In the 1970s, the beginning of core banking systems to bring efficiency was revolutionary in many ways. For the next 45-odd years, India’s banks and financial services industry saw a slow and steady evolution of technology.  

But it wasn’t until 2016 that the industry saw a dramatic change in use of technology in banking and payments, with the launch of Unified Payment Interface or UPI. Fast forward to 2024, and now, technologies like blockchain and CBDC are transforming banking. 

The industry has indeed experienced a tech-tonic shift during the past two decades on the back of cloud computing, and advanced technologies such as data analytics, machine learning, Internet of Things, artificial intelligence and more.  

In sync with the overall banking revolution, the country also saw the emergence of digital technology-led payment solutions, thereby enabling easy payments across industry sectors. The fintech innovation has not only brought in convenient ways for payments in the domestic market, but also helped India take UPI global. 

On the banking front, along with many other technology-enabled services, now a CBDC has already started to revolutionize modern day banking by providing a digital version of our currency that is secure, efficient and accessible. 

Product and technology services providers have been at the forefront of such technology-led evolutions in banking and payment services.  

Role of technology providers in empowering financial institutions 

Beyond digitisation of the usual banking transactions, payment solutions are undergoing transformations to enable banks to carry out higher volumes faster to meet the changing demands of customers.  

Today’s platforms for seamless payment services are offering three fundamental characteristics – scalability, feasibility and agility. Unlike monolithic architectures, which were not able to facilitate higher number of transactions without hindrances; microservices platforms, primarily hosted on the cloud, are engineered to manage increasing number of transactions without compromising on performance. 

Such microservices-based platforms, like FSS BLAZE, are designed to significantly reduce payment failures, which has been one of the pressing issues with higher volumes of payments.  

A sharp rise in digital or online financial transactions owing to the growth of e-commerce has created a demand for cloud-based platforms that can seamlessly handle thousands of transactions per second. For instance, FSS’s cutting-edge microservices-based platform, FSS BLAZE enables the FSS Payment Gateway to handle more than 5,000 transactions per second, allowing banks to meet the demand for increasing digital transactions.

Such cloud-native platforms have the potential to offer significant efficiency through speed and scalability, high durability during peak workloads, improved fraud prevention, and enhanced services to banks and other financial services providers.  

Besides, advanced microservices architecture facilitates easy integration with plug-and-play capabilities unlike legacy, traditional architectures.  

In all, cloud-based platforms are going to further redefine the industry through better customer services and digital technology-enabled offerings.  

Benefits of cutting-edge technology in banking 

Given the scalability and agility in modern cloud-native technology solutions, financial institutions have been empowered to make data-driven decisions and provide enhanced customer experience.  

By integrating data from various sources, banks can gain valuable insights into customer behaviour, market trends, and risk management. This allows them to identify new business opportunities, optimize their processes, and deliver targeted marketing campaigns that resonate with their customers. 

Digital technologies and cloud-native platforms provide organisations with flexibility and adaptability across various operational scenarios thereby bringing efficiency. For instance, a payment services provider or a bank can not only achieve operational benefits through higher number of transactions seamlessly using digital infrastructure, but also provide tailored customer experiences at scale.    

Future of technology-led banking and fintech  

Technology is no longer just an enabler, rather a core element of business growth. For example, the emergence of big data analytics has created a larger playing field for the solutions providers to create platforms for financial institutions to gain deeper customer insights and develop targeted marketing campaigns. Perhaps, this is just small part of the larger transformation.  

As digital transformation is becoming core to the growth of any organisation, numbers strongly suggest that BFSI continues to be the prominent adopter of new-age technologies. The global digital transformation in BFSI market was valued at more than $52 billion and pegged to reach nearly $164 billion by 2030 at a 15% growth.  

With advancements in technologies such as artificial intelligence, machine learning, and blockchain; the sector will see increasing use of cloud and microservices-based technology solutions into banking and payment systems.