FINTECH

SKILL OFFERING ID: 2280

An investigation of the benefits of digital Financial Inclusion in

Chennai during 2020 -2021

PROJECT SUBMITTED TO
UNIVERSITY OF MADRAS /
NAN MUDHALVAN
YEAR: 2023
BACHELOR OF COMMERCE (A&F)
VI SEMESTER
GROUP NUMBER: B.Com 06

MEMBERS OF THE GROUP

1. KAVIYA.K: Reg.no: 312018575
2. JANANI.R: Reg.no :312018573
3. KEERTHANA.N.M : Reg.no:312018577
4. HEMAVATHY.R: Reg.no:
5. KAVIYA.P: Reg.no:312018576

GUIDED BY:

Dr.V.Nagarathinam M.Com.,M.Phil.,Ph.D
SPOC NAME:

DR .P.PARIMALA M.SC.,M.Phil.,Ph.D
AN INVESTIGATION OF THE BENEFITS OF DIGITAL FINANCAIL
INCLUSION IN CHENNAI DURING 2020-2021

FINTECH INTRODUCTION
 Financial technology (better known as fintech) is used to describe new
technology that seeks to improve and automate the delivery and use of
financial services.
 At its core, fintech is utilized to help companies, business owners, and
consumers better manage their financial operations, processes, and
lives.
 It is composed of specialized software and algorithms that are used on
computers and smartphones. Fintech, the word, is a shortened
combination of “financial technology.”
 When fintech emerged in the 21st century, the term was initially
applied to the technology employed at the backend systems of
established financial institutions, such as banks.
 From 2018 or so to 2022, there was a shift to consumer-oriented
services.
 Fintech now includes different sectors and industries such as education,
retail banking, fundraising and nonprofit, and investment
management,etc….

INTRODUCTION
digital technology has accelerated the pace of financial inclusion through the
introduction of innovative business models and the progressive digitization of financial
systems. In a rapidly digitizing country like India, it is evident that Digital Financial Services
(DFS) hold the promise of bringing financial inclusion to the last-mile and reaching the most
vulnerable, marginalized, and remote populations of the country. However, several
challenges need to be overcome to ensure that these efforts reach the marginalized, and
prevent further exclusion.
India’s overall rate of adoption of digital tools is the second fastest in the world (trailing
behind Indonesia) and, in absolute terms, the number of digital users in India is second only
to China . Data from the Telecom Regulatory Authority of India (TRAI) shows that there are
726 million digital users as of September 2020, which is an impressive 278% growth from
September 2016. The increase is driven by mobile internet users, who account for more than
95% of total internet users. Yet, in a country of over 1.3 billion people, these numbers
account for little more than 50% of the population, which suggests that there is significant
untapped potential for further digitization and with the right interventions, the number of
“newly digital” users is likely to increase in the coming years.

Objectives

• To study the benefits of fintech for bank lending

• To understand the association between the demographic variables and the behavioral
variables

• relating to the positive impact of fintech

• To identify the problems usually, banks face with the use of fintech for
loan disbursement.

SCOPE

the Indian Banking sector has witnessed the scaling of Fintech to new heights with varied
banking products and services assisted with technology. One among them being the digital
payments and lending. Chennai is also catching the pace to the role of fin tech in banks
services by including to the list of fin tech hubs of Delhi, Mumbai and Bangalore, the tech
city of India, Chennai was seen quite successful with start- ups like Flexiloans.com, Bank
Bazaar, Credit mantra, Kaleidofin, FundsIndia. However, the banks are looking at Digital
Fintech services as a strategic tool to bring financial inclusion and for this bank need to be
strong enough to overcome the challenges. limitations in credit, smart automation, financial
planning, cybercrime, crossing digital divide etc. Customers need to be made aware of the
benefits like transparency, payment methods which are easy to use , most importantly being
the smooth banks quick and faster lending.

