<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2023/07/promotion-banner-1.webp" alt="M2P Fintech" title="" id="wx7r0ba8i" width="100%" height="317">Debit cards are pivotal to a bank’s digital payment mix. With minimal credit and regulatory risks involved, they are safe digital payment facilitators that deliver convenient transactions, freedom from debt, and rewards. Banks leverage debit cards for higher customer acquisition, retention, and loyalty while diversifying revenue streams through transaction fees.&nbsp;In India, the number of debit cards in circulation is projected to witness a steady increase of 84.6 million cards by 2028. The total number of debit cards is anticipated to reach an impressive&nbsp;1&nbsp;billion*.<h2 class="heading-node" id="0zxvdvu3r" style="text-align: justify">Need for a Modern Debit Card Solution&nbsp;</h2>Banks today need to keep up with growing customer expectations, advanced technology innovation, and regulatory changes. Though legacy debit card systems have served traditional banks so far, they have limited agility and are high on cost. The restrictions impact their ability to accelerate efficiencies, handle major transaction volumes, and accommodate technology upgrades and innovations. These hinder the bank’s capability to go-to-market quicker with debit cards that support instant upgrades and growth.&nbsp;Investing in a scalable, robust, new-age&nbsp;<a class="link" href="https://m2pfintech.com/blog/say-goodbye-to-hassles-simplify-debit-card-management-with-m2p-fintechs-revolutionary-platform/">debit card management</a>&nbsp;solution that accelerates&nbsp;<a class="link" href="https://m2pfintech.com/blog/debit-card-issuance-101-all-you-need-to-know/">debit card issuance</a>&nbsp;and decreases operational inefficiencies is crucial for banks. But integrating modern debit card management systems into traditional banking infrastructures is no easy feat. Manual data transfers, disparate systems, and limited adaptability can lead to errors and reduced user satisfaction. Integration and migration often involve reliance on multiple vendors which further adds to the confusion and inefficiencies.&nbsp;<h2 class="heading-node" id="w72zpikw1" style="text-align: justify">Comprehensive, Cloud-agnostic Debit Card Stack</h2>Our modern&nbsp;<a class="link" href="https://m2pfintech.com/debit-cards/">Debit Card Management System</a>&nbsp;is a robust, scalable, cloud-agnostic solution that eliminates the need for multiple vendors and serves as a comprehensive one-stop shop for all your debit card issuance and operational requirements. By seamlessly integrating with financial institutions, payment gateways, and third-party services, we deliver enhanced security, lightning-fast transactions, and an unbeatable user experience. While end customers can enjoy unified interface, real-time updates, and top-tier security, banks benefit from seamless operations and quick turnaround times.&nbsp;<h2 class="heading-node" id="eplkua3t4" style="text-align: justify">Key Ancillary System Integrations&nbsp;</h2>Our ability to seamlessly stitch in loyalty programs, personal finance,&nbsp;<a class="link" href="https://m2pfintech.com/blog/all-you-need-to-know-about-building-a-robust-fraud-and-risk-management-frm-system/">fraud and risk management</a>,&nbsp;<a class="link" href="https://m2pfintech.com/blog/recon360-redefining-payment-reconciliation/">reconciliation</a>,&nbsp;<a class="link" href="https://m2pfintech.com/blog/unlock-the-future-of-banking-with-next-gen-core-banking-solutions/">core banking</a>, and&nbsp;<a class="link" href="https://m2pfintech.com/blog/transform-digital-onboarding-with-vkyc/">KYC</a>&nbsp;modules with the debit card management solution sets us apart from our peers. The add-on integrations are seamless with zero lag, and they enhance the value and functionality in addition to creating a personalized and holistic banking experience for the customer.<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2023/07/Img_1-1.webp" alt="M2P Fintech" title="" width="100%" height="342"><h3 class="heading-node" id="nxm0zsuql" style="text-align: justify">Loyalty Program</h3>Loyalty programs boost customer lifetime value. When debit card systems are integrated with robust loyalty modules, banks can ensure their valued customers earn rewards and exclusive benefits without any issues. They can personalize offers, offer points, and reward redemption based on debit card usage.<h3 class="heading-node" id="qdxgvzm0u" style="text-align: justify">Personal Finance Management (PFM)</h3>With our user-friendly PFM technology, financial institutions can help their clients set and stick to realistic financial objectives like saving money and paying off debt. The personal financial management module enables users to keep tab on their money, make plans, and get tailored advice.<h3 class="heading-node" id="ktcsgqt3l" style="text-align: justify">Fraud Risk Management (FRM)</h3>Banks can mitigate risks and make informed decisions with our&nbsp;<a class="link" href="https://m2pfintech.com/blog/all-you-need-to-know-about-building-a-robust-fraud-and-risk-management-frm-system/">FRM</a>&nbsp;solutions. Integrating our FRM module provides real-time fraud detection, thus protecting customers and financial institutions.<h3 class="heading-node" id="tdlca3qj8" style="text-align: justify">Access Control Server (ACS)</h3>With our&nbsp;<a class="link" href="https://m2pfintech.com/acs/">ACS</a>&nbsp;system, banks can benefit from enhanced authentication measures that include two-factor authentication. These help to protect against unauthorized access and ensure secure debit card usage for customers.<h3 class="heading-node" id="2q599yge7" style="text-align: justify">Reconciliation</h3>Integrating with&nbsp;<a class="link" href="https://m2pfintech.com/blog/recon360-redefining-payment-reconciliation/">Recon360</a>, our standalone product enables seamless end-to-end reconciliation for transactions, payments, and value-added services. Banks can have greater control over card networks, digital channels, multicurrency, and more. It simplifies exception management, dispute resolution, loyalty tracking, and fund transfers.&nbsp;&nbsp;<h3 class="heading-node" id="ushsikmr2" style="text-align: justify">Core Banking System (CBS)</h3><a class="link" href="https://m2pfintech.com/blog/unlock-the-future-of-banking-with-next-gen-core-banking-solutions/">CBS</a>&nbsp;is the bedrock upon which a bank’s financial services can be built. Layering the debit card management system into the CBS enables complete financial management by streamlining fund transfers through organized and efficient processes.&nbsp;<h3 class="heading-node" id="qvqsoaswy" style="text-align: justify">Know Your Customer (KYC)</h3>Our platform lets you collect, verify, and manage&nbsp;<a class="link" href="https://m2pfintech.com/blog/crack-the-kyc-jigsaw-ease-onboarding-compliance/">KYC</a>&nbsp;information and streamline the onboarding process. The KYC solution ensures regulatory compliance, enhances customer onboarding efficiency, and improves overall customer experience.<h3 class="heading-node" id="t4evco8xo" style="text-align: justify">Switch</h3>The&nbsp;<a class="link" href="https://m2pfintech.com/blog/what-is-a-payment-gateway-and-payment-switch-understanding-the-basics-of-payments-architecture/">payment switch</a>&nbsp;facilitates smooth communication between payment service providers, routing transactions, and processing payments. M2P’s Switch-as-a-Service offers versatile capabilities, including authentication, tokenization, and transaction processing. Its architecture ensures seamless transaction orchestration within the debit card solution.&nbsp;<h3 class="heading-node" id="ljectnvx1" style="text-align: justify">Notifications</h3>M2P integrates with the bank’s Short Message Service (SMS) vendor for customer debit card notifications. It covers various events like successful transactions, limit exceeded, and more. Our real-time notification system aids customers in staying informed.&nbsp;&nbsp;&nbsp;By coupling the above discussed ancillary systems with our debit card stack, we provide a comprehensive and integrated solution that delivers enhanced functionality and increased value for both the customers and the financial institution. The debit card management solution suite can be readily integrated with products individually or used as a stand-alone product, making it a versatile option.&nbsp;<h2 class="heading-node" id="fx5l17msw" style="text-align: justify">What Makes our Debit Card Solution Unique?&nbsp;</h2><img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2023/07/img_2.2-1-1.webp" alt="M2P Fintech" title="" width="100%" height="230"><h3 class="heading-node" id="e4cnhg0y8" style="text-align: justify">Plug-and-Play Architecture</h3>Our approach is not one-size-fits-all. We empower banks to customize and shape the system according to their unique preferences and workflows. Moreover, our add-on products further enhance the debit card management system’s capabilities, with full customization options for cherry-picking functionalities that align with the institution’s goals, ultimately elevating the overall customer experience. This comprehensive approach sets us apart, making our debit card solution the first of its kind.&nbsp;<h3 class="heading-node" id="vg5mi011s" style="text-align: justify">Smooth Third-Party Integrations</h3>Our system is built on a foundation of modularity and microservices, allowing seamless integration with both in-house and external services, including essential systems like CRM. The heart of our approach lies in our&nbsp;<a class="link" href="https://m2pfintech.com/blog/api-the-power-that-drives-new-age-banking-ecosystems/">API</a>-based approach, which ensures smooth and uninterrupted interactions with third-party integrations, particularly emphasizing the significance of CRM and the power of omnichannel engagement tools. By embracing this cohesive ecosystem, each component works harmoniously together, enriching the overall experience for users.&nbsp;<h3 class="heading-node" id="m1lao4e6i" style="text-align: justify">Diverse Banking Platforms</h3>Our debit card management system facilitates seamless interactions with diverse banking platforms, enabling a unified experience for customers across&nbsp;Kiosk, POS, IVR,&nbsp;ATM, online banking, and mobile apps. Our versatile architecture ensures smooth data exchange and synchronization, streamlining operations and enhancing customer convenience. With us, banks can deliver a cohesive and user-friendly banking experience, thus maximizing customer satisfaction.&nbsp;<h3 class="heading-node" id="1rc7qkc3z" style="text-align: justify">Safety, Efficiency, and Reliability</h3>Banking can be made easier with increased safety, instantaneous efficiency, and decreased downtime. Our Microservices-based strategy is both flexible and robust, while our high-performance, distributed streaming infrastructure guarantees rapid data flow. You can relax knowing that any potential risks to your financial system have been mitigated and that errors and downtime have been kept to a minimum.&nbsp;<h2 class="heading-node" id="ilmu5qvhx" style="text-align: justify">Opportunities and Possibilities&nbsp;&nbsp;</h2>The future of debit card management holds innovative solutions. Akin to the versatility of AWS, our revolutionary platform empowers banks with intuitive drag-and-drop functionality, granting unparalleled autonomy to perform functions freely.&nbsp;Our debit card management system is about to set new standards with state-of-the-art AI-driven fraud detection and security protocols that mitigate risks in real time. By leveraging blockchain-based measures, we ensure an impregnable fortress for data and transactions, fostering unshakable trust within the digital ecosystem.&nbsp;And that’s not all.&nbsp;&nbsp;We take customer experience a step further with partnerships with an extensive array of services and financial products. This open ecosystem unlocks limitless opportunities, enabling banks to curate a truly personalized and unparalleled banking experience.&nbsp;Supercharge your debit card management system and get ahead of the competition <a class="link" href="https://m2pfintech.com/contact-us/?utm_source=mainblog&amp;utm_medium=blg&amp;utm_campaign=july">Talk to&nbsp;M2P today!</a>*<a class="link" href="https://www.statista.com/forecasts/1150250/debit-cards-in-use-forecast-in-india">Number of debit cards in India 2013-2028 | Statista</a><a class="link fui-Link ___1idfs5o f3rmtva f1ewtqcl fyind8e f1k6fduh f1w7gpdv fk6fouc fjoy568 figsok6 f1hu3pq6 f11qmguv f19f4twv f1tyq0we f1g0x7ka fhxju0i f1qch9an f1cnd47f fqv5qza f1vmzxwi f1o700av f13mvf36 f1cmlufx f9n3di6 f1ids18y f1tx3yz7 f1deo86v f1eh06m1 f1iescvh ftqa4ok f2hkw1w fhgqx19 f1olyrje f1p93eir f1h8hb77 f1x7u7e9 f10aw75t fsle3fq f17ae5zn" href="https://m2pfintech.com/newsletter/" target="_blank" rel="noreferrer noopener">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox.Follow us on&nbsp;<a class="link fui-Link ___1idfs5o f3rmtva f1ewtqcl fyind8e f1k6fduh f1w7gpdv fk6fouc fjoy568 figsok6 f1hu3pq6 f11qmguv f19f4twv f1tyq0we f1g0x7ka fhxju0i f1qch9an f1cnd47f fqv5qza f1vmzxwi f1o700av f13mvf36 f1cmlufx f9n3di6 f1ids18y f1tx3yz7 f1deo86v f1eh06m1 f1iescvh ftqa4ok f2hkw1w fhgqx19 f1olyrje f1p93eir f1h8hb77 f1x7u7e9 f10aw75t fsle3fq f17ae5zn" href="https://www.linkedin.com/company/m2pfintech/mycompany/" target="_blank" rel="noreferrer noopener">LinkedIn</a>&nbsp;and&nbsp;<a class="link fui-Link ___1idfs5o f3rmtva f1ewtqcl fyind8e f1k6fduh f1w7gpdv fk6fouc fjoy568 figsok6 f1hu3pq6 f11qmguv f19f4twv f1tyq0we f1g0x7ka fhxju0i f1qch9an f1cnd47f fqv5qza f1vmzxwi f1o700av f13mvf36 f1cmlufx f9n3di6 f1ids18y f1tx3yz7 f1deo86v f1eh06m1 f1iescvh ftqa4ok f2hkw1w fhgqx19 f1olyrje f1p93eir f1h8hb77 f1x7u7e9 f10aw75t fsle3fq f17ae5zn" href="https://twitter.com/m2pfintech" target="_blank" rel="noreferrer noopener">Twitter</a>&nbsp;for insightful fintech bytes curated for curious minds like you.

