Fintech

How can SaaS Benefit the Fintech Industry?

The SaaS market of India is expected to generate a revenue of US$ 100 billion in sales as per the Chiratae-Zinnov India SaaS report for 2022, titled “India SaaS – Punching through the Global Pecking Order By 2026. It is on track to overtake China as the world’s second-largest SaaS nation in the next few years as stated in the report.

The statistical data is a clear example of the growth of this concept in India, which can also contribute towards the development of the Fintech Industry. The article discusses how SaaS can benefit the Fintech Industry by providing a better understanding of the same.

What does SaaS Mean? 

(SaaS) or Software as a service refers to a cloud-based software delivery model wherein the cloud provider enables the development and maintenance of cloud application software, along with providing automatic software updates and making software available to the customers via the internet on a pay-as-you-go basis. The management of all the hardware and traditional software, including middleware, application software, and security, is done by the public cloud provider thereby leading to lower costs, deployment, scaling and upgrading business solutions more quickly than maintaining on-premises systems and software for the SaaS customers dramatically along with; predicting the total cost of ownership with greater accuracy.

What Are The Different Types Of SaaS? 

The different types of SaaS are discussed below. 

Vertical SaaS 

This is an industry-specific Saas. Simply put, it is a type of software that is built as per the requirements and goals of a specific industry. This is the most suited type of SaaS for the fintech industry.

Horizontal SaaS

This type of solution can be beneficial for all types of business industries as it aims at solving the common problems existing in the wide market, which can include applications for accounting, advertising campaigns, and customer relationship management, among others.

Batch SaaS

The solution is strictly created for business processes depending upon the nature of the business, such as supply chain management or helpdesk automation or any other relevant business process.

Hybrid SaaS

Such applications combine SaaS solutions with an on-premise software application to provide the benefits of the software with enhanced security and user control. The functional aspect of the software is presented through the cloud hosted by the software provider. Here the user logs into the application from a web browser and accesses a cloud-hosted environment, including the user interface, functionality, and mechanism that moves files. The users’ data, however, is stored in whatever environment they choose until it is encrypted and transferred over the Internet.

How can SaaS benefit the Fintech Industry? 

Saas can benefit the fintech industry in the following ways.

Promote Cost Savings

It benefit financial companies by saving their infrastructural costs through saving the investments required to be made in respect of on-premise hardware and software. Along with this, it also helps the Fintechs to commence their operations without making huge investments and reduce the licensing burden associated with the same.

Eliminates the Need for Internal Team Administration

The management of the SaaS platforms is done by the service providers that take of the technical aspects such as software updates and security patches along with other aspects enabling the start-ups to focus on the more important operation of the business. Further, it is the responsibility of the software provider to ensure that the software is running smoothly. Fintechs can also coordinate with the customer support team of the software provider to get help with any technical issues.

Value-Added Services Are Easily Available.

SaaS platforms provides numerous value-added services, such as issue and acquisition of integrations, fraud prevention, customer management, and analytics tools that can help fintech start-ups improve their operations. These services help fintech startups to get an edge over their competitors.

Agility to Support Volatile Business Cycles

The Fintech Industry is subject to volatile business cycles because of the factors like economic recession, interest rate changes, etc. SaaS platforms help fintech startups to be agile and quickly respond to changing market conditions. The scalability offered by the software allows the expansion of the customer base of the fintech quickly and efficiently.

High and Automated Security Controls

The SaaS platform service providers heavily invest in the security of their systems. Along with having a team of security experts to constantly monitor the platform for any vulnerability. The service providers also have automated security controls that help quickly identify and fix any security issues.

Reducing the Time to Market

Time to market is an important factor for any business, and it is especially critical for fintech startups. As the markets are highly competitive in nature, the startups need to be quick to respond to the changing market conditions, which the SaaS platforms can facilitate as they can help fintech startups in reducing the time to market as and quickly get started with their operations without worrying about the procurement, installation, and maintenance of software.

Easy Regulation Compliance

The Fintech Industry is highly regulated, therefore fintech startups need to comply with a wide range of regulations. SaaS platforms enable fintech startups to easy compliance with the regulations as the service providers ensure that the necessary compliance requirements are met by making sure that the data of the customers are stored securely, along with providing regular updates about any changes in the regulatory landscape.

Conclusion

SaaS-based fintech^[1] solutions are not only helping startups to quickly scale up their operations but also enabling established financial institutions to keep pace with the ever-changing customer expectations. They can now rapidly develop and deploy new digital products and services without investing in technology infrastructure.

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