FinTech in Investment Banking: How It Can
Help the Unbanked Population?
Traditional investment banking has struggled to adapt legacy technology. But, as the digital revolution
continues across finance, it is time for transformation.
FinTech will revolutionize investment banking in many ways. It uses innovation to dramatically increase
efficiency and leverage advanced technologies like The Cloud and AI. As a result, investment institutions
must adapt to technological advances to remain competitive.
FinTech and related services can bring both short-term and long-term benefits. This article will discuss
how FinTech can transform investment banking and how financial institutions can most effectively use
these services.
Also Read – Why should businesses invest in Fintech Apps?
What can FinTech do to transform investment banking?
1. The Union of Innovation and Efficiency

Compliance is the greatest enemy of efficiency in investment banking.
Financial teams often need help to update their systems following new compliance requirements. This
can lead to innovation being hindered. A FinTech in investment banking team may experience
organizational fatigue, leading to decreased productivity.
FinTech solutions like platform implementations or cloud migrations are changing how institutions think
about compliance.
2. Cloud Computing: It is essential to embrace it
Financial institutions can use the cloud to create a more connected and agile ecosystem by using it as a
central database or network system. Cloud computing is based on a completely digital infrastructure
that can be accessed by authorized personnel at any time from anywhere.
Cloud computing offers many benefits to the investment banking industry:
• Lower operational costs: The cloud removes the need to purchase equipment and other
technology, which can be expensive to install and maintain.
• Reduction in Capital Expenditures Cloud migrations make infrastructure less expensive and can
reduce these expenses. Many FinTech companies also offer managed services that can be used
to address these flexible technologies and provide affordable maintenance.
• Increased Connectivity: By making data sharing more accessible, the cloud can help synchronize
departments and business teams. As decision-making occurs faster, institutions can scale more
efficiently and with greater flexibility.
3. Automation, Artificial Intelligence, and DevOps
Investment banks should seriously consider adding new technologies and strategies like DevOps to their
portfolios to keep up with regulatory changes and maintain high investor satisfaction.
• Automation & AI
For a while, robotic process automation (RPA) has been going through the financial sector. FinTech is
helping it to make its way into investment banking. Automating can be used from the front to the back
office. Automation can be used to optimize compliance and risk models for automatic updates and
create more seamless user experiences at the front end.
AI gives investment banks an advantage because it allows them to access more advanced analytics.
These capabilities include:
• Institutions can make precise predictions about trading patterns, which allows them to
anticipate and respond to market fluctuations.
• This report provides insight into investor behavior and helps to meet their expectations while
shifting business models toward a customer-centric approach.
• High-quality data visualization simplifies communicating growth opportunities to investors.
4. Manage Customer Data

How you handle your data is essential from both a regulatory standpoint and customer satisfaction.
An investment bank can change how it handles essential requirements such as Know Your Customer
(KYC), Anti-Money Laundering laws (AML), and more.
Blockchain’s distributed ledger technology, NFTs, and other NFTs offer investment banks many
advantages in back-office processes. For example, they can store and transfer many encrypted data
points while reducing risk.
FinTech in Investment banking is no exception.
Innovations Made ByFinTech’s to create a sustainable Banking System
The traditional cash-driven Indian economy has responded well to the FinTech opportunity. This was
mainly due to burgeoning smartphone penetration and e-commerce.
India’s banking system has been built on the tradition of brick-and-mortar divisions. Later, alternative
outlets were created to expand the reach of the existing financial services. While a large portion of
Indians has been brought into the financial system, it is still difficult to achieve complete financial
inclusion (FI).
A survey found that India has 190 million unbanked citizens. Nearly half of those with bank accounts are
inactive, the highest percentage across continents. These people still use cash to make regular
transactions. These numbers show that FI in India remains a challenging task.
These are the critical innovations made by India’s FinTechs to create a sustainable banking system that
serves the underserved.
Also Read – Collaborate and Build Solutions for the Bank and Fintech Industry!
1. Drive Financial Security
Education is crucial when it comes to financial services. In India, awareness of digital financial services is
still in its infancy. This is especially true in rural areas and unorganized sectors. FinTech companies offer
various tools and services to help debtors learn about the many financing options available.
Some FinTech businesses drive trends in FinTech mobile apps through digital channels, merchants, and
large-scale online promotions. In addition, some FinTech companies also leverage a portion of their
corporate social responsibility expenditures to partner with NGOs and offer financial literacy programs
in India.
2. Mobile-phone penetration allows for greater reach
Online payments are convenient, quick, simple, and rewarding ways to transfer money. The payment
industry is constantly innovating to offer more options for those financially disadvantaged in the digital
economy.
In rural markets, where ATMs and bank outlets are not financially viable, the unified payment interface
(UPI), payments banks, and mobile wallets were created to help people excluded from the digital world.