Elevate your Banking Operations with our Integrated Debit Card Management System

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2023/05/hero-banner-2.webp" alt="M2P Fintech" title="" id="fudvus1lb" width="100%" height="253">The pandemic changed the world as we know it, and banking was no exception.Customers began preferring mobile-first, secure, personalized, and digital payment methods over direct ones to transact, and banks had to adapt to survive.Traditional banks had to find efficient ways to drive customer experience and security. They embraced digital transformation rapidly and implemented new technologies to offer customers a seamless banking experience.Banks had to ensure that their Debit Card Management Systems (DCMS) were equipped to handle personalization, security, and the surge in usage. They had to adopt measures such as fraud detection and prevention systems, real-time transaction monitoring, and enhanced security protocols to ensure the safety of customer data.But running a debit card operation can be a challenging task for banks. Pressure from evolving customer preferences, competition from contactless payment modes,&nbsp; and evolving regulatory changes severely affect the debit card landscape. Legacy banking systems are plagued by cost and effort bottlenecks that further impact the operational efficiency and profitability of banks.Solution: Next-gen Debit Card Management System&nbsp;To survive and thrive, banks need to modernize their core debit card infrastructure with futuristic, scalable, and innovation-friendly technology. Modern Debit Card Management Systems transform the way banks handle debit card operations. From super-quick transaction speed, personalized customer experiences, to enhanced security features and seamless integrations, modern debit card platforms are reshaping the way banks manage debit cards.Before going head-on into what DCMS is and how it can improve efficiency, let’s take a quick trip down memory lane.<h2 class="heading-node" id="o2c1947a5">Debit card, over the years</h2>Debit cards have always been a ubiquitous part of the digital financial ecosystem enabling inclusive access to everything from subsidies, disbursals, remittances, bill payments, and more. It is widely used for various transactions such as ATM withdrawals, POS purchases, and online payments.&nbsp; Factors like freedom from debt, convenient card-based payment features, and rewards in the form of cashback have driven the shift in customer behavior towards debit cards. The security, efficiency, and convenience offered by debit cards played a vital role in India’s journey toward a cashless economy.India's debit card journey started in the late 1980s with technological advancements. SBI Cash Plus card was launched in 1987, followed by Electronic Funds Transfer in 1994. INFS launched in 1997, and in 2000, RBI introduced two-factor authentication for online transactions. Two-factor authentication for online transactions using debit cards came in 2010. RuPay debit card was launched in 2014, and demonetization in 2016 boosted debit card usage.<h3 class="heading-node" id="2y29tx40t">Post 2020</h3>During and after the pandemic, <a class="link" href="https://m2pfintech.com/blog/rise-of-wearables-in-payments-and-banking/">wearables</a> such as bracelets, rings, and watches linked to debit card accounts served as a safe, contactless way to transact. These wearables use <a class="link" href="https://m2pfintech.com/blog/nfc-payments-simplifying-payment-space/">Near Field Communication</a> technology to process transactions in real-time, making payments quickly and easily.<h3 class="heading-node" id="kbveoma2c">Fast forward to 2023</h3>As of January 2023, there were over 945 million active debit cards in India. Industry experts predict that the usage of debit cards in the country will continue to grow, with an estimated increase of 84.6 million cards by 2028.Banks issue various <a class="link" href="https://m2pfintech.com/blog/debit-card-issuance-101-all-you-need-to-know/">types of debit cards</a> based on the payment platform, technology, and usage. They offer banks an excellent opportunity to cater to diverse needs and expand their customer base.But, here comes a crucial question.Are banks using the right debit card stack?You’ll know if you continue reading.Traditional banks use legacy debit card management systems with limitations that inhibit the capability of the bank to innovate, scale, and grow. Here’s a quick look into the bottlenecks that hinder banks from delivering the best experience to customers.<h2 class="heading-node" id="yhwpo2fqf">Bottlenecks in legacy DCMS</h2><ul class="list-node" id="8q6zo3njp"><li>Scalability can be a significant issue since traditional systems are monolithic and difficult to scale horizontally.</li><li>Use of multiple vendors for different stages of the debit card management process leads to delays in the card issuance process and quality control issues.</li><li>High maintenance costs are a key problem faced while using a traditional DCMS, as they are complex and require additional resources and time-consuming operations.</li><li>Inflexibility of legacy systems causes delays in system upgrades and makes it challenging for banks to keep up with technological advancements.</li><li>Lack of integration between systems leads to delays, errors, and fraud.</li></ul>To overcome these bottlenecks, banks need to transition to modern and innovative DCMS, which provides optimal customer experience, increases competitiveness, and growth.<h2 class="heading-node" id="jtcuynv48">Traditional vs. Modern Debit Card Management System</h2><img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2023/05/banner-2.webp" alt="M2P Fintech" title="" width="100%" height="253">The traditional DCMS was limited in terms of personalization, accessibility, the application process, transaction limits, alert notification, and security. However, with the advancements in technology and changing customer expectations, modern DCMS has transformed the banking experience.Modern DCMS offers a greater degree of personalization with options to choose card designs, transaction limits, and even reward programs that suit the needs of customers. Additionally, they offer more accessibility via mobile apps and online platforms, allowing customers to easily manage their accounts and track their expenses.<h2 class="heading-node" id="j61fjxrw3">Modern debit card platform: Introducing M2P DCMS</h2>M2P DCMS is a 360° card management solution that offers fast, scalable, and customizable debit card capabilities, including product setup, card issuance, inventory management, EFT switch, and card management services.<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2023/05/banner-3.webp" alt="M2P Fintech" title="" id="fu8fkz06u" width="100%" height="203"><h3 class="heading-node" id="mnpwao2m5">Key features</h3><ul class="list-node" id="irafdwc04"><li>Robust API for platform integration</li><li>Seamless onboarding</li><li>Personalized rewards program</li><li>Effective Personal Finance Management (PFM)</li><li>Hassle-free reconciliation &amp; settlement</li><li>Intelligent Access Control Server (ACS) System</li><li>Inclusive set of inbuilt reports &amp; dashboards</li><li>Inbuilt security &amp; compliance</li></ul><h3 class="heading-node" id="bez8ah3y3">Seamless API integrations</h3>Our API-driven DCMS offers a flexible and scalable platform for banks to innovate and adapt to changing customer needs and market conditions.&nbsp; Seamless API integration and communication enable easy integration with third-party services, namely Personal Financial Management (PFM) tools, fraud detection software, and loyalty programs. API integration plays a vital role in enabling the following.<ul class="list-node" id="1mln0fnna"><li>Real-time data exchange</li><li>Automated workflows</li><li>Streamlined processes</li><li>Improved data accuracy</li><li>Better customer experience</li></ul>With API integration, customers can access their account data and perform transactions via different modes, namely online portals, and mobile apps. They can also receive real-time notifications of their account activity, namely purchases, withdrawals, and balance updates. Banks are allowed to enhance their offerings and create more personalized experiences for their customers.<h3 class="heading-node" id="8s9tdho6k">Hyper-personalization</h3>Tailoring offers and services to customers based on individual preferences, spending patterns, and other relevant data is very important. It allows banks to create a more personalized customer experience which in turn improves customer satisfaction, loyalty, and engagement. This helps banks to detect and prevent potential security threats and fraudulent activity in real-time. With modern DCMS, banks can take proactive measures to prevent fraud and ensure the security and safety of customer funds.<h3 class="heading-node" id="1xgxx92xc">Security</h3>To deliver differentiated card programs with the utmost security, banks need an advanced DCMS.&nbsp; The security features must be sophisticated to thwart fraud and cyber-attacks. This is where modern DCMS comes in, offering a range of advanced security features such as the following.<ul class="list-node" id="rr9fxmt9h"><li>Multi-factor authentication</li><li>Encryption</li><li>Tokenization</li><li>Real-time fraud detection</li><li>AI/ML algorithms</li></ul>These systems give users more control over their accounts and enable them to set up alerts and notifications for any suspicious activity, further enhancing the security of their transactions.<h3 class="heading-node" id="3d66b1ndk">Scalability</h3>As the number of debit card users continues to grow, it’s important for the system to keep up with the increasing volume of transactions. Modern DCMS offers a highly scalable solution that can easily adapt to accommodate the growth in users and transactions. Advanced technology and architecture such as cloud computing, microservices, and distributed systems are efficient and reliable even as the number of users rises. This scalability ensures that customers can perform transactions without experiencing delays or system downtime, resulting in a seamless and satisfactory user experience.<h3 class="heading-node" id="hqqr6bwsj">Launching multiple products with quick TAT</h3>CMS offers banks and financial institutions faster turnaround time (TAT) for launching new debit card products with innovative features and benefits. Through advanced technology and flexible APIs, DCMS can integrate new products and services into their systems quickly, helping banks to cater to their customer’s evolving needs effectively. This not only keeps banks ahead of the competition but also ensures that customers have access to a wide number of debit card options resulting in faster TAT and greater loyalty and satisfaction.<h2 class="heading-node" id="lbq5vn0ay">Why M2P Debit Card platform?</h2>With market-winning features and benefits, M2P DCMS is designed to enhance customer experience and operations for banks. &nbsp;Our agile, cloud-agnostic, cutting-edge platform comes with a modular event-driven architecture for maximum impact.<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2023/05/banner-4-1.webp" alt="M2P Fintech" title="" width="100%" height="314"><h3 class="heading-node" id="sls36a9b0">Integration</h3>M2P offers an API-first technology stack that ensures seamless integration across all apps and web portals. Our aim is to offer a fully customizable solution that meets the unique needs of each client.<h3 class="heading-node" id="9x0ejowps">Time-to-Market</h3>We offer end-to-end solutions and in-house capabilities to help you launch your debit card program 5x faster than the competitors. Our streamlined process ensures minimal dependencies, which allows to get your product to market quickly and efficiently.<h3 class="heading-node" id="o9mo79wcc">Cloud Agnostic</h3>Our platform is designed with a cloud-native and cloud-agnostic approach, utilizing the latest micro-services architecture and low code development to ensure a modern and future-proof solution for our clients.<h3 class="heading-node" id="7v6i0oki1">Modular Event-driven Architecture</h3>Our composable architecture enables banks to run multiple programs concurrently. With this architecture, banks can efficiently manage and scale various programs while ensuring data privacy and security for all parties involved.Want to know more about deploying a Debit Card Management Solution?Reach out to us at <a class="link" href="mailto:business@m2pfintech.com">business@m2pfintech.com</a>.<a class="link fui-Link ___1idfs5o f3rmtva f1ewtqcl fyind8e f1k6fduh f1w7gpdv fk6fouc fjoy568 figsok6 f1hu3pq6 f11qmguv f19f4twv f1tyq0we f1g0x7ka fhxju0i f1qch9an f1cnd47f fqv5qza f1vmzxwi f1o700av f13mvf36 f1cmlufx f9n3di6 f1ids18y f1tx3yz7 f1deo86v f1eh06m1 f1iescvh ftqa4ok f2hkw1w fhgqx19 f1olyrje f1p93eir f1h8hb77 f1x7u7e9 f10aw75t fsle3fq f17ae5zn" href="https://m2pfintech.com/newsletter/" target="_blank" rel="noreferrer noopener">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox.Follow us on&nbsp;<a class="link fui-Link ___1idfs5o f3rmtva f1ewtqcl fyind8e f1k6fduh f1w7gpdv fk6fouc fjoy568 figsok6 f1hu3pq6 f11qmguv f19f4twv f1tyq0we f1g0x7ka fhxju0i f1qch9an f1cnd47f fqv5qza f1vmzxwi f1o700av f13mvf36 f1cmlufx f9n3di6 f1ids18y f1tx3yz7 f1deo86v f1eh06m1 f1iescvh ftqa4ok f2hkw1w fhgqx19 f1olyrje f1p93eir f1h8hb77 f1x7u7e9 f10aw75t fsle3fq f17ae5zn" href="https://www.linkedin.com/company/m2pfintech/mycompany/" target="_blank" rel="noreferrer noopener">LinkedIn</a>&nbsp;and&nbsp;<a class="link fui-Link ___1idfs5o f3rmtva f1ewtqcl fyind8e f1k6fduh f1w7gpdv fk6fouc fjoy568 figsok6 f1hu3pq6 f11qmguv f19f4twv f1tyq0we f1g0x7ka fhxju0i f1qch9an f1cnd47f fqv5qza f1vmzxwi f1o700av f13mvf36 f1cmlufx f9n3di6 f1ids18y f1tx3yz7 f1deo86v f1eh06m1 f1iescvh ftqa4ok f2hkw1w fhgqx19 f1olyrje f1p93eir f1h8hb77 f1x7u7e9 f10aw75t fsle3fq f17ae5zn" href="https://twitter.com/m2pfintech" target="_blank" rel="noreferrer noopener">Twitter</a> for insightful fintech bytes curated for curious minds like you. &nbsp; &nbsp; &nbsp;

