territory of financial institutions. A fine example is the Unified payment interface (UPI) based in India. Such regulations allow customers to take full control of customer data rather than the financial institutions.
Payment modernization processes are at different stages of implementation worldwide and are a topic of great interest. Let’s look at the four key drivers of payment modernization.
India’s heavy dependence on cash offered limited financial inclusion in the past. Only about 10-15% of the population took to non-cash financial instruments. The government of India, in response, came up with policies to promote non-cash transactions and also encouraged innovation and technology across the banking sector.
As internet penetration rises, huge growth is predicted in India’s eCommerce market trends. It’s one of the fastest growing opportunities in the world of e-commerce. Government schemes like ‘Skill India’ and ‘Digital India’ are making bold moves to further increase internet penetration.
As Indians seek high-quality overseas lifestyle and electronics products, cross-border spending takes a significant chunk of the Indian eCommerce sale.
2. Clearing and Settlement
Modern payment platforms are capable of doing more than just making payments more comfortable and faster. Additionally, they offer robust analytics to give in-depth insights into organizational and individual spending habits and enhance the ability to monitor liquidity and capital management.
Countries worldwide have been proactively upgrading legacy systems to introduce real-time settlement, faster payment, and data-rich transactions. The vision is to modernize the requirements framework and enhance automated fund transfers adhering to regulatory standards.
3. Banking Risk and Compliance
We’ve all witnessed a plethora of bank legislation in the past decade. The pressure to comply with various regulatory obligations is pushing the compliance programs of banks to the edge. Risk management has become inclusive of fraud monitoring, unethical transactions, and tax collection.
As the scope of compliance evolves, banks tap into the wide breadth of digital technologies to drive compliance programs.
Compliance processes are getting automated using Robotic Process Automation (RPA). Natural Language Processing (NLP) can be applied to monitor the customer’s KYC compliance requirements. AI and ML-based self-learning algorithms are being used to monitor transactions and pin-point suspicious activities.
4. Banking Data Integration
Data integration tools help banks to understand their customer’s expectations and behavior. They help to engage with customers across all channels with a smart mix of powerful business intelligence.
Industry Standard Solution
Evolvus is your trusted partner for payment modernization. We offer accurate and secure payment products and platforms like real-time payment, NPCI-NACH, Corporate direct access, E-mandate, and much more.
Data engineering solutions support our insights. Your business data is invaluable, and we help you harness the real power in it.
Balaji is the co-founder and Chief Executive Officer of Evolvus Solutions Pvt Ltd. He plays a critical role in anchoring strategic priorities for the company to gain leadership position in the payments domain.