Veteran banker and Jio Financial Services Chairman KV Kamath said that the biggest mistake fintechs are making today is burning too much money because it is too easily available.
"Fintechs are burning money without understanding when to stop. There is no endgame in sight," Kamath said, speaking at a fireside chat with CRED founder Kunal Shah at the second edition of Moneycontrol India Fintech Conclave.
Kamath recollected meeting with a fintech, which had more than 1,000 software engineers. He added that he was expecting the answer to be 25 engineers. According to him, fintechs are constantly building more and newer products without looking at business outcomes.
"They could stop the burn as they are growing well. Fintechs are burning money because of too many engineers. They need to understand business too," Kamath said.
According to him, the venture capital and private equity firms are investing too much money for growth, innovation and disruption without helping the startups stabilise their business and profitability.
But Kamath agreed that the pace of transformation has accelerated and banks too will feel the heat.
"Broking is disrupted. AMCs are getting disrupted. Today there is revenue constraints on fintechs because of regulatory reasons," Kamath said.
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