Simplify Debit Card Management with M2P's Revolutionary Platform

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2023/05/MicrosoftTeams-image-7.webp" alt="M2P Fintech" title="" id="6k7sbdy4b" width="100%" height="253">Banks are undergoing a significant transformation, with radical digitization leading the way.&nbsp; Experiential omnichannel banking is taking over transactional counterparts. Competition is intensifying, and margins are shrinking. Banks are under tremendous pressure to deliver personalized digital-first experiences while optimizing cost efficiency, operational excellence, and compliance.<h2 class="heading-node" id="0tgjyolbl" style="text-align: left">Need to modernize CORE</h2>Though Centralized Online Real-time Environment (CORE) Banking drives branch-agnostic transactions, banks still grapple with inefficiencies that negatively impact customer experience, operations, and revenue. Legacy infrastructures, rising consumer appetite for quick and seamless digital experiences, macroeconomic challenges, regulatory headwinds, and technological advances further contribute to the banking woes. &nbsp;As legacy banking infrastructures lack seamlessness, flexibility, and scalability, banks struggle to deploy financial technology to support innovative product releases, quick go-to-market speed, frequent modifications/upgrades, and regulatory compliance changes.To stay relevant and ahead of the curve, banks must modernize their digital core banking infrastructure. Modern API-based core banking provides a customer-centric next-gen platform that enables faster innovation and higher efficiency by overcoming the limitations of their current core architectures. The market size is growing at a steady 18.3% and is expected to reach $40.67 billion by 2029. In this blog, we will explore how banks can achieve cost and operational efficiencies by making the big shift from legacy to digital core banking solutions.<h2 class="heading-node" id="09q78gig6" style="text-align: left">Digital Transformation in Banks</h2>Digital transformation is more than just implementing new technology in the banking system. It involves a fundamental shift in how banks think, operate, and deliver customer value. The goal of digital transformation is to leverage platformization and technology to unlock speed and innovation and optimize cost and operations while managing security and resilience.In India, the central government has embarked on a journey of digital transformation with the aim of enhancing the banking experience, social security, and financial inclusion. This transformation involves a shift from legacy systems to digital core banking, enabling more efficient and accessible financial services for the masses.<h2 class="heading-node" id="z074t0cvy" style="text-align: left">Big shift: Legacy to Digital Core Banking &nbsp;</h2>Core banking has <a class="link" href="https://m2pfintech.com/blog/future-of-core-banking-systems/">evolved in leaps and bounds</a>. What started out as a simple computerized banking system with monolithic codes and mainframes in the 70s has metamorphosed into low-code, API-first, cloud-agnostic platforms today. This platformization has been a key development for banks, as they transformed from being only a system to a holistic platform. In the contemporary landscape, core banking systems are intricately connected with cloud architectural models, representing a significant shift in the way banking operates. This transformation can be dissected into several crucial layers as shown in the below image.<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2023/05/Turing-CBS-Blog-V4-02-1.webp" alt="M2P Fintech" title="" width="100%" height="317">At the forefront, the interface/channel layer orchestrates seamless customer interactions, adapting to various digital touchpoints. Nestled within this framework is the concept of <a class="link" href="https://m2pfintech.com/blog/banking-as-a-service-redefining-financial-services/">Banking as a Service (BaaS)</a>, allowing for modular, customizable financial services that meet the diverse needs of today's customers. Deeper still, we encounter the basic banking layers, the core components that manage essential banking functionalities. Supporting this entire structure is the Infrastructure as a Service (IaaS) layer, providing the robust foundation for this dynamic ecosystem. The synergy of these layers with the cloud architectural model has catapulted core banking into a new era of flexibility, efficiency, and customer-centric innovation. Core banking platforms give banks the agility to scale and fully leverage the immense potential of the ongoing digital revolution to satisfy customers, employees, regulators, and partners.Legacy core banking systems are filled with silos, code rigidity, and complexities. Though traditional banks have automated financial processes and have newer distribution channels, the legacy banking system hinders their agility and flexibility to adapt to evolving factors like customer journeys and preferences, ecosystem changes, and vendor lock-ins. Additionally, they also result in higher maintenance costs, slower time to market, and do not support instant releases.Next-generation core banking platforms break down these barriers with modern, scalable, and open architectures using lightweight codes. They leverage APIs and advanced technologies to deliver simplicity, cost efficiency, speed, interoperability, flexibility, security, and future readiness. <a class="link" href="https://m2pfintech.com/blog/core-banking-essentials-types-components-advantages/">Modern core banking</a> systems play a crucial role in accelerating digital transformation for banks, enabling them to deliver a secure and superior banking experience to their customers. In the core banking stack, the customer's front-end layer acts as a link between the bank and its clients.<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2023/05/Turing-CBS-Blog-V5_1-1.webp" alt="M2P Fintech" title="" width="100%" height="317">It includes the Customer Data Ledger, for secure customer information management, and the Loan Module for seamless lending. The Third-Party Module integrates specialized offerings whereas the user-friendly Front-End App facilitates transactions and portfolio management. The Payment Module streamlines transactions with multiple options and the Third-Party Front-End App connects users to external financial services. This setup prioritizes customer needs, data security, and convenience. By leveraging advanced technology, these systems optimize costs and operational efficiencies, creating a seamless flow of operations that benefits both the bank and its customers.<h2 class="heading-node" id="71ojb1j4t" style="text-align: left">Optimizing cost and operational efficiencies</h2>To keep costs in check, banks need to prepare to take on uncertainties by enhancing operational and cost efficiencies. The first step is to optimize costs associated with maintenance and processing. Modernizing core banking systems reduces costs associated with core applications and hardware processing by consolidating siloed applications. The process cuts down maintenance costs which are usually high for legacy systems.Digital core banking systems drive operational efficiency by standardizing business processes, eliminating manual operations, and implementing straight-through processing capabilities. It also assists smooth outsourcing of non-core operations and allows the operational proficiencies to focus on critical core tasks. By modernizing the core, banks can standardize and streamline end-to-end business processes, improve regulatory compliance, and expedite go-to-market speed for new products. They can seamlessly replace the siloed product-centric legacy system with a next-gen, customer-centric, and hyper-personalized core banking system.<h2 class="heading-node" id="0zuyzy83r" style="text-align: left">Further benefits</h2>Core banking solutions offer a comprehensive platform for banks to gain accurate insights into their accounts. They provide a range of capabilities that include customer onboarding, customer relationship management, account opening, loan origination workflow, credit analysis, deposit accounts, instant reporting, and enterprise content management. The end-to-end platform spans across business lines and enables banks to streamline operations and efficiently manage their accounts from a single system. Some of the key benefits of next-gen digital core banking systems include the following.<ul class="list-node" id="2kmgmrqf0"><li>Simplicity in scaling up</li><li>Agile enough to accelerate new product launches</li><li>Incredible go-to-market speed</li><li>Onboarding and setting up in just a few clicks</li><li>Advanced security systems for data storage and fraud prevention management</li><li>Centralized access to account aggregators, mobile and third-party applications</li></ul><h2 class="heading-node" id="ofb7492tb" style="text-align: left">Turing Core Banking Solution (CBS)</h2>Striking the right balance between high-quality services, operational excellence, compliance, and cost optimization is Turing, our core banking solution that’s revolutionizing the banking industry.Turing is a cutting-edge core banking platform that deploys a state-of-the-art tech stack and micro-services architecture with licensed and open-source platform compatibility. Its low code development capability and API-first, cloud-agnostic approach positions Turing as a modern, future-ready core banking solution. Turing enables banks to deliver top-notch neo-banking services, customized Personal Finance Management (PFM), cutting-edge fixed deposit stack, personalized/custom-built debit cards, convenient flexi deposits, and futuristic gold deposits. Banks can launch new products with minimum effort by leveraging pre-built modules and components, allowing them to stay ahead of the competition.<h2 class="heading-node" id="eq93as9f1" style="text-align: left">Innovation and inclusion</h2>Although digital payment methods made transactions convenient, there were cases where senior citizens, underprivileged communities, and non-tech-savvy people encountered difficulties in banking. This was primarily due to the lack of smartphones, payment cards, and the inability to remember passcodes or PINs.To ensure digital financial services are accessible to all, Turing supports the Aadhaar-enabled Payment Systems (AePS).Aadhaar Enabled Payment System has the potential to revolutionize digital financial services in India by providing universal access to financial services. This system allows individuals to conduct financial transactions using their Aadhaar ID and biometric authentication, thus eliminating the need for a smartphone or payment card and to remember passcodes or PINs.<h2 class="heading-node" id="7odd7zpxu" style="text-align: left">What is Aadhaar-enabled Payment System?</h2>AePS is a unique payment system that allows anyone with an Aadhaar-enabled bank account to access online transactions via micro-ATM, kiosks, or mobile devices using Aadhaar authentication. With this system, users need not visit a bank branch to deposit cash, transfer money, and withdraw funds from their bank account without using a smartphone, payment card, or any other document.To know more about Aadhaar Enabled Payment System, <a class="link" href="https://m2pfintech.com/blog/revolutionizing-financial-inclusion-aadhaar-enabled-payment-system-aeps/">click here.</a><h2 class="heading-node" id="b6sj0yjdt" style="text-align: left">AePS implementation - Gayatri Bank</h2>We deployed Aadhaar Enabled Payment System (AePS) for Gayatri Bank, a cooperative urban bank in Telangana that offers economic support and hassle-free digitized financial services to underbanked and unbanked populations in India.<h2 class="heading-node" id="p87o5froi" style="text-align: left">Pain points&nbsp;</h2>At Gayatri Bank, most transactions involved senior citizens, and less tech-savvy customers from remote unbanked corners. For them possessing a smartphone or remembering PINs is a huge challenge. Thus, they were not able to access digital banking services.Gayatri bank needed assistance in fixing this problem and facilitating hassle-free financial access to people across all parts of society. Another major challenge was the cost involved in opening new branches and ATMs and issuing cheque books, cards and managing the KYC process. In underbanked rural areas, getting KYC documents in order and enabling efficient usage of branches and ATM machines is still a struggle for banks as well as customers.<h2 class="heading-node" id="shoqo5hhz" style="text-align: left">How we resolved challenges and future-proofed transactions?&nbsp;</h2>We understood that Gayatri Bank required a fintech partner to enable AEPS implementation and manage UIDAI authentication across their branches and business correspondent network in India. This was a strategic, futuristic move for Gayatri Bank to drive inclusion, electronify retail payments, achieve interoperability, reach more customers, and cut costs.We powered the AePS switch and helped customers use their Aadhaar number and fingerprint as an identity to perform the following transactions via business correspondents.<ul class="list-node" id="v912ticfi"><li>Cash deposits</li><li>Cash withdrawals</li><li>Intrabank or interbank fund transfers</li><li>Balance enquiries</li><li>Mini statement printing</li></ul>We securely routed Aadhaar-initiated interbank transactions via central switching and clearing agency and enabled disbursements of Government entitlements under the National Rural Employment Guarantee Act (NREGA), social security pensions, and handicapped old age pension schemes.Gayatri Bank was able to cut costs by engaging with business correspondent agents to facilitate Aadhaar-enabled transactions instead of investing in new branches, ATMs, cheque book, and cards. These agents increase the penetration of financial services, as anyone is able to visit them to get transactions done with just an Aadhaar number and biometric identification.In a nutshell, we built a solid foundation for Gayatri Bank to run a full-fledged Aadhaar Enabled Banking Service across India.<h2 class="heading-node" id="p7zw9m1jc" style="text-align: left">Results achieved</h2>On the very first day of AePS going live, over 500 business correspondents were onboarded from remote locations. Gayatri Bank experienced a significant boost in revenue and transaction volumes, as they were able to service more customers with greater convenience without incurring the costs of opening bank branches or ATM machines.Gayatri Bank was able to deliver the following benefits to customers.<ul class="list-node" id="jdlfreaa5"><li>Facilitated secure transactions using UIDAI biometric authentication</li><li>Delivered 6X improvement in transaction efficiency</li><li>Cut down execution time by 1/5th of the usual timing</li><li>Financially empowered senior citizens and the differently abled</li><li>Eliminated the need to carry smartphones or cards</li><li>Abolished the need to remember passcodes, PINs, or CVV numbers</li><li>Enabled secure transactions at remote locations without bank branches or ATMs</li></ul>Want to know more about future-proofing your banking operations?Fill in this form, <a class="link" href="https://forms.office.com/pages/responsepage.aspx?id=ifAFNAS-IkODQGVQ8t7uCirHU8VuF0lOoEkDdSuTc_NUM1pGMEVOR1pPNFMwNUZRNk8yR1RBSDQ1Qy4u">click here</a>.Or you can write to us at <a class="link" href="mailto:business@m2pfintech.com">business@m2pfintech.com</a>.

