UPI (Unified Payments Interface) transactions are witnessing rapid growth every month, with the latest figures surpassing those of the previous month, according to Nitin Chugh, Deputy Managing Director (DMD) and Head of Digital Banking & Transformation at State Bank of India (SBI).
Speaking at the BT Banking & Economy Summit, Chugh highlighted the increasing adoption of UPI, stating, “UPI is evolving month by month, and transaction volumes are growing at a pace that surpasses the previous month’s numbers. SBI alone handles 19.5 crore UPI transactions per day.”
UPI Transaction Volume Reaches 16.99 Billion in January
According to data from the National Payments Corporation of India (NPCI), UPI transaction volume in January grew by 1.6%, reaching 16.99 billion, up from 16.73 billion in December 2024. Chugh emphasized that this steady growth indicates an increasing reliance on digital payments across India.
Growth in UPI Leading to New Banking Opportunities
Chugh noted that UPI is not just increasing in volume but also creating new opportunities for banks. He explained that customers who previously made fewer transactions are now using UPI more frequently, leading to the development of new banking categories.
“UPI has expanded the financial ecosystem. With such high transaction velocity, banks can now develop better algorithms to analyze data and improve services. It has also created new opportunities for lending based on transaction patterns,” Chugh said.
UPI Success Should Be Replicated in Other Sectors: KPMG
Hemant Jhajhria, Partner and Head of Consulting at KPMG India, emphasized the need to expand UPI-like innovations into other sectors. He highlighted the importance of investing more in banking technology to keep up with the fast-changing digital landscape.
SBI’s Digital Expansion: YONO at the Core of Growth
Addressing concerns about the market’s perception of digital banking, Chugh stated that SBI’s YONO (You Only Need One) platform is fully integrated with the bank’s core operations.
“For us, digital banking is not something separate. YONO is our new way of doing business, and SBI’s market value has been growing consistently. We have never seen a scenario where the market has corrected due to YONO being overvalued because it is an essential part of the bank,” he explained.
AI and Cybersecurity: Key Focus Areas for Banking Sector
The panel also discussed how Artificial Intelligence (AI) is transforming the banking sector. Vishnu R Dusad, Managing Director and co-founder of Nucleus Software, stated that AI would play a crucial role in hyper-personalizing banking services.
“AI will help banks provide more personalized experiences to customers. If banks do not evolve with technology, it will be difficult to compete,” he said.
However, the increasing reliance on digital platforms also raises concerns about cybersecurity threats. Jhajhria likened cybersecurity to a cat-and-mouse game, where banks must continuously invest in security measures to stay ahead of cybercriminals.
“The more banks invest in cybersecurity, the better they can protect themselves from potential threats,” he said.
Conclusion
With UPI transactions surging, AI-driven banking services expanding, and cybersecurity challenges growing, the Indian banking sector is undergoing a digital transformation. Experts agree that continuous investment in technology and security will be key to maintaining growth and stability in the industry.