NEEDS

 Digital platforms enable clients to send and receive payments and as

well as store information electronically through the digital transfers
device that transmit and link to a bank or non-bank authorized to save
electronic value.
 Customers can utilize mobile banking services that transfer
information to a digital device like a point-of-sale terminal.
 Through retail mediators who have a digital connected device to
transfer the information, customers can change cash into electronic
storage value ("cash-in") and subsequently change stored value in
return into cash ("cash-out")
RESEARCH AND METHODOLOGY

Banks have started to invest their own capital in FinTech start-ups thereby
creating in house venture capital. But this has given banks a challenge to tackle the traditional
structures and legacy systems, which is quite expensive to develop and maintain as it requires
technology and specialists to operate the new system. Technology has always been an enabler
for banks to bring in innovative products, but this has been slow due to the complexity of
business and strict regulatory and compliance environment Banks need to have good
management of the cyber security regulations and management of data. Employee's feel
cyber security is the major problem for the use of fin tech in lending . As per the factor
loading, employees perceive use of big data and integration and the use of artificial
intelligence to be an issue. Security issues and data privacy, block chain
integration ,emergence of new risk like strategic risk, compliance risk. operational risk, cyber
risk along with the digital divide between the traditional methods and customers has: aroused
doubts on the reliability of the new system. New methods have made the regulations quite
stringent and strict. Banks find it difficult to comply with the government regulations for all
their loan disbursements. Technology is not new to customers now and they find lack of
mobile and technological expertise not to be causing much harm to the employees. Shift in
consumer expectations and the focus on technology has given new lead to the fintech
companies: They have spread the gains of economic growth to other sectors by offering
unique financial products. Open Banking challenges have made the banks to ascertain and
implement suitable strategies to work towards creating an open collaborative platform, which
should enable intermediaries so access data securely and develop intuitive applications for
employees but this is a challenge for the fintech. Majority of the employees find the banking
sector to be disrupted by fintech and the new methods of banking is seen as one which
provides targeted solutions with better quality, price and variety to consumers The threats
posed by fintech usually includes the market share, margins information security and higher
rates. Many employees find the fintech as method to reach the rural and unbanked customers
with the help of digitalisation.But the employees feel customers find the access to these
products quite challenging due to the inadequacies in their resources. Proper content
development would enable employers to understand and use the methods of fintech to the
fullest extend . Employees find lack of resources and opportunities to make the application of
the system. Employees also stated that the customers are given limited payment options and
the fintech which is usually start up have only one product or service, so they find it difficult
to balance with the competitors in the market . Fintech should join with banks to grow and
this could be quite challenging . They need to have good visibility and awareness among the
users Employees fear the inadequacies in fintech like IT Security, regulations and differences
in management and culture could cause an hindrance to the visibility of the tin tech
operational process and create doubts in the minds of the user. and shiny products while
upgrading but they need to understand the demands of the customers which is usually decided
by their experience in the financial services marke . Digital technologies have given vast data
about customers and many keep the customer, in dark as to the real usage of these data. It's
quite normal for them to keep these data for use someday and mostly they are warned to have
control over sharing. Customers however, shy away from certain functions of banks for the
fear of sharing important data which may intrude into their privacy and financial standing.
Understanding customer needs and offering excellent service makes sure that customers are
loyal and have trust in the fintech usage. Most of the employees feel the new system restricts
the bonding between the customers and in tech and this in turn reduces the trust on the
services Fin tech has also seen the change in consumer expectations with the application of
technology in every aspect of financial transaction. Very few employees feel that they
encounter an inconvenienced customer. They suggest that if they are handled correctly they
could be absolutely delighted.Eancis Method Principal Asis Factoring Rotation Method
Varimax with Kaiser NormalisationFin tech has been able to resolve the issues of talent
acquisition with its ability to tap not only the employees of the fin tech, but also going in for
outsourcing as we are globally connected. But this has made the retention of employees quite
difficult and the cost of providing training shows an upsurge. Employes are also witnessing
the big culture change in terms of looking at investors requirements on a global perspective.
build teams which collaborate to work in different areas of business.Team leaders will have
to search for solutions to customer's problems in line with business strategy Employees need
to be more flexible, adaptable to the changes taking place in the financial sector both
technically and financially. They have to overcome the resistance to change by being more
forward looking to the use of technology for their day to day operation. High skilled
employees with better emotional quotient are likely to do bener than employees with only
technical skills. Employees will have to be trained to take up collaboration with the team,
have a strong relationship to share views, informations, and ideas and to perform better. The
tactics to manage conflict can also help in making the employees strong to accept changes.

TYPES
 online banking, online payment and transfer services.
 peer-to-peer lending.
 personal investment advice and services.

DATA COLLECTION TOOLS

Access to real-time information.

 Better decision-making.

 Freedom.

 Ease and efficiency.

 Flexibility.

 Transparency of information.

 Integration of financial management into other business

operations.

ANALYSIS & DISCUSSIONS

I Impact of demographic variables on the various challenges of fin tech.