Unlock the Future of Banking with Next-Gen Core Banking Solutions

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2023/01/Fintech-trends-banner-2.webp" alt="M2P Fintech" title="" width="100%" height="358">2022 was a rollercoaster for the fintech industry. Macroeconomic upheavals, intensifying competition, and regulatory headwinds contributed to the great fintech reset. However, with advances in technology innovation, increasing digital adoption, and improving public infrastructure, the industry overcame hurdles and emerged stronger. Swimming against the tide with turnaround strategies and course corrections, fintech businesses collaborated, consolidated, and diversified to enable sustainable and accessible financial solutions without compromising on people, compliance, and growth. Now, the future of fintech is bright. Blurring boundaries and transforming the way people transact, fintech has been a beacon of hope to many. People across all walks of life and in remote corners without access to fancy smartphones and devices have been able to access digital banking and financial services just by using biometrics and other fintech-led payments. Fintech companies have played a phenomenal role in facilitating this financial inclusion without greater emphasis on security, speed, or convenience. Valued at around $132 billion in 2022,&nbsp;the fintech industry is estimated to grow at 25% CAGR to reach <a class="link" href="https://www.marketdataforecast.com/market-reports/fintech-market">$324 billion</a> in 2027. The ability to improve accessibility, drive inclusion, enhance customer experience, and reduce costs are key drivers behind the growth projection.&nbsp;&nbsp;<a class="link" href="https://m2pfintech.com/blog/future-of-core-banking-systems/">Core Banking</a>, <a class="link" href="https://m2pfintech.com/blog/rbis-new-digital-lending-guidelines-will-it-be-a-game-changer/">Digital Lending</a>, <a class="link" href="https://m2pfintech.com/blog/factors-and-psychology-behind-the-great-bnpl-allure/">Buy Now Pay Later</a> (BNPL), <a class="link" href="https://m2pfintech.com/blog/upi-the-driver-of-economic-growth-and-inclusion/">Unified Payments Interface (UPI),</a> Credit Cards, and other <a class="link" href="https://m2pfintech.com/blog/ready-to-sneak-peek-into-global-cashless-societies/">Cashless</a> Payment modes dominated markets, while Blockchain emerged resilient with RBI adopting the technology for CBDC. Collaborations, consolidations, and platformizations last year set a great tone for 2023.<h2 class="heading-node" id="qp5iitvs9" style="text-align: justify">Trends we can expect in 2023</h2>Consistent customer-centric innovations, partnerships between banks and fintechs, regulatory interventions, and better accessibility - all point towards a promising future for fintech. Here are a few trends we can expect to see in 2023.<ul class="list-node" id="jxu8ecnrq"><li><a class="link" href="#embeddedfinance">Embedded Finance</a></li><li><a class="link" href="#sf">Sustainable Fintech</a></li><li><a class="link" href="#af">Alternative Financing</a></li><li><a class="link" href="#sa">Super Apps</a></li><li><a class="link" href="#ai">Artificial Intelligence</a></li><li><a class="link" href="#cp">Contactless Payments</a></li><li><a class="link" href="#bc">Blockchain</a></li><li><a class="link" href="#mv">Metaverse</a></li></ul><h3 class="heading-node" id="embeddedfinance" style="text-align: justify">1. Embedded Finance &nbsp;</h3><a class="link" href="https://m2pfintech.com/blog/embedded-finance-101-the-bridge-connecting-tech-and-financial-services/">Embedded finance</a> will see exponential growth in 2023 with emerging models that will help businesses thrive. Valued at over <a class="link" href="https://www.simon-torrance.com/blog/EmbeddedFinance1#:~:text=Embedded%20Finance%20offers%20one%20of%20the%20most%20exciting,value%20of%20the%20world%E2%80%99s%20top%20thirty%20banks%20today.">7 trillion-dollar</a>, embedded finance enables smooth integration of financial services into non-financial platforms or applications. Subsets of embedded finance viz., embedded credit, embedded payments, embedded insurance, and embedded banking will majorly benefit SMEs, MSMEs, and other app-based businesses by helping them scale product offerings and customer lifetime value while monetizing their customer base. As the embedded finance space grows, businesses will have the leeway to lower expenses, increase revenue streams, and innovate to deliver personalized, customer-centric products and services, while fintechs handle the heavy lifting on technology, compliance, and delivery.<h3 class="heading-node" id="sf" style="text-align: justify">2. Sustainable Fintech</h3>As the world heads towards net-zero and decarbonization by 2030, fintechs need to take sustainability seriously. In 2023, financial health, <a class="link" href="https://m2pfintech.com/blog/how-m2p-maps-sustainability-with-finance/">sustainable practices,</a> and environmental well-being will be deeply interconnected. A recent Eurogroup survey shows us that 67% of consumers demand sustainability engagement from their bank. &nbsp;And according to a study by Cornerstone Advisors, 70% of Gen-Z and Millennial consumers wanted to track their carbon footprint. Customers are eager to understand how their spending habits affect climate change and if their financial service provider invests in businesses that harm the environment. Being transparent with sustainability practices, incentivizing sustainable engagement, and introducing metrics to track climate impact, could be starting steps to transform businesses into <a class="link" href="https://m2pfintech.com/blog/climate-fintech-fintechs-leading-the-green-tech/">green powerhouses</a>.<h3 class="heading-node" id="af" style="text-align: justify">3. Alternative Financing &nbsp;</h3>There was a time when traditional financial players dominated the lending industry. But those times are changing now. Secure alternative financing options from non-banking fintech companies are emerging rapidly. In fact, the alternative financing industry is valued at <a class="link" href="https://www.grandviewresearch.com/industry-analysis/alternative-financing-market-report">$6.62 billion</a> and is expected to grow at 20% in 2023. The lending industry is democratized with co-lending business models to serve versatile customers, SMEs, MSMEs, and businesses across size and scale.&nbsp;With more core lending players entering the game, evolving regulatory frameworks, and a vast consumer base in need and with access to equitable financial instruments, the alternative financing market is ripe for the taking.<h3 class="heading-node" id="sa" style="text-align: justify">4. Super Apps&nbsp;</h3>2023 will the year for <a class="link" href="https://m2pfintech.com/blog/super-apps-in-consumer-banking-what-role-does-open-banking-play/">super apps</a>. It will be the swiss army knife for businesses as it consolidates multiple applications and eliminates the need for customers and employees to toggle between disparate applications. Just one super app will be able to provide enhanced mobile-first experiences across an aggregated range of services for the growing digital-native generation. Gartner predicts that by 2027, more than 50% of the global population will be active users of super apps. So, it's high time financial businesses leverage the first-mover advantage and develop super apps that fuses the beneficial attributes of an app, platform and digital ecosystem.<h3 class="heading-node" id="ai" style="text-align: justify">5. Artificial Intelligence (AI)</h3>High on data and customer experience, fintech industry will rely heavily on AI for analytics, decision-making, and customer support. Facilitating seamless onboarding, compliance, product customizations, and payments, AI will be the game changer that reduces overhead cost and operational risk along with improving security, and sorting legacy issues. Valued at <a class="link" href="https://www.grandviewresearch.com/industry-analysis/artificial-intelligence-in-fintech-market-report">$9.4 bn</a>, <a class="link" href="https://m2pfintech.com/blog/how-is-ai-changing-the-financial-industry-top-6-use-cases-in-fintech-and-banking/">AI in fintech</a> holds a 16.5% growth potential. And Machine Learning (ML)-based models have been adopted by companies in the financial space to ace real-time target marketing and risk management. But here’s the billion-dollar question. Will AI ever replace humans in fintech? We don’t think so. &nbsp;Complement yes. But not replace.<h3 class="heading-node" id="cp" style="text-align: justify">6. Contactless Payments</h3>The pandemic made contactless payments and shopping the new norm. And there’s no turning back from there.&nbsp; Offering immense speed, security, hygiene, and convenience, technologies like NFC, RFID, and QR codes have simplified checkouts and have taken the payments industry by storm. Valued at $2.2 bn, the contactless payments market is expected to grow at 20% CAGR to reach <a class="link" href="https://www.businesswire.com/news/home/20220106005590/en/The-Worldwide-Contactless-Payment-Industry-is-Expected-to-Reach-12.6-Billion-by-2030---ResearchAndMarkets.com">$12 bn</a> by 2030. As research firms predict exponential growth in wearables, smart devices and contactless cards, fintechs must keep up with the demand for contactless payments.<h3 class="heading-node" id="bc" style="text-align: justify">7. Blockchain</h3>The future of <a class="link" href="https://m2pfintech.com/blog/blockchain-and-fintech-use-cases-and-applications/">blockchain</a> is solid despite setbacks like the crypto crash. Its inherent strength in security, transparency, speed, cost efficiency, and efficient storage will play out as Web3 and <a class="link" href="https://m2pfintech.com/blog/central-bank-digital-currency-cbdc-101-a-primer/">CBDC</a> adoption increases. Blockchain-based data sharing, smart contracts, payment tracking, peer-to-peer lending, encryptions, decentralized architectures and ecosystems, and cybersecurity will be key emerging trends in 2023. The fintech blockchain market size is expected to hit <a class="link" href="https://www.marketsandmarkets.com/Market-Reports/fintech-blockchain-market-38566589.html#:~:text=The%20FinTech%20blockchain%20market%20is%20expected%20to%20grow,Rate%20%28CAGR%29%20of%2075.9%25%20during%20the%20forecast%20period.">$6.2 mn</a> by the end of 2023. So, it's high time fintechs give blockchain some mndspace.<h3 class="heading-node" id="mv" style="text-align: justify">8. Metaverse</h3>Sparking some of the hottest tech discussions, metaverse shook the world with its decentralized, community-owned, virtual utopia. &nbsp;Though in the early developmental stages, metaverse is considered to be the next big evolution in the world of fintech, with the potential to transform how people work, shop, live, and transact. According to a recent Goldman Sachs research, metaverse could give rise to a <a class="link" href="https://newseu.cgtn.com/news/2022-06-13/Metaverse-valued-at-12-trillion-a-year-to-the-global-economy-1aKNYwIjyp2/index.html">$12 trillion</a> virtual economy with intense activity around cross-border payments, financial assets creation, safekeeping and trading. Leveraging Virtual Reality (VR) and Augmented Reality (AR), this virtual phenomenon enables fun and personalized banking and transactions. But the flipside of metaverse is the security concerns that may arise, which if addressed will hold massive promises for the fintech industry. With this we conclude our fintech trends for 2023. While it is challenging to predict exactly how fintech will unfold, we can say with reasonable certainty that 2023 will be an interesting one for the industry, India, and the world. What do you think of these trends? Let us know in the comments! Have a great 2023! Stay connected for the latest fintech news, views, updates, and more.<a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox. Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

