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Maximum utilization of Fintech amid New Normal

Published : Monday, 21 December, 2020 at 12:00 AM  Count : 492
Noore Alam Siddiqui
The twenty-first century's world has become very much unpredictable, highly volatile and vulnerable. Because various unprecedented, unpredictable events and disasters are appearing one after another for which even this hi-tech based world is not prepared.
Like all other business entities, banks and non-bank Financial Institutions (FIs) are also facing an unprecedented and more challenging period than ever due to outbreak of Covid-19 that we have already started combating. We are observing that this pandemic is challenging traditional banking habits, inevitable booming in the services of high technology-based Alternative Delivery Channels (ADCs). This pandemic is also fuelling the movement towards fully-fledged digital banking.

All baking core risks are now active such as credit, market, management, internal control & compliance, ICT, and operational risks. Amid the increase in Non-Performing Investment (NPI), decline in business we have to maintain the Minimum Capital Requirement (MCR) prescribed by Vessel-III. Now Risk Management has also to be prioritized most and it would definitely be more challenging for the Financial Institutions (FIs).
As a result, risk management practices and technologies at banks are entering a new era and banks are becoming bound to reinvent measurement matrices, processes and technologies. This will require a major restructuring of risk technologies. This has also brought an opportunity to consolidate multiple point solutions, adopt cloud technologies, and revamp and strengthen model implementation technology.

Due to Covid-19 pandemic the volume of business has been declined; scope has been shrunk. As a result, many people have lost their jobs, the salary has been reduced, and facilities have become very much limited. This situation has appeared so dramatically which we did not think even in our dream only a couple of months before.

However, people are trying to return to their old normal period. Many companies have invented the vaccine. But this is highly unpredictable that how many bigger pandemics than Covid-19 waiting in the near future.
But now we have nothing but to combat all of those big challenges. All of us are managers in our respective places. He or she is the best manager who can learn, relearn and unlearn adapting him/herself with the changing, derogatory and unprecedented situation.

Through utilizing ICT, Financial Technology (FinTech or fintech) banks can easily be able to continue all of their banking operations through various ADCs and providing its employees with remote desktop connectivity so that employees could render their services staying at home safely in order to keep all of its operations unhindered keeping ICT risk at the lowest level.

So, we have to customize our mindset and should adapt ourselves to this situation. We have to be resilient and have to prepare ourselves for an upcoming more serious disaster. Because we are not certain about it. If more disasters come again and again then people must change their lifestyle, consumption pattern, saving tendency. And only then the business of FIs might be squeezed as a result.

Financial inclusion is linked to a country's economic and social development and plays a role in reducing extreme poverty. During this covid19 era the growth in financial inclusion has severely been disrupted and in many cases slowed down drastically. In this new normal period, maximum utilization of 'Fintech' could heal this disaster to some extent.

For mitigating various health risks, difficulties, obstacles and losses due to corona pandemic Fintech could give a smooth, smart and prompt solution of all types of financial activities of the modern financial system to both the unbanked or under banked. In today's world Fintech is the new technology and innovation that aims to compete with traditional financial methods in the delivery of financial services. Some of the most active areas of fintech innovation include or revolve around some latest technologies, such as Cryptocurrency and digital cash, Blockchain technology, including  Ethereum, a distributed ledger technology (DLT) that maintain records on a network of computers, but has no central ledger.

Bangladesh is one of the top pioneers in financial inclusion utilizing state-of-the-art financial technology. The central bank of Bangladesh already introduced automatic clearing house, electronic fund transfer, national payment switch, real-time gross settlement, automatic credit information bureau, guidelines for bank-led mobile financial services and agent banking. The bank also started using technology for off-site supervision of banking by innovative das-boards and the use of available digital technologies. As a result, the transmission channels improved dramatically through the smooth implementation of the monetary policy and thus providing hope for a more inclusive and vibrant economy for Bangladesh. Similarly, mobile phones and alternate banking channels, such as agent banking are bringing millions of individuals into the formal financial system, meaning they have bank accounts or mobile money account for the first time.


But the management of all FIs must invest more in combating digital disaster. No institution or organization can always avoid disasters, but with careful planning, the effects of a disaster can be minimized. In order to overcome any disaster or damage, an organization must have a strong Disaster Recovery Plan (DRP). We know that DRP is a set of documented procedures to recover and protect a business IT infrastructure in the event of a disaster. It is a comprehensive statement of consistent actions to be taken before, during and after a disaster -natural, environmental, or man-made. Given organizations' increasing dependency on information technology to run their operations, a disaster recovery plan, sometimes erroneously called a Continuity of Operations Plan (COOP), is increasingly associated with the recovery of information technology data, assets, and facilities. The plan minimizes the disruption of operations and ensures that some level of organizational stability and an orderly recovery after a disaster will prevail.

The present pandemic requires social distancing. Moreover, logically people always give priority to the safety and security of their money. They also want a process that would save their time, reduce hassle and cost. For ensuring the reach of Fintech to the door of unbanked people there must have some strict govt. policies that would make them bound to take financial services. Moreover, the technology should be user-friendly, easy to understand and keeping the cost as lower as possible.

The Covid-19 pandemic has changed the world forever. Consequently, many abnormalities are being accepted as normal. So, in this new normal period, only the Fintech could be an immediate solution in the efforts of mitigating financial depressions. All of the above impacts of Fintech could be made more easy, efficient and effective through innovation. So far, the Fintech has been improved, it could shift hundreds of millions of people from the status of unbanked to banked, abnormality to normality, financial depression to growth despite any pandemic or disaster.
The writer is banker and
freelance columnist






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