Next phase of our growth will come from fintech: Federal Bank MD

Given the changing dynamics in the domestic remittance business, Federal Bank Looking to reap the benefits from the multiple increase in ticket volume in the past few years.

According to Fed General Manager and CEO Shyam Srinivasan, domestic remittance business volume is related to more than Rs 1,00,000 crore, of which about Rs 20,000 crore is from remittances from Kerala to other states.

“This is a huge market for us,” said Srinivasan. Business line.

He said that intra-state remittances in India are on the rise, reflecting the changing nature of migration.

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“We control approximately 21 per cent of the remittance business in India. We have a more active individual customer base, which is adding impetus to the growth of our product line.”

In the late 1980s and 1990s, remittances were a small-scale, but huge-scale business. However, ticket size has grown diversified in the last two decades, and the bank is reaping the early bird advantage.

The flow of remittances towards the eastern part of the country is rapidly increasing along with that of northern India. He noted that over the next few years, one will see the dynamics of internal remittances change.

“I think the current fintech revolution is similar to our experience with the NRI business. The majority of our clients are basically a bit of a ticket now and in the early part of their careers. They will all mature in the next few years and they will do the same thing that NRI clients did for us a few years ago,” Srinivasan said. “I strongly believe that the next phase of our growth will come from FinTech.”

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“We have become the partner bank for all the leading FinTech companies in India. FinTech is not just about money, it is also about customer base as well as scale.

For big banks, fintech may not be attractive now.

“Banks of our size can deal with fintechs, but it takes at least 4-5 years to start a head start. Compared to players who are smaller than us, we are more attractive to them, since we have a larger client base.”

In terms of competition, he said that the market is huge and growing, thus, there is room for everyone.

“However, we do have an early bird advantage because we’ve been in the business for 3-4 years,” he said.

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Srinivasan said the bank is seeing widespread growth in credit purchases, especially in the industries sector.

Growth is coming from promising sectors such as renewable energy sources, infrastructure and alternative energy services. He said the digital ecosystem and general digital infrastructure also looked good.

However, services related to exports may face some challenges due to the external situation, while the industries serving in India are promising, he noted.

Regarding investment plans in the field of financial technology, he said that the bank has already made investments in 300-400 APIs.

Fintechs usually have technology-enabled products. They can develop a customer base but they need a banking platform like CBS or a credit card system to offer their services.