8 Fintech Trends to Look Out for in 2023

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/11/Super-Apps-in-Banking-blog_Word-press.webp" alt="M2P Fintech" title="" width="100%" height="479">Imagine an app that allows you to access your bank accounts, make payments, take out loans, handle your insurance policies, monitor your investment dashboard, and more—all in one!Wouldn't that be the epitome of convenience? Such nifty apps are no longer a fiction.&nbsp;Embrace yourself when we say these SUPER APPS are on their way to radically disrupt the way we know accessibility in digital banking.&nbsp;Before diving deep into Super apps in consumer banking, let us quickly recap what a Super app is.<h2 class="heading-node" id="ny0ld8tzi" style="text-align: justify">What are Super apps?</h2>A Super app is a single portal that powers a wide range of functions and services shaped around users' daily lifestyle needs. Technically, a super app is a collection of multiple niche applications that establish an ecosystem of fully-integrated third-party services aided by a payment system. This creates a mini operating system that acts like a digital assistant, working at the user's convenience as one can stay in the app to carry out a multitude of tasks.Although the concept has been creating massive buzz recently, it isn't new. Businesses like TenCent, Alipay, Grab, Paytm, and Gojek have been the frontrunners for years. Let us give you a quick overview of how some of these companies support an all-inclusive platform.TenCent is a Chinese company that started as a simple messaging platform (named WeChat). Once they built their billion-plus customer base, they slowly set up a network of services, including virtual wallets, payments, hotel reservations, taxi rides, medical consultations, games, and much more.An example that is closer to home is Paytm. In 2010, Paytm was launched as a payment application. Today, it offers a comprehensive set of services, including online shopping, credit cards, loans, repayments, microloans, BNPL, insurance, ticketing services, retail brokerage products, online games, and more on its platform. Given the platforms' extensive acceptance, several fintechs are now trying to recreate a similar model customized to their customer bases.<h2 class="heading-node" id="zehxh25s4" style="text-align: justify">What makes them Super?</h2>What marks off a Super app from a regular app is the element of multifunctionality, comprehensiveness, and data privacy. Further, it best suits businesses with extensive data and a large customer base. In addition, rendering a gamut of services and products through one application gives customers a sense of belonging, ownership, and safety, which significantly enhances the customer experience.Here are some of the key factors that contributed to the popularity and success of Super apps.One-click relevance: Provides customers with personalized overviews and product offers. Rolling everything customers need to transact through daily life into a Super app is one way to core relevance and success.&nbsp;Real-time communications: Chatbot interactions that offer real-time assistance, including upselling, fraud prevention, nudges, and recommendations.&nbsp;Connectivity: Anything from financial, business, lifestyle, and health to government can be accessed through one app.<h2 class="heading-node" id="n493lw6t3" style="text-align: justify">Super apps in Consumer Banking</h2>Super apps in the banking sector are a rare feat. Conversely, fintechs quickly recognized the potential of enabling ultra-personalization and budget automation using AI-powered financial assistants. They are keen to build Super apps that can leverage aggregators with established digital marketplaces to connect users with an existing ecosystem for digital banking and financial services.Ideally, a financial Super app is a multi-function digital banking and <a class="link" href="https://m2pfintech.com/blog/the-rise-of-digital-payments/" target="">payments</a> solution featuring financial services that are beyond payments. The app must enable consumers to perform most of their daily activities digitally, like bill and fee payments, purchases, fund transfers, bookings, tickets, subscriptions, investment management, and insurance purchases and management. Interestingly, the list can keep adding as many functionalities as possible to improve customer engagement and satisfaction.According to recent studies, about 50% of consumers use mobile application or website at least once a week to interact with their bank. This stands as a testimony that today's consumers and businesses expect their banks to be a tap away and swiftly adapt to their digital needs. Experts believe, with embedded finance and open banking, any provider can become a super app that serves as a gateway that delivers the ever-growing demand for convenience in the banking process — rather than just a series of disconnected/loose-ended financial services.When it comes to consumer banking, it's all about comprehensive experience in a Super app environment. And it takes more than just tech. It requires full partner-network management, a clear understanding of compliance, rights, responsibilities, liabilities, commitment to developing a broad-ranging ecosystem, and more. For instance, a <a class="link" href="https://m2pfintech.com/blog/neo-banking-101-all-you-need-to-know/">Neobank</a> can provide an 'N' number of financial products and services by integrating with regulated FI at the back end and tech-driven fintech at the front end.Essentials of Financial Super apps Intuitive user experience and interconnectedness are the cornerstones of a financial Super app. These will allow users to easily access all available features. Here are some of the key elements that a financial Super app must include:<ul class="list-node" id="52ez20cgw"><li>Shared wallet&nbsp;</li><li>Savings accounts&nbsp;</li><li>Budgeting tools&nbsp;</li><li>Bill reminders</li><li>Auto bill payments&nbsp;</li><li>Managing subscriptions&nbsp;</li><li>Investment options&nbsp;</li><li>QR code payments and rewards</li></ul><h2 class="heading-node" id="sw6d1s7fn" style="text-align: justify">How Open Banking powers Super apps?</h2>Super apps use financial data from multiple sources to create financial products and services to meet customers' needs.But how do they get to know what their users need?What provides them with the information they need to create an omni-channel experience?Enter Open Banking.Open banking is the foundation of interoperability in the banking sector. For novices, Open Banking system uses <a class="link" href="https://m2pfintech.com/blog/api-the-power-that-drives-new-age-banking-ecosystems/">APIs</a> to provide third-party financial service providers access to consumer banking, transactions, and other financial data from banks and NBFCs. To understand the working of Open Banking, read <a class="link" href="https://m2pfintech.com/blog/open-banking-a-primer-2/" target="_blank" rel="noopener">here</a>.The Open Banking system presents the platform with a spectrum of opportunities to tailor financial services to cater to each user's requirements. It employs advanced technologies like AI, ML, and Data Analytics to maximize personalization and build customer-relevant products by leveraging customers' data. Using advanced technology to analyze data and develop customer-centric products/services fosters data-sharing culture and data-driven decision-making across the ecosystem.With the help of Open Banking, Super apps can empower customers to check their account balances, make payments, track recent transactions, and perform other traditional banking operations from the app's digital wallet. This strikingly reduces the need to access a bank's app. In addition, as Open Banking expands into open finance and open data, Super apps can access and connect with a wide range of partners to augment go-to-market speed for new products and broader their customer base.<h2 class="heading-node" id="9eqqd85qv" style="text-align: justify">API Inference</h2>API infrastructure is the essence of embedded finance and open banking. A good API provider wraps intricacies like disputed payments and connecting to multiple suppliers inside the API system. This allows intended apps to work together in several ways and develop a comprehensive ecosystem. In addition, APIs empower Super apps to handle extensive, inter-connected data through multiple levels without disturbing the user journey. Fintechs leverage APIs to seamlessly incorporate functionalities into cloud-native apps. They employ full-fledged, mobile-first, customizable API stack to simplify consumer banking and enable end-to-end customer-centric retail offerings.Want to understand the nuts and bolts of Super apps? Write to us at <a class="link" href="mailto:business@m2pfintech.com">business@m2pfintech.com</a>&nbsp;&nbsp;To boot, what would an ideal Super app be for you? Let us know in the comments below.&nbsp;<a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a> to our newsletter and get the latest fintech news, views, and insights directly to your inbox.&nbsp;Follow us on <a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a> and <a class="link" href="https://twitter.com/m2pfintech">Twitter</a> for insightful fintech tales curated for curious minds like you.