In order to test whether there is any significant difference between the male and female
employees towards the various challenges of fintech.. students t test was performed on the
four factors identified, employees response towards digitalisation and technology adoption,
external concerns relating to fintech, problems associated with the employees and problems
associated with the customer.
HO: There is no association between demographic variables and the positive impact of
fintech in lending

CONCLUSION
The entry of fin tech has paved the way for building a strong banking system with a good
indication for financial inclusion. However the other side of the fin tech explains the
predicament faced by the system. The first round of fin tech revolution was spear headed by
the various financial institutions but the second generation of fin tech has to be implemented
with a slight hesitation on the part of the authorities. Whatever radical measures are
introduced it may not yield the desired results, unless the management of these start-ups are
strengthened and the procedures are tightly plugged off. The implementation of fin tech has
given various benefits like use of artificial intelligence, chat bots, faster service, user of block
chain etc. In spite of these benefits from fintech, start-ups are encountering various hurdles
like resistance form the employees and customers, lack of training, limited infrastructure,
capital, increased customer expectations, cyber security followed by global competition, poor
maintenance, inadequate control etc. These problems have created boulenecks in the proper
implementation and benefits have not been enjoyed to the full extent. Fintech start-up need to
become conscious that they are entering a challenging environment and will have to redefine
their position with the Banking sector. Forward planning, continuous research and leveraging
consumer data while making financial products and services can be vital to establish a strong
market with Finte1.

COURSE NAME : BUSINESS ANALYTICS AND FINTECH

SKILL OFFERING ID:

PROJECT TITLE : AN INVESTIGATION OF THE BENEFITS OF DIGITAL

FINANCAIL INCLUSION IN CHENNAI DURING 2020-2021

PROJECT SUBMITTED TO: Dr.V. Nagarathinam M.Com., M.Phil.,Ph.D

YEAR:2023
DEPARTMENT: B.COM (ACCOUNTING & FINANCE)

SEMESTER: VI

GROUP NUMBERS: 5

MEMBERS OF THE GROUP:

KAVIYA.K
JANANI.R
KEERTHANA.N.M
HEMAVATHY.R
KAVIYA.P

GUIDED BY: Dr.V. Nagarathinam M.Com.,M.Phil.,Ph.D

SPOC NAME: DR.P. PARIMALA M.SC., M.Phil., Ph.D.

AN INVESTIGATION OF THE BENEFITS OF DIGITAL FINANCAIL

INCLUSION IN CHENNAI DURING 2020-2021

FINTECH INTRODUCTION
" Financial technology (better known as fintech) is used to describe modern technology
that seeks to improve and automate the delivery and use of financial services.
" At its core, fintech is utilized to help companies, business owners, and consumers
better manage their financial operations, processes, and lives.
" It is composed of specialized software and algorithms that are used on computers and
smartphones. Fintech, the word, is a shortened combination of "financial technology."
" When fintech emerged in the 21st century, the term was initially applied to the
technology employed at the backend systems of established financial institutions, such as
banks.
" From 2018 or so to 2022, there was a shift to consumer-oriented services.
" Fintech now includes different sectors and industries such as education, retail
banking, fundraising and non-profit, and investment management, etc….

INTRODUCTION
digital technology has accelerated the pace of financial inclusion through the
introduction of innovative business models and the progressive digitization of financial
systems. In a rapidly digitizing country like India, it is evident that Digital Financial Services
(DFS) hold the promise of bringing financial inclusion to the last-mile and reaching the most
vulnerable, marginalized, and remote populations of the country. However, several
challenges need to be overcome to ensure that these efforts reach the marginalized and
prevent further exclusion.
India's overall rate of adoption of digital tools is the second fastest in the world (trailing
behind Indonesia) and, in absolute terms, the number of digital users in India is second only
to China. Data from the Telecom Regulatory Authority of India (TRAI) shows that there are
726 million digital users as of September 2020, which is an impressive 278% growth from
September 2016. The increase is driven by mobile internet users, who account for more than
95% of total internet users. Yet, in a country of over 1.3 billion people, these numbers
account for little more than 50% of the population, which suggests that there is significant
untapped potential for further digitization and with the right interventions, the number of
"newly digital" users is likely to increase in the coming years.

Objectives
o Study the benefits of fintech for bank lending
o Understand the association between the demographic variables and the behavioural
variables
o relating to the positive impact of fintech
o Identify the problems usually, banks face with the use of fintech for loan
disbursement.

