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Nobody can compete with banks: Ex-SBI chief Rajnish Kumar


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In the world of finance, giants like banks reign supreme when it comes to gathering money. But where they struggle, nimble fintechs come in, playing a crucial role in deploying those funds effectively. This was the insightful observation of Rajnish Kumar, former SBI Chief and current Mastercard India Chairman, in a recent interview with Business Today TV.

Banks excel at amassing capital, but deployment poses a challenge. They often overlook or struggle to reach underserved segments with high credit needs, leaving a gap the informal sector readily fills. Fintechs, with their digital agility and cost-efficiency, step in to bridge this divide. They deliver financial services and credit access to these neglected populations, promoting financial inclusion and economic growth.

Kumar pointed out the cost advantage fintechs enjoy. They acquire customers at a fraction of the cost compared to traditional institutions, making them highly competitive. Their nimbleness allows them to rapidly adapt to customer needs and tailor solutions accordingly, a space where legacy banks often lag behind.

Despite the rise of fintechs, one aspect remains unchallenged: trust. Banks hold an undeniable edge in terms of customer trust and the ability to garner deposits, a crucial advantage that sets them apart.

This dynamic highlights the complementary nature of banks and fintechs. While banks remain the bedrock of trust and liquidity, fintechs act as bridges, extending financial services to traditionally excluded segments. Their collaboration can create a robust and inclusive financial ecosystem that caters to the diverse needs of the Indian population.

Here’s a summary of the key takeaways:

  • Banks excel at gathering money, but fintechs shine in deployment, especially for underserved segments.
  • Fintechs leverage cost advantages and digital agility to fill the gap left by traditional institutions.
  • Banks maintain the upper hand in terms of trust and deposit mobilization.
  • Collaboration between banks and fintechs holds the key to a comprehensive and inclusive financial system.

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