Convenience is king, disruption in broking and AMCs inevitable, says KV Kamath

MC Fintech Conclave 2024: Convenience is king, disruption in broking and AMCs inevitable, says KV Kamath

"Convenience is king, and companies providing it can upset incumbents," said KV Kamath, Chairman of Jio Financial Services, emphasising the accelerated transformation in the financial services sector.

Speaking at the Moneycontrol Fintech Conclave with Kunal Shah, Founder of CRED, Kamath stressed that the pace of change is accelerating, especially as convenience has become a top priority for customers. He pointed out that, while legacy companies and new-age firms alike are adapting, the financial landscape is being reshaped by disruptive forces.

Kamath highlighted that broking is already facing disruption, and the next target could be Asset Management Companies (AMCs). He also noted that regulatory constraints are creating revenue challenges for fintechs, but stressed that the focus on customer convenience is key for companies to stay competitive. Kamath added that transformation is evident in shifts like the changing landscape of CASA (Current Account, Savings Account) deposits in banks, signalling a broader shake-up in the industry.

Kamath also noted the importance of having a CEO who can drive change, particularly in the banking sector, where many institutions still operate on 25-year-old systems.

He highlighted the rapid integration of modern systems, pointing out that SaaS models, in contrast to legacy systems, can be up and running in just 30 days.

He stressed that with the right mindset, transformation is possible. "We need to have technology embedded in the business," Kamath said, underscoring the need for a transformational organization where every individual understands the role of technology in daily operations.

Kamath further pointed out that technology can play a key role in setting up deposit banks, but the pace of change also depends on regulatory flexibility. He noted that nothing prevents a Small Finance Bank (SFB) from evolving into a neobank, describing such shifts as "low-hanging fruits" waiting to be plucked in the evolving financial landscape.