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    HomeNewsBusinessFintech firms may not easily extend payments dominance to other financial services: Moody's

    Fintech firms may not easily extend payments dominance to other financial services: Moody's

    This is due to open architecture of UPI and banks ramping up digital product offerings outside the payments segment, according to Moody's

    Moneycontrol News
    March 17, 2022 / 09:49 IST
    Representative image: fintech
    Fintech companies’ dominance in payments may not carry over to other financial services as “the Unified Payments Interface (UPI)ʼs open architecture means that a large user base does not necessarily make a particular service provider more competitive than others on the system,” said Srikanth Vadlamani, Moodyʼs vice president and senior credit officer, in a report.Moreover, large private sector banks and India's largest lender State Bank of India (SBI) have ramped up digital product offerings in other areas, which will help them fend off competition from fintechs outside the payment segment, according to Moody's.

    Also Read: How India compares with some nations similarly rated by Moody's

    However, public sector banks other than SBI have weak digital offerings and will be impacted by rising competition. The banks' margins will come under pressure as many fintech firms will continue to venture into other financial services such as personal loans and loans to small merchants.Notably, the overall market will also expand as technology creates more opportunities, allowing banks to counter pressure on margins with business growth.

    Also Read: World Consumer Rights Day │ Fintech firms must examine robustness of their tech platforms

    Privately owned fintech firms have boosted digital payments in the country, particularly with the introduction of UPI in 2017 that allowed funds to be transferred instantaneously.

     

    Moneycontrol News
    first published: Mar 17, 2022 10:25 am

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