NEW DELHI: The banking sector will face competition from Google, Meta, Apple, and Amazon in future, says Uday Kotak, Founder & Director, Kotak Mahindra Bank.
Financial institutions of tomorrow will be technology-powered risk management companies that are customer centric, he predicted. “What will happen if Google is allowed a bank tomorrow,” he asked while addressing the audience at a ceremony commemorating the 68th Foundation Day of All India Management Association (AIMA) on February 21.
He, therefore, asked the Indian banks and financial institutions wake up and shake up. Talking about India moving towards capital convertibility and making Indian rupee a reserve currency, Kotak said that India can make its rupee a reserve currency provided it reaches a macroeconomic stability that allows the world to trust India with keeping others’ money safe. “If we manage our fiscal and current account and establish institutional processes that others can trust, we would have the foundations for a reserve currency,” he said.
Kotak suggested that India could experiment with rupee’s convertibility by opening a window of convertibility for both trade and investment in the GIFT City. “See how it goes and gradually make it easier for Indians to move the currency in and out,” he said.
Kotak welcomed the introduction of the central bank digital currency (CBDC) by the RBI. He said it could be a big positive and change the way finance works in the country. He said banks will still be needed as intermediaries and for risk management, a role that they have been the heart of the financial services sector. Talking about crypto currencies, Kotak said he doesn’t understand or like the cryptos, but he pointed out that cryptos are like gold and derive their value from a shared belief in their value despite there being no logic in it.