It was during the financial crisis of 2008-09 when technology made its presence felt in the financial landscape. True, tech existed and played an important role in the world of finance earlier, but as large financial institutes crumbled across the world; technology solutions slowly became more ubiquitous.
Solutions became available for the masses as startups provided easy to use and efficient financial products. From loans to payment solutions, tech gave rise to an entire sector which came to be known as Fintech.
Today, as the world is in the grips of a crisis of unimaginable proportion, tech will be the biggest beneficiary. The early signs are all visible–tech stocks and earnings have risen to record numbers as people from all walks of life prefer to transact digitally. This means technology will continue to play an even larger role when it comes to our finances.
ICICI Bank recently said it is using pictures taken from space and analysed by a third-party firm for farm loans in 500 northern Indian villages. This is a marked departure in the lending practices of a major bank in the country.
However, this is not the first time data from satellites have been used in the world of finance. Again, during the crisis of 2009, two brothers Tom and Alex Diamond used images from satellites to count the number of cars in every Walmart store in the US to predict sales figures. The big break came when UBS used the data to suggest the Walmart stock was undervalued. Today, we take many financial decisions based on such use of technology.
The pandemic has already forced us to work differently and the world of finances is no different. One can be sure that some innovative startup or entrepreneur must be coming up with something that would have a profound impact on our lives in the next few years.
The use of satellite data to arrive at a financial decision was only possible because the technology existed and there were a bunch of products that could allow people to adopt and make sense of such aerial images and data. As the pace of tech adoption increases, expect more novel use cases to be developed. We are still in the early days of technology like IoT, AR and VR and I am sure these will slowly start making their way to the world of finances and adoption would increase by leaps and bounds.
The tech play in our finances will also increase because we have become better at using it. Today, even people in rural India know to use some popular payment apps, which open up a world of new possibilities for them. People are slowly getting comfortable with how technology works and the role it can play in their finances. These same individuals can climb the adoption ladder and may try out the next tech innovation that comes along.
Finally, tech’s role in our lives would have been very limited if the internet would not have been around. For almost all consumer-facing financial products, the internet is the backbone of the solution. As access to the internet becomes wider and stronger across the country, adoption rates will increase and new solutions will come up.
The last financial crisis gave us an entirely new ecosystem of financial products. It will be interesting to find out what this one would throw up, but what is sure is that technology will play an ever-increasing role in our finances and lives.
The writer is the CEO, Wishfin.com.