As India’s economy gains momentum, the banking industry will be the first to expand, said KV Kamath, independent director and non-executive chairman, Jio Financial Services, at the Business Standard BFSI Insight Summit 2025 in Mumbai on Wednesday.
In a fireside chat with Business Standard, Kamath said, “As economic growth gains momentum, the first industry to bulk up and grow is banking. In India, it will be banks along with capital market players.”
He said the country’s financial ecosystem, including banks, capital markets, mutual funds, insurance and pensions, has evolved to give consumers greater choice. “Technology has made things seamless. Your financial savings can now move into various forms, say investments, back to saving… back to consumption… in a seamless manner,” he said.
Technology reshaping financial choices
Kamath said the financial landscape is witnessing a structural shift as consumers now use technology to deploy their savings more efficiently. “A layman now knows how to deploy savings into products which give the highest return,” he said.
He added that other structural enablers, such as a well-established pension system, insurance and mutual funds, have created a “parallel capital market” that offers customers a range of choices. “The consumer has choice and technology has a seamless movement from one market to the other,” he said.
Banks must rethink their core models
Kamath said that banks need to reassess their core operating models in light of these shifts, adding that they will increasingly turn their focus to the “retail segment”.
“Going forward, you will see banks increasingly look to the retail customer,” Kamath said, adding that every financial player must understand which customer segment they are catering to and adapt accordingly.
Banks, not fintechs or NBFCs, hold the advantage
However, Kamath underlined that non-banking finance companies (NBFCs) cannot compete on the same scale as banks. He further said that fintechs, being non-deposit-taking entities, also “naturally cannot compete with banks in India”.
Kamath said while Indian banks are investing too much, they are not investing in the “right technology”.
“Banks will have to reinvent themselves in the bargain. Reinvention is not a difficult task with technology that is available today. They can reinvent themselves pretty quickly. The question is, will they and how quickly,” he said.
Need for vigilance in digital banking
On digital safety, Kamath said both banks and customers must remain alert. “Scamster takes advantage of an imperfection. In the digital world today, we will have to be vigilant all the time. The bank will have to be vigilant, and we as customers will have to be vigilant because we do not know when or what type of new scam could occur.”
