Federal Bank Embraces Fintech Collaboration for Strategic Growth

In a bid to fortify its growth trajectory, Federal Bank, a leading private lender, has announced a strategic collaboration with fintech companies, as confirmed by Shyam Srinivasan, the Managing Director and CEO of Federal Bank, on Thursday.

Highlighting the significance of this move, Srinivasan emphasized that partnering with fintech firms would significantly expand the bank’s customer outreach. Rather than viewing fintech companies as competitors, he stressed that collaboration with them is an integral part of the bank’s overarching strategy.

Srinivasan explained that fintech collaborations bring substantial value to the bank, especially in client acquisition for opening digital savings accounts. Currently, approximately 60% of the bank’s daily 15,000 new savings accounts are acquired through fintech channels.

The MD&CEO also disclosed that the bank’s exposure to loans through fintech firms primarily involves credit cards. Looking ahead, Federal Bank aims for organic growth while maintaining a balanced portfolio between secured and unsecured segments. Srinivasan mentioned that only 3% of the bank’s portfolio is unsecured, covering credit cards, personal loans, and loans to MFIs.

Federal Bank, boasting an 18% growth rate, reported a total business of Rs 4.26 lakh crore at the end of September 2023. Srinivasan reassured that the bank remains well-capitalized, with no immediate need for additional capital, and affirmed its commitment to maintaining credit standards in the pursuit of sustained growth opportunities in the market.