Super Apps in Consumer Banking - What Role does Open Banking Play?

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/09/MicrosoftTeams-image-9.webp" alt="M2P Fintech" title="" width="100%" height="253">The world of banking has transformed over the years. Customer experience has now become a key differentiator. Personalization, speed, convenience, and security have evolved as factors that determine profitability.To keep pace with the changing customer expectations and the competitive landscape, banks need to modernize their core banking systems. Only then can they scale technology innovation, upgrade processes, and re-engineer their workforce to deliver mobile-first, personalized customer experiences while reducing cost and complexities.Go beyond the surface and explore more.<ul class="list-node" id="dnjdyenon"><li><a class="link" href="#21">What are Core Banking Systems?</a></li><li><a class="link" href="#11">Evolution of Core Banking Systems</a></li><li><a class="link" href="#31">Turing Core Banking System (CBS)</a></li><li><a class="link" href="#41">What’s New in Core Banking?</a></li><li><a class="link" href="#51">Final Word</a></li></ul><h2 class="heading-node" id="21" style="text-align: left">What are Core Banking Systems?</h2>Centralized Online Real-time Environment (CORE) banking systems serve as the technical infrastructure that enables banks to manage their day-to-day operations efficiently and seamlessly. They facilitate branch agnostic transactions across multiple touchpoints worldwide.Hosted on-premise or in the cloud, core banking provide a singular view of customer data to facilitate information flow and operational excellence across delivery channels. It simplifies services such as new account creation, customer relationship management, transaction processing, loan issuing, and servicing. Banks can achieve greater cost and operational efficiencies by making the big shift from legacy to modern <a class="link" href="https://m2pfintech.com/blog/core-banking-essentials-types-components-advantages/">core banking solutions</a>.<h2 class="heading-node" id="11" style="text-align: left">Evolution of Core Banking Systems</h2>Core banking is not a new phenomenon. It had a humble beginning in the 1970s with rigid codes and basic computerizations and evolved with technological advances, product innovations, and customer requirements to be what it is today.<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/09/Infpgraphic-1.webp" alt="M2P Fintech" title="" width="100%" height="253"><h3 class="heading-node" id="hefhm2ugl" style="text-align: left">1st Generation Core Banking System – Basic Computerization</h3>From 1970 to 1990 CBS began taking root in the banking industry. At its most primal form, the system functioned on basic computerization techniques and was developed in-house by most banks.The 1st gen CBS used monolithic applications that were based on complex codes. The IT costs were quite high, and it offered only a few basic features like transaction execution, record-keeping, and customer data management. Sequential data were stored in silos, and transactions were processed in batches at the end of the day.So, <a class="link" href="https://m2pfintech.com/blog/tale-of-money-transfers-from-hawala-to-one-click-remittances/">money transfers</a> and <a class="link" href="https://m2pfintech.com/blog/future-of-payments-processing-matched-with-industry-needs/">payments</a> could not be processed in real-time. The applications were accessible to users only during counter hours. The system was prone to data loss and was difficult to replace without causing a service disruption.<h3 class="heading-node" id="lk1xsezsg" style="text-align: left">2nd Generation Core Banking System - Product-centric Digital Interface</h3>From 1990 to 2005, CBS was in its product-centric avatar with a penchant for digital interfaces. The infrastructure developments were outsourced to external parties that focused on building a vibrant user interface for 24/7 access to banking services.Software modules and a few subroutines were introduced to improve the flexibility of the code. But, even after several optimization trials, the code remained complex. This made processing large volumes of transactions tougher. And banking data were still organized in silos.Client programs were slowly added even though the standards were still mainframes. Software that was previously accessible through branch networks now became available to customers at ATMs and payment terminals. However, during maintenance, the system still faced prolonged service disruption.<h3 class="heading-node" id="i8wq3v74b" style="text-align: left">3rd Generation Core Banking System - Customer-centric Processes</h3>2010 was the year 3rd generation CBS came into prevalence. It was a major leap from the yesteryear computerizations and product-centric interfaces. CBS became more customer-centric, and banks began building a digital layer to improve flexibility.The first programming interfaces appeared, and the core banking software was accessible on the Internet. The software architecture became less monolithic, and the system started to adapt to newer structures, such as Application Service Providers (ASPs) and Service-Oriented Architectures (SOAs).On the user experience side, newer milestones were achieved, and now version changes could be performed in a shorter span of time. Truly graphic interfaces in HTML and Windows pages were introduced.The infrastructure was completely customer focused. But things started to change when the pandemic struck in 2020. Customer needs, expectations, journeys, and touchpoints underwent a radical transformation.Modern core banking systems came around to save the day. It kickstarted digital transformation in traditional banks and helped new-age banks accelerate next-gen customer experience. API-led core banking architectures enable banks to scale reliable and strong banking ecosystems with frictionless, rapid integrations.<h3 class="heading-node" id="2ndpajyzi" style="text-align: left">4th Generation - Next-gen Core Banking via Platformization</h3>After 2020, 4th generation core banking systems came into prevalence. Platformization of CBS evolved as a crucial development, transforming the core from being only a system to becoming a complete platform.Going beyond traditional models, modern core banking platforms give banks the agility to scale and fully leverage the potential of digital revolution to satisfy stakeholders such as customers, employees, regulators, and partners.&nbsp;However, traditional banks with legacy core banking platforms still grapple with silos, code rigidity, and complexities. Even though their financial processes are automated and newer distribution channels are in place, legacy systems hinder adaptive flexibility to changing customer journeys and behavior, closed ecosystems, and vendor lock-ins. They also result in higher maintenance costs, slower GTM speed, and do not support instant releases.<a class="link" href="https://m2pfintech.com/blog/unlock-the-future-of-banking-with-next-gen-core-banking-solutions/">Next-generation core banking</a> platform breaks down all the barriers that legacy systems impose. They accelerate digital transformation using modern, scalable, and open architectures and lightweight codes. Leveraging APIs and advanced technologies like machine learning, core platforms deliver simplicity, cost efficiency, speed, interoperability, flexibility, security, and future readiness.<h3 class="heading-node" id="c3fg1qz8n" style="text-align: left">Benefits of Next-gen Core Banking Systems</h3><ul class="list-node" id="zkhhkcwra"><li>Simplicity in scaling up</li><li>Agility to accelerate new product launches</li><li>Incredible go-to-market speed</li><li>Onboarding and setting up happen in a few clicks</li><li>Advanced security systems for data storage and fraud prevention</li><li>Centralized access to account aggregators, mobile and third-party applications</li></ul><h2 class="heading-node" id="31" style="text-align: left">Turing Core Banking System (CBS)</h2>Turing Core Banking System (CBS) is a next-gen platform that focuses on customer experience, operational excellence, and security well within the regulatory framework. It is built on the latest micro-services architecture with low code and an <a class="link" href="https://m2pfintech.com/blog/api-the-power-that-drives-new-age-banking-ecosystems/">API</a>-first, cloud-agnostic platform making it a modern and futuristic core banking system.<h3 class="heading-node" id="lb5majzyt" style="text-align: left">Unique Features of Turing</h3><ul class="list-node" id="mlvnqk619"><li>Incredible Speed of innovation (using <a class="link" href="https://m2pfintech.com/blog/how-is-ai-changing-the-financial-industry-top-6-use-cases-in-fintech-and-banking/">AI and ML</a>)</li><li>Flexibility (low code capabilities)</li><li>Agility (hyper-personalized products)</li><li>Pre-integrated with Fraud Risk Management (FRM) engine</li></ul>Furthermore, the primary vantage point of 4th Generation CBS is its ability to evolve and adapt to emerging trends in the financial industry.&nbsp;<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/09/Whats-new-in-core-banking.webp" alt="M2P Fintech" title="" width="100%" height="253"><h3 class="heading-node" id="ee2asr4hj" style="text-align: left">Open Banking and APIs&nbsp;&nbsp;</h3><a class="link" href="https://m2pfintech.com/blog/open-banking-a-primer-2/">Open banking</a> and the utilization of APIs are key drivers in the next generation of core banking platforms. APIs empower financial institutions to seamlessly integrate with third-party banking solutions, enhancing their service offerings and expanding their reach within the digital ecosystem. This synergy facilitates innovation and the creation of a comprehensive banking experience.&nbsp;<h3 class="heading-node" id="ezrisfcla" style="text-align: left">AI and Machine Learning&nbsp;</h3>The integration of artificial intelligence (AI) and machine learning revolutionizes core banking software. These technologies provide predictive analytics, bolster fraud detection, and deliver personalized customer experiences. Harnessing the insights from vast data pools, AI and machine learning empower banks to make informed decisions, streamline operations, and foster heightened customer satisfaction.&nbsp;<h3 class="heading-node" id="z6cl9klc2" style="text-align: left">Enhanced Security Protocols&nbsp;</h3>As digital transactions become more common, security remains paramount. Multi-layered security protocols, including biometric authentication, two-factor authentication, and end-to-end encryption, are being woven into the fabric of core banking systems. These measures are crucial in safeguarding sensitive customer data and maintaining trust in an increasingly digital landscape.&nbsp;<h3 class="heading-node" id="muek4aumh" style="text-align: left">User-Centric Design&nbsp;&nbsp;</h3>Modern core banking software centers on user-centric design principles. Intuitive interfaces, personalized dashboards, and mobile responsiveness are integrated to ensure that both bank employees and customers enjoy a seamless and intuitive banking experience.&nbsp;<h3 class="heading-node" id="ivow0e1u7" style="text-align: left">Sustainable Banking&nbsp;</h3>The evolution of core banking goes beyond technological advancements and encompasses sustainability, embracing the principles of <a class="link" href="https://m2pfintech.com/blog/climate-fintech-fintechs-leading-the-green-tech/">green fintech</a>. Core solutions align with global concerns about climate change and social responsibility by integrating features that facilitate green investments and enable carbon footprint tracking.&nbsp;<h3 class="heading-node" id="i4q9dhpvd" style="text-align: left">Integrating Decentralized Finance (DeFi)</h3>Blockchain technology and cryptocurrencies are reshaping the financial system. Some core banking software is now incorporating DeFi integrations, enabling banks to offer services related to crypto trading, lending, and borrowing.&nbsp;<h3 class="heading-node" id="x6n64jqoo" style="text-align: left">Chatbot Interfaces&nbsp;</h3>Voice assistants and chatbots are being integrated into banking systems to provide instant customer support and assist with transactions. Customers can perform banking tasks using natural language, simplifying interactions, and reducing the need for manual assistance.&nbsp;<h2 class="heading-node" id="51" style="text-align: left">Final Word</h2>The future of banking is driven by digital innovation, connectivity, and a steadfast focus on customers. Modernizing the core is no longer a choice, it is a dire requirement for banks to grow with agility, efficiency, and customer-centricity.&nbsp;Want to know more about modernizing your core banking system?Write to us at <a class="link" href="mailto:business@m2pfintech.com">business@m2pfintech.com</a>.<a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox.Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a> for insightful fintech bytes curated for curious minds like you.