SCOPE

the Indian Banking sector has witnessed the scaling of Fintech to new heights with varied
banking products and services assisted with technology. One among them being the digital
payments and lending. Chennai is also catching the pace to the role of fin tech in banks
services by including to the list of fin tech hubs of Delhi, Mumbai and Bangalore, the tech
city of India, Chennai was seen quite successful with start- ups like Flexiloans.com, Bank
Bazaar, Credit mantra, Kallidin, Funds India. However, the banks are looking at Digital
Fintech services as a strategic tool to bring financial inclusion and for this bank need to be
strong enough to overcome the challenges. limitations in credit, smart automation, financial
planning, cybercrime, crossing digital divide etc. Customers need to be made aware of the
benefits like transparency, payment methods which are easy to use, most importantly being
the smooth banks quick and faster lending.

NEEDS

" Digital platforms enable clients to send and receive payments and as well as store
information electronically through the digital transfers device that transmit and link to a bank
or non-bank authorized to save electronic value.
" Customers can utilize mobile banking services that transfer information to a digital
device like a point-of-sale terminal.
" Through retail mediators who have a digital connected device to transfer the
information, customers can change cash into electronic storage value ("cash-in") and
subsequently change stored value in return into cash ("cash-out")

RESEARCH AND METHODOLOGY

Banks have started to invest their own capital in FinTech start-ups thereby creating in
house venture capital. But this has given banks a challenge to tackle the traditional structures
and legacy systems, which is quite expensive to develop and maintain as it requires
technology and specialists to operate the new system. Technology has always been an enabler
for banks to bring in innovative products, but this has been slow due to the complexity of
business and strict regulatory and compliance environment Banks need to have good
management of the cyber security regulations and management of data. Employee's feel
cyber security is the major problem for the use of fin tech in lending. As per the factor
loading, employees perceive use of big data and integration and the use of artificial
intelligence to be an issue. Security issues and data privacy, block chain integration,
emergence of new risk like strategic risk, compliance risk. operational risk, cyber risk along
with the digital divide between the traditional methods and customers has aroused doubts on
the reliability of the new system. New methods have made the regulations quite stringent and
strict. Banks find it difficult to comply with the government regulations for all their loan
disbursements. Technology is not new to customers now and they find lack of mobile and
technological expertise not to be causing much harm to the employees. Shift in consumer
expectations and the focus on technology has given new lead to the fintech companies: They
have spread the gains of economic growth to other sectors by offering unique financial
products. Open Banking challenges have made the banks to ascertain and implement suitable
strategies to work towards creating an open collaborative platform, which should enable
intermediaries so access data securely and develop intuitive applications for employees, but
this is a challenge for the fintech. Majority of the employees find the banking sector to be
disrupted by fintech and the new method of banking is seen as one which provides targeted
solutions with better quality, price and variety to consumers The threats posed by fintech
usually includes the market share, margins information security and higher rates. Many
employees find the fintech as method to reach the rural and unbanked customers with the
help of digitalisation. But the employees feel customers find the access to these products
quite challenging due to the inadequacies in their resources. Proper content development
would enable employers to understand and use the methods of fintech to the fullest extent.
Employees find lack of resources and opportunities to make the application of the system.
Employees also stated that the customers are given limited payment options and the fintech
which is usually start up have only one product or service, so they find it difficult to balance
with the competitors in the market. Fintech should join with banks to grow, and this could be
quite challenging. They need to have good visibility and awareness among the users
Employees fear the inadequacies in fintech like IT Security, regulations and differences in
management and culture could cause a hindrance to the visibility of the tin tech operational
process and create doubts in the minds of the user. and shiny products while upgrading but
they need to understand the demands of the customers which is usually decided by their
experience in the financial services market. Digital technologies have given vast data about
customers, and many keep the customer, in dark as to the real usage of these data. It's quite
normal for them to keep these data for use someday and mostly they are warned to have
control over sharing. Customers however, shy away from certain functions of banks for the
fear of sharing important data which may intrude into their privacy and financial standing.
Understanding customer needs and offering excellent service makes sure that customers are
loyal and have trust in the fintech usage. Most of the employees feel the new system restricts
the bonding between the customers and in tech and this in turn reduces the trust on the
services Fin tech has also seen the change in consumer expectations with the application of
technology in every aspect of financial transaction. Very few employees feel that they
encounter an inconvenienced customer. They suggest that if they are handled correctly, they
could be absolutely delighted. Francis Method Principal Asis Factoring Rotation Method
Varimax with Kaiser Normalisation Fin tech has been able to resolve the issues of talent
acquisition with its ability to tap not only the employees of the fin tech, but also going in for
outsourcing as we are globally connected. But this has made the retention of employees quite
difficult and the cost of providing training shows an upsurge. Employees are also witnessing
the big culture change in terms of looking at investor's requirements on a global perspective.
build teams which collaborate to work in different areas of business. Team leaders will have
to search for solutions to customer's problems in line with business strategy Employees need
to be more flexible, adaptable to the changes taking place in the financial sector both
technically and financially. They have to overcome the resistance to change by being more
forward looking to the use of technology for their day-to-day operation. High skilled
employees with better emotional quotient are likely to do banner than employees with only
technical skills. Employees will have to be trained to take up collaboration with the team,
have a strong relationship to share views, information's, and ideas and to perform better. The
tactics to manage conflict can also help in making the employees strong to accept changes.
TYPES
" online banking, online payment and transfer services.
" peer-to-peer lending.
" personal investment advice and services.
DATA COLLECTION TOOLS
Access to real-time information.
" Better decision-making.
" Freedom.
" Ease and efficiency.
" Flexibility.
" Transparency of information.
" Integration of economic management into other business operations.
ANALYSIS & DISCUSSIONS
I Impact of demographic variables on the various challenges of fin tech. To test whether there
is any significant difference between the male and female employees towards the various
challenges of fintech. students t test was performed on the four factors identified, employee's
response towards digitalisation and technology adoption, external concerns relating to
fintech, problems associated with the employees and problems associated with the customer.
HO: There is no association between demographic variables and the positive impact of
fintech in lending

