Banks Risk Losing Opportunities Without Fintech Partnerships, Warns Axis Bank MD
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Banks Need To Work With Fintechs: Axis Bank MD
His comments came on the same day as PM Modi lauded the fintech ecosystem, saying UPI is a great example of India's fintech success Axis Bank managing director (MD) and CEO Amitabh Chaudhry on Friday (August 30) said that banks will lose out on opportunities if they do not work with fintech startups. "They (fintech platforms) are coming up with technologies, products, services, adjacencies, which can make your ecosystem, your interactions with the customer that much more fruitful, powerful. And, it will be a loss on (for) us if we are not working with them... In many cases, we realised that we don't have enough resources and time to do it, so fintechs are helping us get there," Chaudhry said. He made the comments during a chat with National Payments Corporation of India (NPCI) chief operating officer (COO) Praveena Rai at the Global Fintech Festival 2024 in Mumbai. Chaudhry also said that the collaboration between banks and fintech startups in a "compliant fashion" would benefit both the parties significantly. "Fintechs make your ecosystem powerful. Both sides can benefit. We banks do not have enough resources and we welcome fintechs with open arms," added Chaudhry. Commenting about the bank's pilots with emerging technology, he said that Axis Bank is currently running "about 15 experiments" with artificial intelligence (AI) and machine learning to personalise its user app. "We would like the customer to be seen as the only customer the bank is serving and every customer to have a personalised experience with the bank. Every customer should have a unique page that opens up on the mobile app where he gets all the features. To get to that vision, we are running about 15 experiments on AI and ML," Chaudhry added. His comments came on the final day of the GFF 2024, which saw tech giant Google announcing multiple new features, including UPI Circle, eRupi and Clickpay QR scan for bill payments, among others. Meanwhile, Prime Minister Narendra Modi, while addressing the event, lauded the fintech ecosystem saying that Unified Payments Interface (UPI) is a great example of India's fintech success. PM Modi also said that the central government is working on advanced technologies and regulatory frameworks to strengthen financial markets. The PM said that the homegrown fintech ecosystem will enhance the ease of living of the entire world, and added that India's best is yet to come.
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Banks risk losing out by not partnering with fintechs: Axis Bank CEO
Meanwhile, he highlighted that as customers transact more digitally, the banks' operating costs will come down. He also added that the rising incidence of frauds has made people "worried" about undertaking banking transactions. Chaudhry also said very soon the bank will offer a service on its mobile app where customers of other banks will be able to undertake transactions rather than just being able to view the account details as is offered today. He also said that the bank is running a total of 15 pilots on artificial intelligence and machine learning at present, and one of the areas will be in Human Resources, where technology will help the bank go through resumes to make hiring easier.
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Axis Bank's Managing Director emphasizes the importance of collaboration between traditional banks and fintech companies to stay competitive in the evolving financial landscape.
Banks Face Potential Setbacks Without Fintech Collaboration
In a rapidly evolving financial landscape, traditional banks risk falling behind if they fail to embrace partnerships with fintech companies, according to Amitabh Chaudhry, Managing Director and CEO of Axis Bank. Speaking at the Global Fintech Fest 2023 in Mumbai, Chaudhry emphasized the critical need for banks to adapt and collaborate in order to remain competitive
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.The Imperative of Bank-Fintech Partnerships
Chaudhry highlighted that banks which choose not to work with fintechs will inevitably lose out on significant opportunities. He stressed that such collaborations are essential for banks to enhance their technological capabilities and meet evolving customer expectations. The Axis Bank chief's comments underscore the growing importance of fintech in shaping the future of banking services
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.Axis Bank's Proactive Approach
Leading by example, Axis Bank has been actively engaging with the fintech ecosystem. Chaudhry revealed that the bank has partnerships with approximately 130 fintech companies across various domains. These collaborations span areas such as lending, payments, and wealth management, demonstrating Axis Bank's commitment to leveraging fintech innovations
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.The Changing Landscape of Financial Services
The banking industry is witnessing a significant shift, with fintech companies introducing innovative solutions that challenge traditional banking models. Chaudhry noted that while some view fintechs as competitors, Axis Bank sees them as potential partners. This perspective allows the bank to tap into the agility and technological prowess of fintechs while maintaining its established customer base and regulatory compliance
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Regulatory Environment and Innovation
Chaudhry also touched upon the regulatory aspect of bank-fintech partnerships. He praised the Reserve Bank of India (RBI) for creating a conducive environment for innovation in the financial sector. The regulatory sandbox approach adopted by the RBI allows for controlled testing of new financial products and services, fostering innovation while maintaining financial stability
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.Future Outlook for Bank-Fintech Collaborations
As the financial services industry continues to evolve, the symbiotic relationship between banks and fintechs is expected to deepen. Banks bring to the table their vast customer base, regulatory compliance expertise, and financial resources, while fintechs offer technological innovation, agility, and fresh perspectives on customer experience. This collaboration has the potential to reshape the banking landscape, offering customers more sophisticated, efficient, and personalized financial services
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