The future of fintech - A tale of two cities

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair.”

A long-forgotten writer, Charles Dickens, with a funny haircut, began his “Tale of Two Cities” (ToTC) a tale set in two cities, London and Paris, with this chilling opener. That was about 160 years back. It was a tale framed in the backdrop of the French revolution, in the midst of great social and economic upheaval. Well, he might as well have described our current turbulent times too. prescient.

What’s happening around us, now, you ask?

Globally, we are in midst of some mind-bending millennium-sized events unfolding – everyone, well nearly everyone is connected, every topic, wait, even wars, are packaged for consumption as chat, sound, or video, chatGPT is rivaling the coronavirus for awe and fear-mongering, people are being hired, more people are being fired, the lines between social and personal, well are there any lines separating them anymore? And gig working has been embraced by the masses, in fact, the way of life.

I could go on.

In India, we are also watching yet another ToTC moment, as our airports are getting swanky, our movies are winning awards globally, our leaders are getting younger, bolder, and colorful, and suddenly there is optimism in the air, the sniff of an opportunity to make a mark, wait even lead, and regain some of our lost glory, if not the crown jewels.

We also continue to see our traffic crawling, our roads bumpy, our taps continue to hiss, our lights flicker, a visible disparity of wealth, where a Bugatti meets a begging bowl, and yet in the midst of this chaos and a jarring clash of ideals the air is whiff with optimism.

And Indians are also reaching into their pockets to spend, opening not their wallets but their phones to spend. QR and UPI continue to compete with corona for virality, and when your neighborhood pushcart vendor points to a QR code to pay for your puzzling choice of fruits, we know we are witnessing a great transition to digital and a great convergence of human experiences in these crossroads.

I work in Fintech and I see great opportunities for our industry in the future. It would also mean that we in Fintech need to pivot quickly to make the best of the imminent opportunity in front of us. I will list three trends that I see and how we can better prepare for this transition.

• Finance will embed itself into the fabric of life

In the old world, we buy, and we then pay. They are decoupled experiences one after the other. In the new world they will be intricately coupled and happening in tandem. So, pay-as-you-experience life by the minute will become the norm. Not there yet, but round the bend. you will earn money as you work every minute - and you will also spend money as you consume life by the minute.

So, what does that mean for us fintech companies? We need to double up and provide a platform that allows for such a play to unfold! Fintech can’t stop at just embracing the cloud and providing APIs. Those are table stakes. We must now reach out to the consumer earlier on both ends of the experience – the ability to earn by the minute and the ability to spend too – and embed ourselves deeper, into devices and platforms of their choice, that blend social and gig–and ensure are there available to people as they experience life.

• People will be spending future money to pay for their current needs

What does that mean? Indians are pivoting and embracing a lifestyle, that encourages them to be comfortable with credit. Yes, many of the choices they make would not be affordable if they were to just look at the money they have already earned and saved in their bank but rather parked and matched with a future earning opportunity. So, we will be spending first but earning later.

So, it would mean that consumers will gravitate towards payment choices that allow them to pay in affordable chunks – and platforms that provide EMI and brand offers and pay later options would become very attractive. Fintech companies will have to pivot quickly to provide such a platform that not just provides a payment opportunity that is seamless, it should also provide the consumer the opportunity to make it affordable!

• Merchants and consumers will need help understanding each other in real-time

Let’s get back to the current world. This act of selling and buying was largely isolated. We had platforms that helped the merchant with post facto analytics to aid them in influencing consumer purchases, and we have platforms that helped the customer understand their spending habits to make the right choice. But they are not happening as they are making the payment. Fintech platforms will have to pivot to help them both at the same time and ensure that both are walking away happy. It means the platform will have to aid the customer, to help decide what instrument to use, now and the mode of payment, and simultaneously negotiate with the merchant to offer the best deal so that this act of “planning” happens every time. Such platforms will make a difference in both their lives.

We live in interesting times. But it is a great time to be living too!