Fintechs a real competition to the Banks

The former Deputy Governor of Reserve Bank of India (RBI) R Gandhi, while giving a key note address at the Digital Payments Conference organised by the Indian Banks' Association, said that fintech companies are going to be real competition in the payments segment. He stated, "Fintech companies are making inroads in the Banking segments and there is going to be a real competition in the payments section." Fintech is disrupting the financial system and there are only two options out. One banking can expand in this segment or they can cooperate with the fintech companies, he said on the competition between the fintech companies and banks at the annual conference. 

He further added that the fintech companies will eat up 20-25 per cent potential of the banks in future, if they don't coordinate. Since the announcement of UPI based WhatsApp payments, there is a concern about the growth of fintech companies and it's impact on  Banks and wallet based apps. 

Speaking at the panel discussion on Technology and Innovation in Digital Payments in the same conference, Sujata Mohan, head of Digital and New Initiatives at the RBL bank had a different view. She said that that there was no threat to banks and the app based payments features can co-exist. 

"Peer to peer (P2P) payments are good for discussions, but a lot of ground is left for merchant transaction and we can enhance especially in the hinterland", she added in the course of the discussion.   

The theme for the panel discussion was, 'How can Banks and Fintechs coexist and complement even as they successfully negotiate serious disruption'.