Change is happening in banks with innovation from startups and fintech: IDFC First Bank CEO V Vaidyanathan

Vaidyanathan said that innovation by startups and fintechs is leading a change in the Indian banking sector.

Banks in India are witnessing change and innovation in every stage due to the innovation from startups and fintechs, said V Vaidyanathan, Managing Director and Chief Executive Officer (MD and CEO), IDFC First Bank.

Speaking at Moneycontrol’s Startup Conclave, Vaidyanathan said that in the banking sector, change is happening.

Also read: Why Rajnish Kumar believes banks will be like fintechs and fintechs like banks?

“In every stage, startups and fintechs are plugging into the system to make the whole stack efficient,” said Vaidyanathan.

Innovation, Vaidyanathan said, is leading a change in the Indian banking sector. “Startups and fintechs are plugging into the system to make the whole stack efficient,” Vaidyanathan said.

Fintechs and banks

Almost all the banks in India have partnerships in place with fintech companies. For example, HDFC Bank, the country's largest private sector bank, has partnerships in place with companies like Microsoft for cloud storage to Mintoak for lending to micro small and medium enterprises (MSMEs).

Also read: Fintechs rewriting the rule book, banks will compete and co-exist, says Rajnish Kumar

Another private sector bank, Federal Bank, has partnerships in place with Neo Banks like Fi and Jupiter for boosting digital banking.

Other than private sector banks, public sector banks like Union Bank of India have partnered with fintech company Intellect to boost transaction banking.

Additionally, T Rabi Shankar, Deputy Governor, Reserve Bank of India (RBI), said there are several advantages from innovations brought in by fintech companies.

"New innovations brought by fintechs are helping in driving down costs, refocusing products and services and improving customer reach and services," said Shankar.