The battle between traditional banks and fintech companies is entering a new phase, with banks increasingly using technology to compete directly with digital-first financial firms.
Axis Bank Managing Director and CEO Amitabh Chaudhry said banks are not simply defending their traditional businesses against fintechs but are also actively competing with them.
Speaking at the Global Fintech Fest 2026 in Mumbai, Chaudhry highlighted the changing relationship between banks and fintech companies. While fintechs have disrupted several areas of financial services, he said banks are now responding by strengthening their own technology platforms and customer offerings.
‘We are also attacking them’
Chaudhry indicated that the relationship between banks and fintechs is not simply one of traditional lenders being challenged by new-age companies.
Banks, he said, are also entering areas where fintech firms have built strong positions. The competition is therefore becoming increasingly two-way, with established lenders using their large customer bases, balance sheets, regulatory infrastructure and technology investments to compete.
At the same time, Chaudhry said fintechs should not be viewed purely as rivals. Axis Bank considers the sector both a source of competition and an opportunity for partnerships.
Fintechs No Longer Seen as an Existential Threat
One of the key takeaways from Chaudhry's comments was his assessment that fintech competition is not an existential threat to the banking industry.
Fintech companies have made major inroads into digital payments, lending, wealth management and other financial services. However, traditional banks continue to possess advantages such as established customer relationships, access to deposits, regulatory capabilities and large-scale infrastructure.
Chaudhry believes these strengths, combined with technology investments, will allow banks to remain competitive.
AI Becomes the Next Battleground
Technology is increasingly becoming central to the competition.
At the same event, Chaudhry said Axis Bank is experimenting with artificial intelligence and customer data to provide highly personalised banking services. The bank processes around 3,500 UPI transactions per second and has data covering around 450 million Indians, creating opportunities to use AI-driven intelligence for customer engagement.
The objective is to move beyond simply offering digital banking channels and instead anticipate what customers may need and offer relevant products or services at the right time.
This reflects a broader shift in banking, where AI is increasingly being used not only for customer service but also for fraud detection, risk management, personalisation and financial decision-making.
Banking Sector Also Faces Consolidation
Chaudhry also expects further consolidation in India's banking industry over the coming years. He argued that scale will become increasingly important as banks compete in a technology-intensive financial ecosystem.
He also cautioned that India's current credit growth could moderate. According to his assessment, system-wide credit growth of around 18-19% could slow to approximately 15-16% for FY27. He also flagged the possibility of an RBI rate hike in the coming months.
The comments underline how India's banking sector is entering a period where technology, scale, customer data and partnerships with fintech companies could determine which institutions gain the strongest competitive advantage.
