Primarily fuelled by the pandemic, the financial sector has seen some big changes 2020 onwards. There has been a significant acceleration in digital banking and fintech (financial technology) and they are growing in leaps and bounds. In an interview to CNBC-TV18, Gautam Chhugani, director-Indian financials & fintech at Bernstein, and Ritesh Banglani, partner of Stellaris Venture Partners, spoke at length about whether fintech is a competition for the banks or will they collaborate with them or a bit of both.

Chhugani said, “The picture is a bit mixed; fintech is also distributing products, so there is a partnership, which is happening between banks and fintech.”

“Fintechs are also focusing on customer segments that are unserved and underserved by the banks and at the same time, fintech and banks are also getting into distribution partnerships, the way it’s seen with Google Pay. However, at the same time some fintech products are directly competing with the bank products, for example, a product called ‘buy now pay later’ competes directly with credit cards,” he said.

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Meanwhile, Banglani said that technology makes lending business more efficient. “We will increasingly see, over the next few years, fintech companies trying to become banks. BharatPe has got approval to buy an existing bank, Paytm has a payment bank licence. Therefore, if I fast forward to the next few years, we will see more fintech trying to become banks,” he said.

Also Read: How banks and fintechs have become deep collaborators?

For the entire discussion, watch the video

(Edited by : Bivekananda Biswas)

First Published:Aug 30, 2021 3:56 PM IST