It was reported that 31 financial institutions, including banks, insurance companies and fintechs, participated in the survey. (Photo: Shutterstock)
Ninety percent of Indian financial institutions are focusing on artificial intelligence (AI) and GenAI (Generative Artificial Intelligence) as key technological enablers of innovation, according to a report by PwC India.
According to PwC India’s report titled ‘Mapping the FinTech innovation landscape in India’, data analytics also continues to emerge prominently in nearly 74 per cent of responses, underlining its integral role in driving insights and decision-making within the financial services (FS) sector.
It was reported that 31 financial institutions, including banks, insurance companies and fintechs, participated in the survey.
“Artificial intelligence (AI) and GenAI (generative artificial intelligence) emerged as the focus area for innovation for Indian financial institutions, with 90 per cent of respondents citing them as the key technological enablers of innovation,” it said.
Additionally, 84 percent of respondents said customer experience and engagement (acquisition, onboarding and service) was the key area of focus for innovation initiatives.
In addition, more than 50 percent of participants highlighted product distribution as a key area of innovation.
It can also be noted that frequent references to risk management, operations and compliance in various responses highlight the industry’s diligence in maintaining robust governance frameworks amid ongoing technological advancements, the report notes.
As the fintech industry continues to evolve, it is clear that growth must be balanced with the critical challenges of digital security and regulatory compliance, said Mihir Gandhi, Partner and Payments Transformation Leader, PwC India.
“Fintech companies must adapt to an ever-changing regulatory landscape while building compliant partnerships to ensure sustainable success. The focus is shifting to profitability and long-term viability, emphasizing the importance of changing business models, innovation and customer focus,” Gandhi said.
PwC India said 65 per cent of respondents considered risk mitigation and adapting to changing regulatory landscapes as critical factors, underscoring the importance of addressing regulatory challenges while innovating.
Furthermore, 45 percent of respondents preferred to promote innovation primarily through internal initiatives, indicating a strong preference for using internal resources and expertise to drive innovation.
“Collaborative innovation is now seen as a key enabler for fintechs as it enables faster speed to market and delivers tangible benefits such as new product offerings, increased productivity and lower operational costs,” said Vivek Belgavi, Partner and Leader, Fintech, Alliances and Ecosystems, PwC India.
According to the report, the main challenges that most companies faced in executing their innovation initiatives were resource constraints, particularly in terms of talent, and the technological complexity associated with new technologies.
The most common goals companies chose to collaborate and partner on were improved speed to market and collaborative innovation, according to the report.
The report also noted that 58 percent of respondents did not have a separate vertical or business unit to manage their innovations.
(Only the headline and image of this report may have been reworked by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First published: September 15, 2024 | 15:51 IS
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