Amit Shah, chief fintech officer and senior president of Corporate Strategy, Marketing and Communications at YES BANK in India, outlines the role of fintechs in financial services today.
“Fintechs are far more agile than traditional banks and are able to focus on a very narrow range of problems,” explains Shah. “But they lack the ability to scale and the regulatory know-how. With this in mind, partnerships between the two provide a win: win opportunity.”
This type of collaboration is a common occurrence for YES BANK. “We have forged relationships with some truly impressive fintechs, although we are careful to choose only those solutions that fill a genuine business need,” Shah said. “We still rely on big companies for enterprise solutions. It’s a mix and match of buy vs build vs partner and enterprise vs fintech.”
Finding the best fintechs is an art that YES BANK has fought hard to get right. “We run an accelerator program called YES FINTECH, so every six months we invite fintechs from across the globe to get involved,” Shah says. “We operate an exchange program with 15 partners from key countries, so we’ve now established a good stream of applicants.”
“We’ve also created YES SCALE, an in-house multi-sector start-up accelerator covering innovations in Smart City, Clean Tech, Agritech, Lifesciences Tech and Edu Tech. The 15-week program is aimed at creating financial innovations by sourcing, scaling, and sustaining emerging technology solutions in sunrise sectors of the Indian economy. For start-ups that have ready solutions, YES SCALE will provide access to a technology sandbox to help them test their solutions in a risk-free environment and give them financial support.
Despite these successes, Shah points out that a number of challenges remain. “Mindset is the number one challenge at YES BANK,” he explains. “We have 20,000 employees with an average of 20 years’ experience in the industry. They are hardwired to work in a certain way, so achieving cultural change is difficult. Thankfully we have extraordinary support from our CEO who really understands what it takes to push the bank into the future – being led from the top really helps.”
Choosing where to invest is another challenge. “We need to invest carefully in technology and innovation,” says Shah. “Success demands both patience and capital. We need to strike a balance and allocate enough budget for a project to succeed while appreciating that we might need to sacrifice short term profitability for long term gain.”
Shah believes the fact that YES BANK is relatively new helps it stay one step ahead. “If you have a spaghetti infrastructure then, irrespective of how well intentioned you are, you are going to struggle,” he says. “Luckily, we’re relatively young and so our systems are good. We’ve spent the last five years establishing strong API-driven solutions so we’re ahead of the curve in that regard and well placed for a successful future.”