IANS | 22 Oct, 2023
In an interview, Rayan
Malhotra, Serial Entrepreneur & Influencer and founder & CEO of
NeoFinity, said thayt FinTech is notorious for its sudden regulations and the
best way to be on the right side is to be abreast of the latest trends and
Excerpts of the interview…
1. Can you shed some
light on your background and journey that led you to start your FinTech
I had a very varied journey, where I was initially a writer,
then became a YouTuber. Then that YouTube channel scaled to about a million
followers, giving me the status of a tech influencer. However, I did not want
to continue in that domain and wanted to build something of my own. When I
first started my corporate career, Steve Jobs was a big source of inspiration
for me. Hence, I started helping a lot of startups. I worked across product,
tech, and marketing roles, getting the required acumen to build my own startup
one day. I had quite a few certifications in FinTech, as I had a lot of
interest in that field. I also had patented technology, which led to the
creation of my company, Kashware. That is how I came into the FinTech domain.
2. How does your solution
adapt itself from existing offerings in the market of fintech?
Currently, I am the founder and CEO of NeoFinity. It is a
next-gen FinTech payments company and is part of the illustrious Neo Group. We
have been developing products that, in terms of the current payments industry,
are both revolutionary and evolutionary. We have launched an exclusive line of
wearables, wherein you will be able to pay using accessories like your phones,
your wristwatches, and so on, without carrying your payment card. Plus, we are
coming up with some banking solutions wherein we will be able to give you up to
9% interest on a savings-like bank account and up to 6-7% interest on a
current-like bank account. The idea is to keep adding such new verticals to our
portfolio and ultimately emerge as a one-stop shop for all your payment FinTech
3. Can you discuss
the strategies you put into practice to ensure your FinTech solution remains
compliant with evolving regulations?
FinTech is notorious for its sudden regulations. The best
way to be on the right side is to be abreast of the latest trends and
regulations. Follow the regulatory authority’s official website. A strategy I
personally use is talking to people. Talk to people and other founders in your
domain. Take part in think tanks and be a part of certain groups where the
relevant information is circulated. Once you have that information, knowledge,
and understanding, you can use it to your advantage to stay on the right side
of changing regulations.
4. How has the
FinTech industry transformed over the past few years? And what trends do you
The FinTech sector has undergone significant change in
recent years. The first is UPI, which I think is actually hastening the demise
of cards, especially debit cards. I believe that the scan-and-pay feature has
fixed payments and transformed them forever. Another trend I have noticed is
that people are now willing to pay for convenience; previously, it was
considered to be the least expensive option. However, you now see a lot of
innovative and experimental FinTech apps, which are setting the pace. This
trend, I believe, will continue. Finally, considering that India is a
developing economy, the middle class is growing. As a result, you can see that
India is a credit-hungry country, with an increase in credit cards, loans, and
BNPL (Buy Now, Pay Later) products. And it is still only the tip of the
iceberg. I anticipate that credit will increase in the future, giving lend-tech
and credit companies a lot of room to grow.
5. What challenges and opportunities do
decentralised payment systems like blockchain and cryptocurrencies drive
towards the financial industry?
I believe that there are opportunities in the fact that no
specific entity will be solely accountable for the transactions. In theory, it
all looks good. Obviously, it will aid in cross-border transactions and always
bring about a great deal of transparency in transactions, as all transactions
will be trackable. There are also a lot of difficulties out there, in my
opinion. The biggest one is that you are basically trying to change an entire
system and trying to remove key players who have been in the business for 50 to
100 years. Also, there is a reason it has been a centralised system as of now.
Naturally, there will be some resistance once you attempt to change that. The
other issue is that the decentralized payment system, as we are seeing, can be
used for a lot of illicit and illegal activities if there is no kind of
regulation over it. So those are the two challenges. One relates to structure,
while the other to scope.
6. How do you see the
role of digital currencies (CBDCs) influencing traditional monetary systems and
Boosting Innovation: CBDCs will encourage fintech companies
to come up with new financial products and services. They provide a secure
digital platform for startups and established fintechs to build upon.