Future of Core Banking Systems

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/07/MicrosoftTeams-image-9.webp" alt="M2P Fintech" title="" width="100%" height="253">The ecommerce market in India is growing at a dynamic pace. Estimated to reach $188 billion by 2025, the sector received $15 billion in investments from private equity and venture capital firms in 2021. At this rate, the Indian ecommerce industry will surpass the US to become the second largest online commerce market by 2034. Xpressbees, Amazon, Flipkart, and Cars 24 are some of the leading ecommerce firms that are making big waves with their investment and expansion plans.Rising smartphone penetration, evolving customer expectations, and convenient digital payments play a major role in the ecommerce boom. Online transactions in the Indian ecommerce ecosystem are estimated to grow by 96% to touch USD 120 billion by 2025. The growth of digital payment options such as credit cards, debit cards, prepaid cards, UPI, and BNPL added impetus to online shopping transactions.In this article, let’s decode the anatomy of payment card transactions in an ecommerce setup.Payment processing is how businesses complete credit and debit card payments. It includes authorization, funding, and settling of a transaction. For a consumer, an online card transaction is a pretty straightforward process that happens within a few seconds. All they need to do is enter the card details, and authorize the transaction with an OTP.And voila! The transaction is successful.<h2 class="heading-node" id="zpom3032i">Key Players in Ecommerce Payments</h2>While the entire transaction may only take seconds, it involves a complex network with multiple steps and players behind the scenes. Here are the players involved in carrying out a transaction.· Cardholder (customer with the payment card)· Merchant (ecommerce website)· Payment Gateway· Payment Processor· Card Network· Issuing Bank· Acquiring BankNow, we are sure you know who a cardholder and a merchant is. So, let’s take a deep look at other players and their role in card transactions.<h2 class="heading-node" id="wpqhfks61">Payment Gateway</h2>A payment gateway (PG) is a service that authorizes transactions between online businesses and their customers in a secure and convenient way. In simple terms, it acts as a secure tunnel between the merchant’s payment portal and the payment processor.<h2 class="heading-node" id="ifw2nj4oj">Role of Payment&nbsp;Gateway</h2>A payment gateway is a central cog in the transaction processing ecosystem for both online and in-store purchases. In a transaction process, PG is the front-end mechanism that collects, authenticates cardholder information, and transfers the details to the merchant’s bank in real-time. Then, the transaction is processed in the merchant’s bank. All payment gateways are PCI-DSS compliant and SSL-certified.For example, imagine you go to an online store, pile up your cart, and click on check-out for billing. When you enter your payment method and details on the website, a payment gateway helps you transfer money to the merchant.<h2 class="heading-node" id="y8i3jrc7z">Payment Processor</h2>A payment processor is a vendor service that acts as a conciliator between the financial institutions and the merchant involved. It facilitates authorization of the transactions and relays the data to clear and settle the transactions for the merchant. Some payment processing services include card acceptance, PCI compliance assistance, security solutions, and customer support.<h2 class="heading-node" id="l1mstpbl2">Role of a Payment Processor</h2>In a transaction, the payment processor acts as a tunnel between the merchant and the customer banks. It takes the information from the payment gateway and connects with the issuer through the card network to authenticate and approve the transaction. The role of the payment processor is summarized below:· Seek authorization for a transaction· Connect with the cardholder’s issuing bank· Transfer funds into a merchant account<h2 class="heading-node" id="5l1rujvkp">Card Network</h2>A card network is a card infrastructure provider that facilitates payment card transactions between the issuer and the merchant. Conventionally, the network validates, processes, and sets the terms for the card transactions. The major card networks in India are MasterCard, Visa, RuPay, Discover, and American Express.<h2 class="heading-node" id="0cnrfhxyg">Role of a Card&nbsp;Network</h2>The card network acts as a communicator between the merchant’s acquiring bank and the customer’s issuing bank. It is responsible for transmitting the transaction information to the correct issuing bank, verifying the issuer’s authentication results, and delivering responses to acquirers.<h2 class="heading-node" id="1pkqmuofu">Issuing Bank</h2>An issuing bank is a financial institution or a bank that issues and distributes (credit/debit) cards to customers. It operates as an essential intermediary between the cardholders and the card networks. Despite the common misconception, card networks do not directly issue cards to customers because of the fundamental risks involved in issuing credit to customers. Only issuing banks do.For instance, if a credit card holder does not pay off his or her debts, the issuing bank will write them off. In addition, the issuer will become responsible for recouping the costs. It is important to note that specific card networks like Discover and American Express serve as their own issuing banks.An issuing bank is typically a commercial consumer bank, commonly known as the issuers. It provides the framework to facilitate reliable and regulated transactions and the rules and standards for payments performed on its system.<h2 class="heading-node" id="2esexjmnq">Role of an Issuing&nbsp;Bank</h2>A card issuing bank is one of the key players in the card transaction and payment processes. Each time a cardholder makes a purchase/payment using a card, the transaction moves through multiple financial institutions and systems before the amount is credited to the merchant’s bank account. The issuing bank assents the transaction based on the customer’s available credit or funds in the account. Upon receiving the authentication request, the issuer’s Access Control Server (ACS) reviews the information, verifies the cardholder using their form of authentication, and responds to the merchant. It also subjects the transaction to its defined set of fraud and risk regulations.In the case of a credit card issuance, an issuing bank generally manages everything on the customer front, such as payment portals, rewards programs, payments, collections, etc. It plays a crucial role in evaluating and determining the credibility of a chargeback. For example, when a cardholder notices a counterfeit or invalid charge made to their credit or debit card, they immediately contact their issuer to file a dispute, kick-starting the chargeback process. The issuer validates the complaint and communicates the chargeback to the acquirer. The acquirer then notifies the merchant to either accept or challenge the chargeback.The issuer is responsible for authenticating the cardholders’ financial information and account data to determine their creditworthiness. Based on the assessment, it extends the line of credit to the cardholders and offers financial support for transactions/payments made with its cards. In addition, the issuing bank also renders essential services such as card activation, setting the purchase limit, suspensions, and card renewals.<h2 class="heading-node" id="p8c1kk2db">Acquiring Bank</h2>An acquiring bank is a financial institution or a bank that offers merchant accounts to businesses. These accounts enable merchants to accept direct debit/credit card payments. An acquiring bank, otherwise known as an acquirer or a merchant’s bank, is a licensed member of a card brand and is responsible for creating and maintaining the merchant’s account. It also manages the communications between card networks and businesses.Usually, the acquirer acts as a payment processor or an Independent Sales Organization (ISO) and processes credit/debit payments on behalf of a merchant. It provides merchants with unique IDs to manage card payments. In turn, the merchants pay a significant fee to the acquirer for their services in the transaction process.Transaction processes are prone to various financial frauds, that include breach of sensitive customer information. As a significant player in the payment process, an acquiring bank ensures transaction security and strictly complies with the Payment Card Industry Data Security Standard (PCI DSS). In the event of a fraud or data breach, the acquiring bank stands liable for the compromised transaction(s).<h2 class="heading-node" id="xswoi0hlp">Role of an Acquiring Bank</h2>As the merchant’s bank, acquirers are responsible for routing the payment card transactions to the appropriate issuing banks. Once the issuing bank disperses the amount from the cardholder’s account, the acquirer accepts the payment and credits the money to the merchant’s account. Furthermore, the acquiring bank exchanges fund with various issuers each time a consumer makes a purchase, returns for a refund, or raises a chargeback. It then issues a net balance (gross sales deducting the fees and reversals) to the merchant for transactions during the given period.When a cardholder uses a card in a purchase, the acquiring bank will either accept or decline the transaction based on the card holder’s account information available on the issuing bank and card network’s database. This process entails two steps.Step 1: Authorization — Request the issuer to validate the card details. If sufficient funds are available in the account, the transaction will be completed.Step 2: Authentication — Verify cardholders’ identity based on the card details entered during the purchase. The authentication process is typically carried out using 3D Secure (3DS).<h2 class="heading-node" id="rdmedr6bw">Payment Processing Workflow&nbsp;</h2>All the parties delved upon above are integral players in the card transaction ecosystem. Transactions would not be viable without any one of them.Curious to know how payment card transaction flow works?Let’s take the example of a credit card payment for instance.Here you go!<ol class="list-node" id="nuiohlbzx"><li>The customer initiates a purchase. The purchase can be made in person, online, or over the phone.</li><li>The merchant evaluates the credit card details entered during the purchase and routes the information to the payment gateway.</li><li>The payment gateway routes information to the payment processor.</li><li>The payment processor communicates the authorization request to the appropriate card network.</li><li>The credit card network routes the request to the cardholder’s issuer.</li><li>The issuer validates the received information and approves/declines the transaction.</li><li>The card network sends the issuer’s response to the acquiring bank.</li><li>The acquiring bank redirects the authorization response to the merchant.</li><li>Based on the response, the merchant accepts or declines the transaction. It deposits all the authorized transactions with the acquiring bank.</li><li>The acquirer credits the merchant’s account and submits the transactions to the credit card network for payment.</li><li>The credit card network pays the acquirer and charges the issuing bank.</li><li>The issuer posts the transaction to the cardholder’s account.</li><li>The cardholder receives the monthly statement and makes payment.</li></ol><img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/07/Banner-for-Issuing-and-Acquiring-Banks-blog_2.webp" alt="M2P Fintech" title="" id="lpb5e7uta" width="100%" height="253">Payment processing is an indispensable part of any business, both online and offline. In the stride toward a digital economy, ecommerce payment processing is a modish necessity.Intrigued? To know more about payment processing, write to us at <a class="link markup--anchor markup--p-anchor" href="mailto:business@m2pfintech.com" target="_blank" rel="noreferrer noopener">business@m2pfintech.com</a>.<a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox.Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

