Innovative Fintech Strategies: Axis Bank’s MD Shares Expert Insights 2023
According to Amitabh Chaudhry, MD & CEO of Axis Bank, at the Global Fintech Festival on Wednesday, “new age fintech companies must understand that customer interests are paramount and should ensure that the propositions they offer are distinctive in nature and stand out from what is already available in the market.”
According to Chaudhry, fintechs must watch out for collaborations with banks that favour one party at the expense of others. “In the end, it’s a three-legged stool, and the client, fintech, and bank all need to balance one another. Second, there must be a win-win partnership; one plus one must equal more than two, and no one may benefit at the expense of others.
The MD emphasised that in order to avoid harsh penalties and possibly having their businesses shut down, fintechs must proactively respond to laws and take steps to comply with them. Fintechs can get advice from banks if they so wish, but he stressed that they must adhere to legal requirements.
“If you don’t (adhere to norms), you’ll get stopped in your tracks one day and you might not even have time to rework your model,” the speaker warned. You’ll come to an end. People now plainly work to make sure that we can still travel about while under rules. My experience has been that they naturally catch up to you much more quickly than you may expect,” the MD stated.
Fintechs should also have a broader sense of vision, knowing the sort of company they want to create in the long run. Fintechs must have a long-term strategy for partnering with banks, even though their objectives may shift in response to market needs.
Regarding the Reserve Bank of India’s (RBI) decision to let banks to issue pre-approved credit lines via the Unified Payments Interface, Chaudhry remarked that while the idea is solid, it is still in the early stages of development.
What kind of customers will be permitted to get a pre-approved credit line on UPI? And if the customer is eligible, do they really need credit from UPI at a time when there are numerous other credit-based products? These are all questions that banks must first answer.
“Instead of getting overly excited, let’s make sure we’re standing in the river with the flow, understanding and appreciating how the water is flowing, what the speed is, and what are some trends because, yes, I do believe that tsunami and earthquake will come one day, and then you cannot say I want to get out of the water. To benefit, you must then be standing in the water, the man explained.
The financial technology (fintech) sector has witnessed remarkable growth and transformation in recent years, reshaping the way financial services are delivered and accessed. Fintech firms have leveraged technology to provide innovative solutions across various sectors of the financial industry, including payments, lending, insurance, and wealth management. However, the dynamic nature of the fintech landscape demands that these companies continuously evolve and enhance their client propositions to stay competitive and relevant.
Fintech firms have disrupted traditional banking and financial services by introducing digital solutions that are often more convenient, cost-effective, and user-friendly. These companies have been quick to capitalize on emerging technologies, such as artificial intelligence, blockchain, and data analytics, to create innovative financial products and services. As a result, they have attracted a growing customer base and significant investment.
Axis Bank, one of India’s leading private sector banks, has played a significant role in embracing fintech and digital transformation. Its Managing Director, who is a prominent figure in the financial industry, has emphasized the importance of fintech firms offering better client propositions. Here are some key insights:
Fintech firms must prioritize a customer-centric approach. This means understanding customers’ needs and pain points and designing solutions that cater to them effectively. Client propositions should not only focus on technology but also on enhancing the overall customer experience.
The fintech industry is highly competitive, with new players entering the market regularly. To maintain a competitive edge, firms must invest in continuous innovation. This includes developing new products, improving existing ones, and staying abreast of technological advancements.
Leveraging data analytics is essential for understanding customer behavior and preferences. Fintech firms can use this data to personalize their offerings, provide tailored financial advice, and enhance risk management practices.
Security is paramount in the financial industry. Fintech firms must prioritize robust cybersecurity measures to protect their clients’ sensitive information. Building trust with clients through transparent practices and compliance with regulations is also crucial.
Collaborations with traditional financial institutions can be mutually beneficial. Such partnerships allow fintech firms to tap into established customer bases and gain credibility, while banks can leverage fintech innovation to improve their services.
Adhering to regulatory requirements is non-negotiable in the financial industry. Fintech firms must ensure that their client propositions comply with local and international regulations, fostering trust among clients and regulators alike.
A compelling client proposition sets a fintech firm apart from its competitors. It can attract new customers and help retain existing ones, leading to sustainable growth.
When fintech firms provide valuable solutions that meet clients’ needs, they build trust and loyalty. Loyal customers are more likely to continue using the firm’s services and recommend them to others.
An enhanced client proposition allows fintech firms to explore new markets and demographics. It opens up opportunities for growth and diversification.
Fintech firms with strong client propositions are more likely to attract investment. Investors are keen on companies that have a clear understanding of their target audience and a well-defined value proposition.
Fintech firms are at the forefront of transforming the financial industry, offering innovative solutions that benefit consumers and businesses alike. However, the dynamic nature of the fintech landscape necessitates a relentless focus on improving client propositions. As highlighted by Axis Bank’s Managing Director, a customer-centric approach, continuous innovation, data-driven decision-making, security, trust, partnerships, and regulatory compliance are essential elements for success in the fintech industry.
In an era where technology evolves rapidly and customer expectations continue to grow, fintech firms that prioritize their client propositions will not only survive but thrive in the ever-changing financial landscape. The future of fintech lies in its ability to put the customer at the center of its operations and adapt to their evolving needs and preferences.