Easing Cross-Border Transactions: CBDCs will make international
payments much easier and cheaper. This is especially good news for businesses
involved in global trade.
Including Everyone: CBDCs can help more people access
digital financial services and have a safe place to keep their money. This can
help those who don't have traditional bank accounts.
Changing Banking: Banks might have to change the way they do
business because more people will use CBDCs for everyday transactions and
In short, CBDCs are a big deal for fintech, making
innovation easier, international transactions smoother, and financial services
accessible to more people.
7. How does machine
learning and AI provide fraud detection and prevention in financial
In the realm of financial technology, AI and machine learning
hold a significant role in revolutionizing fraud detection and prevention in
financial transactions. The real-time detection capabilities they offer are
paramount. These technologies allow us to continuously monitor financial
transactions as they happen, rapidly identifying and flagging suspicious
activities. This immediate response is instrumental in preventing fraudulent
transactions from being completed, minimizing potential financial losses.
Pattern recognition is another vital aspect. Machine learning
algorithms meticulously analyze vast volumes of transaction data, comparing
ongoing transactions to historical data. This enables these algorithms to
identify anomalies or deviations from normal transaction behavior. For
instance, they can swiftly detect if a credit card is being used in a location
far from the cardholder's typical spending areas, triggering an alert.
Customer profiling adds an extra layer of security. AI
systems create individual customer profiles based on their transaction
histories, encompassing metrics such as transaction amounts, frequency, and
locations. When a transaction significantly deviates from a customer's
established profile, it triggers an alert. This feature is particularly
valuable in identifying unauthorized account access or identity theft.
Moreover, predictive models powered by supervised and
unsupervised learning play a pivotal role. Supervised models learn from labeled
data, distinguishing between fraudulent and legitimate transactions to make
predictions. Unsupervised models uncover hidden patterns in the data that were
previously unknown. These models continuously adapt and improve over time,
staying effective in the face of ever-evolving fraud tactics.
The ability to continuously learn and adapt is crucial in combating
financial fraud. AI systems are designed to evolve in real-time, staying in
sync with emerging fraud trends and adapting their algorithms and rules
accordingly. This adaptability is vital in ensuring high accuracy in fraud
detection and prevention.
Lastly, AI and machine learning enhance overall efficiency
in the fraud detection process. By automating the analysis of transaction data,
they reduce the need for manual intervention and review. This not only saves
time but also significantly reduces the number of false positives, ensuring
that legitimate transactions are not mistakenly flagged as fraudulent. Overall,
these technologies bolster the efficiency and effectiveness of the entire fraud
8. What strategies
can fintech companies implement to
bridge the gap between traditional financial services and underserved
Bridging the gap between traditional financial services and
underserved communities is a pivotal challenge for fintech companies. To
succeed in this endeavor, several strategies can be implemented.
Firstly, fintech firms should focus on developing
user-friendly and accessible interfaces. This includes mobile apps and web
platforms designed to accommodate users with limited access to technology and
those who may not be tech-savvy. Simple, intuitive design coupled with
multi-language support can significantly improve inclusivity.
Secondly, partnerships with local organizations and
community leaders can help fintech companies gain trust and a deeper
understanding of the specific needs of underserved communities. Collaborative
efforts to provide financial education and literacy programs can empower
individuals to make informed financial decisions.
Additionally, implementing alternative credit scoring models
is vital. Many underserved communities lack traditional credit histories.
Fintech firms can leverage alternative data sources such as utility payments or
mobile phone usage to assess creditworthiness more accurately.
Furthermore, offering affordable and accessible financial
products like microloans and savings accounts can address the unique financial
challenges faced by underserved communities. Tailored solutions, such as
peer-to-peer lending platforms, can help facilitate access to capital for
entrepreneurs in these communities.
Lastly, regulatory compliance is crucial. Fintech companies
must navigate regulatory hurdles to ensure their services are accessible while
maintaining the required security and transparency.
In conclusion, bridging the gap between traditional
financial services and underserved communities requires a multi-faceted
approach. User-friendly technology, community engagement, alternative credit
scoring, affordable products, and regulatory compliance are all key elements of
a successful strategy in this endeavor.