Anatomy of Payment Card Transactions in Ecommerce

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/07/July-Blog-Banner-V3_1_Main-Banner.webp" alt="M2P Fintech" title="" width="100%" height="253">Artificial Intelligence (AI) has transformed the physics of financial services. It has altered centers of gravity, isolated vulnerable bonds, and changed traits that are imperative to building a successful business. The ability to leverage data to drive process and talent optimization, product performance, and personalized interactions is now considered critical to driving value and efficiency.By combining technology and robust data, AI delivers insight-driven decisions to resolve challenges. Financial services companies are becoming future-ready by harnessing the power of AI and Machine Learning (ML) to enhance operational efficiency, mitigate risk exposure, and customize product development, distribution, and customer experience.<blockquote class="block-node" id="ll5niu0xi">According to PWC reports, AI will boost global GDP up to $15.7 trillion by 2030 and 45% of total economic gains will arise from AI-driven product enhancements that stimulate consumer demand.</blockquote><h2 class="heading-node" id="fec6" style="text-align: justify">Growth Potential of AI in Finance</h2>Artificial Intelligence in the global financial technology market is expected to grow at <a class="link" href="https://www.prnewswire.com/news-releases/ai-in-fintech-global-market-to-reach-24-17-billion-by-2026--301615420.html">27.6% CAGR and reach $24.17 billion in 2026</a>. The growth projection is attributed to its ability to increase security and efficiency, personalize customer experience, automate services, and unlock several other growth opportunities.91% of financial services companies reported driving critical business outcomes by leveraging AI investments (Source: <a class="link" href="https://www.nvidia.com/content/dam/en-zz/Solutions/industries/finance/ai-financial-services-report-2022/fsi-survey-report-2022-web-1.pdf">Nvidia Report</a>). Here are the benefits they realized.<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/07/July-Blog-Banner-V3_1_Benefits-of-AI-Chart.webp" alt="M2P Fintech" title="" width="100%" height="253">AI-led data analysis and reporting surpass human intelligence to cut costs, accelerate revenue, and optimize service quality and product efficiency. It creates operational efficiency, predicts customer preference, detects fraud, and plans market expansions. Although some industry voices expect AI to replace 9% of all jobs by 2030, fintech companies are optimistic that AI will expand their workforce by 19%.<h2 class="heading-node" id="21fd" style="text-align: justify">How AI Transforms Banking &amp; Fintech</h2>Millennial and Gen Z customers prefer newer and faster technology over traditional systems. AI-based products and services enable FIs to meet the demands of today’s digital-age customers. It helps them enhance user experience through customized products and services.Listed below are sample AI-enabled services that global banks use to enhance customer experience.· Smile-to-pay facial scanning to initiate transaction· Micro-expression analysis with virtual loan officers· Conversational bots for basic servicing requests· Humanoid robots in branches to serve customers· <a class="link" href="https://m2pfintech.com/blog/5-reasons-why-banks-need-behavioral-biometrics/">Biometrics </a>to authenticate and authorize· Machine vision and natural language processing to scan and process documents· Machine learning to identify risk patterns and cybersecurity incidents· Real-time transaction analysis for risk monitoringAI technologies augment the overall customer experience by offering personalized recommendations, insights, and suggestions. In short, AI powers banks, insurers, asset managers, and fintechs to outperform peers, boost customer lifetime value, and increase market share.<h2 class="heading-node" id="fb07" style="text-align: justify">Top 6 Use Cases of AI in Fintech and Banking</h2>Over 75% of businesses use high-performance computing (HPC), machine learning, and deep learning for AI applications. While retail banking and capital markets benefit from deep learning, fintech firms rely on machine learning for the use cases below.<ol class="list-node" id="mglp0g4e6"><li>Transaction Fraud Detection</li><li>Conversational Chatbots</li><li>Robo-Advisors — Portfolio Optimization</li><li>Regulatory Intelligence</li><li>Credit Decisioning</li><li>Algorithmic Trading</li></ol>Transaction fraud detectionFinancial firms leverage AI and ML to identify, investigate, and mitigate transaction fraud, <a class="link" href="https://m2pfintech.com/blog/how-to-combat-money-laundering-2/">money laundering</a>, and <a class="link" href="https://m2pfintech.com/blog/crack-the-kyc-jigsaw-ease-onboarding-compliance/">KYC</a> discrepancies efficiently. Analyzing large datasets and user behavior, AI can decode risk factors and help reduce chargebacks, fake accounts, spam, account takeovers, and any other <a class="link" href="https://m2pfintech.com/blog/prevent-cnp-frauds-with-pci-3ds/">CNP</a> frauds in real-time. The fraud detection use case is critical in banking, card transactions, insurance, and lending platforms, to name a few.Conversational chatbotsChatbots and virtual agents fall under the conversational AI use case. They are quite different from conventional chatbots. By leveraging Natural Language Processing (NLP) and Machine Learning (ML) processes, they can understand customer intent, troubleshoot issues, and make small talk based on context. In financial companies, they can be used to collect customer information, deliver support, resolve queries, and redirect escalations to customer service representatives. These chatbots can be used across multiple channels and can deliver support via audio, video, and text.Robo-advisors — portfolio optimizationBuilding a strong financial portfolio is critical to maximizing returns on investments. Optimizing the portfolio helps balance the risk-to-reward ratio. AI-enabled Robo-advisors use predictive analysis to foresee future returns by analyzing the trends in the financial market. Investment companies can use this feature to make data-driven decisions that increase sales, optimize resource utilization, and improve operational capabilities. Robo-advisors are less priced options than conventional financial advisors. Even novices can drive value from investments with the help of Robo-advisors.Regulatory intelligenceThe banking and fintech sector must constantly update operations to stay compliant with governments and regulators. Using AI-led automation, compliance obligations are simplified, streamlined, and automated. The personalized, role-based dashboards provide regulatory intelligence for data-driven decisions at a lesser cost and time. Finance companies can stay up to date on compliance status and keep abreast with the latest regulations.Credit decisioning engineAI-based credit scoring can help expedite the assessment of creditworthiness and lending decisions. AI-led credit scoring models analyze real-time indicators such as current income, employment opportunities, and potential ability to earn, in addition to credit history, transaction patterns, work experience, and online behavior. This enables a sensitized and customized credit score assessment and inclusive lending decisions.Algorithmic tradingTrading is all about making profitable transaction decisions. AI-driven algorithmic trading uses pre-trade analytics and trading strategies to make lucrative transactions and groom efficient traders. Assimilating its own data using machine learning methods, AI-based algorithmic trading delivers real-time forecasts based on the analysis of price change patterns, currency values, global indices, raw materials, and other macro/micro indicators. It is super accurate in detecting market anomalies and helps reduce operational and trading risks.Now, these are not all. Apart from the use cases discussed above, AI can also help automate and expedite <a class="link" href="https://m2pfintech.com/blog/steps-in-credit-underwriting-why-using-an-alternative-source-of-data-and-behavior-metrics-will-be-of-help/">underwriting</a>, customer acquisition, and marketing optimization.To know more about the use of AI in banking and fintech, write to us at&nbsp;<a class="link au nr" href="mailto:business@m2pfintech.com" target="_blank" rel="noopener ugc nofollow">business@m2pfintech.com</a><a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox.Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

How is AI Changing the Financial Industry? Top 6 Use Cases in Fintech and Banking

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/07/MicrosoftTeams-image-3.webp" alt="M2P Fintech" title="" width="100%" height="447"><a class="link" href="https://m2pfintech.com/blog/neo-banking-101-all-you-need-to-know/">Neobanks</a> have led to tectonic shifts in every corner of the financial services market. The market embraces a new player almost every day with a prime intention to simplify financial services to meet the ever-evolving expectations of the digital-age customers.According to recent reports, some of the most prominent players in the market see over 140% year-on-year growth in their customer base. However, growth does not necessarily translate into profits. Even after more than five years in business, a large number of neobanks are operating at a loss.Globally, the neobank market continues to grow swiftly. But the real question is, how many of these banks will succeed and be sustainable?We have our very own Devang Mehta, Vice President of Business Development spill the beans on what makes a neobank successful. Devang delves into the pros and cons of the current business model and offers insightful strategies on how to refine vision and value propositions that will help build a neobank that is both profitable and sustainable.Being an avid neobanker and fintech enthusiast himself, he is certain that neobanks are here to stay and have a long way to go. He also shares his vision of a neobank that works like your relationship manager on the phone.Here are key nuggets from Devang’s wisdom.<h2 class="heading-node" id="852f" style="text-align: justify">What are the wins?</h2>First off, neobanks enable online transactions round-the-clock, 365-days. They offer easy, convenient, and on-the-go services. Users can transfer funds instantly at any time, from anywhere, without worrying about bank working hours/days. The business model is usually transparent and delivers real-time notifications detailing the reasons for the charges and penalties incurred by the customer.They have low operational costs due to the absence of physical branches, minimal credit risks, and fewer regulations. Thereby, customers benefit from lower prices and higher interest rates. With its lean business models and superior technologies, neobanks greatly emphasize customer orientation by offering personalized services and products.<h2 class="heading-node" id="eae8" style="text-align: justify">Where do neobanks fall short?</h2>Generally, neobanks operate on an exceptionally low margin as they tend to offer competitive low-cost pricing, higher deposit rates, and incentives to increase their customer base. With no revenue-generating products such as credit cards and loans, neobanks fail to make a profitable and sustainable enterprise. Having no solid revenue model is one of the biggest downsides of a neobank business.Building trust with the customers of the legacy bank is another key challenge for neobanks. The customers feel traditional banks are safe and reliable compared to the new-age banking technology. Although neobanks put forth quick, accessible, and round-the-clock services, a significant share of customers uses neobanks as their secondary account.Aside from the above, lack of standard regulatory framework, superlative customer expectations, and cost involved in the technology and development are some of the challenges that neobanks face.<h2 class="heading-node" id="2ba2" style="text-align: justify">Quest for profitable and sustainable neobanking - The “why” and “what”</h2>Devang believes the quest for a profitable and sustainable neobank starts with two questions:<ol class="list-node" id="gbcty8qf5"><li>Why do you want to create a neobank?</li><li>What do you want the neobank to be known for?</li></ol>Today’s consumers are presented with a gamut of financial services to choose from. Potential customers are keen to know what problems you are solving for them. A compelling vision for your neobank will make the right customers see how your “why” aligns with their pain points, goals, and objectives. “What” your neobank is will help you tap into the right customer segment to fulfill your purpose.For example, assume you are packing your bags and moving to another continent for a successful educational or career experience. It is one thing to assimilate the new environment but being tugged into a totally unfamiliar ecosystem for essential services and financial assistance like banking or debit card usage can knock you sideways.Imagine, you receive a sim card, a bank account, a checkbook, a debit card, and perhaps even insurance as your onboarding kit. Wouldn’t that be the ultimate welcome kit?That’s exactly how Devang envisages a neobank that caters to students, blue-collar job holders, and working professionals. Drawn from his experience as an expatriate, he aspires to build a neobank that offers quick and seamless financial services to immigrants arriving in a new country.Understanding your “why” and “what” will form the fundamental principle of your neobank’s vision. Once you have a clear conception of your vision, you must support it with comprehensive planning based on:<ul class="list-node" id="fmgvwr81y"><li>A defined target customer segment</li><li>Regulatory compliance in the respective market</li><li>Data protection/localization</li><li>Application with customer-friendly UI/UX</li></ul>Devang highlights that beta testing is paramount and the key to boosting the performance of a neobank application. Unfortunately, most players fail to include beta testing in their development life cycle in a rush to go to the market soon.Though neobanking is the perfect example of how convenient banking can be for users, it is still in its nascent stage. Whether you are an incumbent or a new player, agility and responsiveness to market trends are critical to surviving in an increasingly crowded digital financial services ecosystem. Therefore, it’s extremely imperative to understand, analyze, and constantly refine your vision to carve out your place in the market. The key is to remember what you want to achieve and why.Check out our blog on&nbsp;<a class="link au lg" href="https://m2pfintech.com/blog/7-steps-to-start-a-neo-bank-from-scratch/" rel="noopener">how to start a neobank</a>&nbsp;for step-by-step guidance.Curious to know how you can create a powerful vision and value proposition for your neobank? Write to us at <a class="link au mv" href="mailto:business@m2pfintech.com" target="_blank" rel="noopener ugc nofollow">business@m2pfintech.com</a>.<a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox. Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

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