The rapid smartphone penetration in the underserved sector has led to digital channels gaining
momentum. They also offer a customizable interface that can be used with different types of phones.
This, along with a significant rise in rural point-of-sale (POS), has given rise to digital channels for
payment service providers (PSP), which can reach the underprivileged through online platforms.
3. Neo Banking for Microfinance
Neobanks, despite their relatively recent entry into India’s FinTech market, have made remarkable
strides. Neobanks are moving beyond the tech-savvy segment and focusing on providing targeted and
personalized services to the financially poor in retail and MSMEs.
Numerous Neobanks are being set up to provide a platform for MSMEs that combines banking,
accounting, compliance, payments, and banking. These Neo Banks offer MSMEs critical financial services
that are essential for running businesses. As a result, MSMEs can focus on their core business activities.
In addition, these Neobanks ensure smooth payment transactions and provide customers with one point
of access for instant loans and managing their operations.
Neobanks combine the power of offline and online acquisition strategies to provide an easy onboarding
experience. This allows digitization and FI for MSMEs in the unorganized economic system.
4. Customer Acquisition with Embedded Finance
Embedded finance or banking is a new trend that will grow exponentially in the coming decade. It
integrates financial services in a non-financial model and allows customers to access relevant financial
services through an organization’s app/platform. This can transform any mobile app development
company into a FinTech business.
Online travel portals that offer travel insurance through tie up with insurance companies are an example
of embedded finance. Many e-commerce giants offer sachet insurance for smartphones and white
goods. India is a neglected market for insurance.These small-ticket insurance options can be combined
with a product to help companies acquire potential customers in insurance.
Embedded banking makes operations easier, quicker, and smoother. It also has the potential to drive FI
in India, helping people to become more familiar with and knowledgeable about new financial options.
The importance of the unbanked
It is widely recognized that there is a desire to make a difference when it comes time to address the
needs of those living in poverty around the globe. Bill Gates and other prominent tech leaders have
pointed out the problem and highlighted the advantages of working together to solve it. It is a crucial
step towards lifting people out of poverty. Access to a bank account and financial facilities depends on
the availability of valid identification. This is a problem that isn’t quickly resolved without taking action.
Lack of proper identification is one of the biggest problems many people need banking access to face.
The lack of valid identification means that there is minimal opportunity for those without access to
banking to establish a credit history that could allow them to get loans. As a result, unbanked people
have minimal options to get out of debt and into poverty without the help of lending and the potential
wealth it could create through production.
Fintech in India – A Global Growth Story

India’s fintech sector has experienced tremendous growth over the past decade since it increased after
the introduction of internet services. India has more than 6,636 fintech startups. The bank and FinTech
industry was worth $50 billion in 2021.
As you know the cost to build a FinTech app, we can proceed with the growth of India’s FinTech Sector.
India’s fintech sector is set to expand at a rate of 20% due to the introduction of new reforms and
technological advances in digital payments. According to estimates, it will reach $138 billion in
transaction value in 2023.
UPI (Unified Payments Interface) is an app-based mobile payment system that transfers funds between
bank accounts. This advanced mobile app-based payment method has been a driving force behind
India’s Fintech revolution. UPI has more than 338 banks that are registered on the platform. The
platform recorded 10.62 lakh crore in transactions in July 2022.
Despite experiencing unprecedented growth over the past few years, which was aided by rapid internet
penetration, India still holds the second-largest unbanked population with 190 million people.
The Indian government has taken significant steps to ensure financial inclusion for all citizens. This has
resulted in the rise of technology-based financial service providers that disburse banking services
throughout the country. Fintech startups, which leverage technology to provide banking services to
large portions of the population through partnerships with existing banks at minimal expense and
paperwork, are providing these services.
Role of the Steering Committee for FinTech
In its September 2019 report, the Steering Committee for Fintech-related Issues, composed by the
Ministry of Finance and Department of Economic Affairs, recommended that regulations be relaxed
regarding fintech and the use of technologies such as Artificial Intelligence & machine learning to
promote financial inclusion.
The RBI (Reserve Bank India), India’s apex body for financial institutions, has launched the “Enabling
Framework for Regulatory Sandbox” to address regulatory compliance issues arising from the growth of
digital financial services. This platform allows regulators and emerging fintech companies to test new
fintech technologies under regulatory and evidence-based policy oversight. The Sandbox has already
announced four cohorts: Cross-Border Payments, Retail Payments, and MSME Lending.
The Vicious Cycle
Some staggering statistics are apparent when you take a look at the numbers.
6%of U.S adults need a bank account. Sixteen percent of U.S. adults, however, need to be more
educated.
Why is it that so many people are underbanked and unbanked? A bank account can be costly. Many
people need help maintaining the minimum required balances to have a bank account. ATM fees,
maintenance, and other fees can be a burden. Many people need a credit or have poor credit and find it
difficult to open a bank account, apply for credit cards, or make large transactions such as leasing an
apartment.

With no other options, many people find themselves trapped and have no choice but to use payday
lenders or check cashers to get the same financial services that a bank would provide. People find
themselves in a vicious trap where it is both too costly to open a bank account and too expensive to
keep one.
Conclusion
Every day, FinTech and innovative financial programs are changing the norm in financial services. This is
making it necessary to reexamine the distribution of wealth worldwide and spotlight the financial needs
of the poor. We can break the cycle of economic poverty by investing in more products to anchor the
underbanked and supporting programs that offer relevant financial education and training
opportunities. This will lead to less financial stress and greater financial independence over the next
decade. Connect with Techugo,the FinTech App Development Company to know more about
investment banking.
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