CONCLUSION
The entry of fin tech has paved the way for building a strong banking system with a good
indication for financial inclusion. However, the other side of the fin tech explains the
predicament faced by the system. The first round of fin tech revolution was spear headed by
the various financial institutions, but the second generation of fin tech must be implemented
with a slight hesitation on the part of the authorities. Whatever radical measures are
introduced it may not yield the desired results, unless the management of these start-ups are
strengthened, and the procedures are tightly plugged off. The implementation of fin tech has
given various benefits like use of artificial intelligence, chat bots, faster service, user of block
chain etc. Despite these benefits from fintech, start-ups are encountering various hurdles like
resistance form the employees and customers, lack of training, limited infrastructure, capital,
increased customer expectations, cyber security followed by global competition, poor
maintenance, inadequate control etc. These problems have created boule necks in the proper
implementation and benefits have not been enjoyed to the full extent. Fintech start-ups need
to become conscious that they are entering a challenging environment and will have to
redefine their position with the Banking sector. Forward planning, continuous research and
leveraging consumer data while making financial products and services can be vital to
establish a strong market with Fintech.
Reference: -
1. Nanda, Kajol; Kaur, Mandeep (2016). "Financial Inclusion and Human Development:
A cross-country Evidence". Management and Labour Studies. 41 (2): 127-153.
doi:10.1177/0258042X16658734. S2CID 158002205.
2. ^ Jump up to: a b World Bank (2013-11-07). Global Financial Development Report
2014: Financial Inclusion. The World Bank. doi:10.1596/978-0-8213-9985-9.
hdl:10986/16238. ISBN 978-0-8213-9985-9.
3. ^ Shankar, Savita (2013). "Financial Inclusion in India: Do Microfinance Institutions
Address Access Barriers?" (PDF). ACRN Journal of Entrepreneurship Perspectives. 2: 60-74.
4. ^ Ranjana, K.S.; Bapat, Varadraj (January 2015). "Deepening Financial Inclusion
Beyond Account Opening: Road Ahead for Banks". Business Perspectives and Research. 3
(1): 52-65. doi:10.1177/2278533714551864. ISSN 2278-5337. S2CID 168066239.
5. ^ Dixit, R., Ghosh, M. (2013). Financial Inclusion for Inclusive Growth of India - A
Study of Indian States. International Journal of Business Management and Research. 3, 147-
156.
6. ^ "Overview". World Bank. Retrieved 2020-04-22.
7. ^ Shankar, Savita (2013). "Financial Inclusion in India: Do Microfinance Institutions
Address Access Barriers?" (PDF). ACRN Journal of Entrepreneurship Perspectives. 2: 60-74.
8. ^ Arp, Fridtjof (12 January 2018). "The 34-billion-dollar question: Is microfinance the
answer to poverty?". Global Agenda. World Economic Forum.