Following members of the FIAKS community participated in the knowledge sharing E-Panel discussions:
- Mr Arun Tanksali, Co-founder & CTO, Nearex
- Mr Riaz Maniyar, Founder & CEO at easy2lend.com
- Mr Ravi Virwani, Vice President – Rural Home Loans, Fullerton India Home Finance Company Ltd
- Mr Rishi Prakash Mantri, Senior Vice President (Digital Payment – Solutions & Design, YES Bank
- Mr Shashank Kumar, Co-Founder at Razorpay
- Mr Kamonasish Aayush Mazumdar, Chief Marketing Officer, MeraEvents
- Mr Rajiv Rai , Chief Digital Officer, Edelweiss Financial Services
- Mr Ajay B Panicker, CEO & Founder, NetPay Limited
- Dr R Bhaskaran, Former Chief Executive Officer, IIBF
- Mr Abhishek Mody, Associate Director-Payment & Digital Initiatives, IDFC Bank
- Mr Hemal Shah, Technical Product Manager, Mastercard
- Mr Vishweshwaran R, Associate Director- IDFC Bank
- Mr P B Prakash, Head Financial Institutions Group, IndusInd Bank
- Mr Abhishek Arun, Vice President, Paytm
- Many other CEO/CXO Bankers & Fintech professionals on FIAKS Forum
FIAKS community Question
Will entry of GAFA/FANG will result in unbundling of banks in consumer banking space? How banks are preparing to de-risk themselves from possible closure of the consumer banking business? After WhatsApp moment in telecom (losing voice & data business) looks like WhatsApp moment is in offering for Banks in India too
FIAKS Community Discussions
Before starting the debate let me inform what GAFA & FANG mean? GAFA stands for Google, Amazon, Facebook, Apple. FANG stands for Facebook, Amazon, Netflix, Google.
The discussions started with saying that Private & MNC banks have never been interested in financial inclusions. They are looking at serving profitable customers. No private or MNC bank ever sells “No frill accounts”. It was the regulator whose policies are driving the penetration of financial products in rural areas. While PSU/Cooperative banks are blamed for various reasons but they have done lots of work in rural areas which has gone unnoticed. A recent initiative by Indian regulators to have a data storage in the home country and have local offices is a great step and it also helps in creating employment in India.
Another member said small entrepreneurs worked for a decade to create awareness and acceptability with preconditions of mandatory rural engagement and then the giants gobble up the whole thing.
Reacting to this, a private banker said this sounds like the Bombay Club. We should be careful not to promote blind protectionism. Innovation, wherever it comes from, should be welcome. The ’80s and the ’90s were dominated by the MNC banks but that did not prevent HDFC and ICICI from coming up. The beneficial effect of WhatsApp for small businesses today is immeasurable.
A FIAKS community expert said that we can’t stop banking innovation because banks are innovating. Inclusion and innovation can’t be separate things. In a certain manner, one can say WhatsApp will democratize payments more than SBI in a decade. What matters is the service, not how the service is given. If the total cost of operation is lower for WhatsApp than for SBI then WhatsApp will obviously be able to provide better financial products at better rates, along with obvious user-friendly features that SBI, ICICI, HDFC Kotak and other banks can’t match. Many of the current Giants have started very small, hardly a decade ago. Being efficient and swift should get it’s due somewhere
Another, community expert said it is, in my view cyclical. In many countries in Africa, mobile money ate the banks’ lunch, until they became super dominant. Then regulation kicked in and they are now as regulated as banks and have become the new “banks” which others are disrupting. Even someone like PayPal needed to acquire banking licenses in some geographies and the disruptor became the new incumbent (or, possibly even, joined the old enemies). If WhatsApp or Google is successful, they will be the new banks. The banking industry is *not* the current players – it is formed by whoever provides the banking services. If some of the current ones are replaced by new “banks”, then that’s the natural order of things. We shouldn’t be erring on the side of too much caution. We (as a country) can’t be creating hurdles before any new approach has even reached any success, and definitely not because we are worried they will succeed! India is a tough market and there is no guarantee that any of them will succeed. And to pick a point from your original question, creating hurdles against new players or technologies in order to protect incumbent jobs is possibly the worst option. So let them come in, let them succeed and then see what controls need to be applied.
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