Axis Bank CEO Warns Banks Will Fall Behind Without Fintech Partnerships; Details Here

Chaudhry elaborated on the concept of banks taking equity stakes in fintech companies, noting that this strategy could lead to a deeper and more impactful collaboration than typical partnerships

Amitabh Chaudhry, Managing Director (MD) and Chief Executive Officer (CEO) of Axis Bank, said on Friday that banks risk falling behind if they fail to collaborate with fintech companies. He highlighted that fintechs offer a wide range of technologies, products, and services that can significantly enhance customer interactions. By leveraging these advancements, banks can improve the overall customer experience and stay competitive in an increasingly digital financial landscape.

“It would be a loss on our side if we were not working with them,” Chaudhry said while speaking at the Global Fintech Fest.

Chaudhry elaborated on the concept of banks taking equity stakes in fintech companies, noting that this strategy could lead to a deeper and more impactful collaboration than typically achieved through standard partnerships. By investing in fintechs, banks can integrate more closely with these innovative firms, fostering a more synergistic relationship beyond traditional business arrangements.

He further noted that banks increasingly aim to present themselves as fintechs to attract and engage with customers who prefer modern, tech-driven banking solutions. However, many banks have recognised that they often lack the necessary resources or time to fully transform their operations to meet these customer expectations on their own. In such cases, fintech companies can play a crucial role in helping banks achieve this transformation more effectively.

Chaudhry also stressed that as customers continue to do more of their transactions digitally, banks' operational costs are likely to decrease. The shift to digital transactions reduces the need for physical branches and associated expenses, thereby lowering overall operating costs for financial institutions.

Additionally, he pointed out that the increase in fraudulent activities has raised consumer concerns regarding the security of their banking transactions. This growing sense of unease has made individuals more cautious about banking activities, highlighting the industry's need for enhanced security measures and trust-building efforts.