Reserve Bank of India (RBI) Deputy Governor T. Rabi Sankar has laid out a clear roadmap for traditional banks aiming to stay relevant in the age of agile FinTech competition. While balance-sheet size once defined banking strength, he argues, the new battleground is data capability, technology agility and ecosystem collaboration. ETBFSI.com+2The Economic Times+2
Sankar noted that innovations like the Unified Payments Interface (UPI) were more aggressively adopted by FinTechs than banks. He cited this as a key lesson: “FinTech players needed UPI a lot more than banks needed UPI.”
One core issue he highlighted is banks’ reliance on monolithic legacy IT systems and the high fixed-cost structure of branch networks and compliance. These make incremental digitisation insufficient to keep pace with FinTechs.
Sankar listed three strategic imperatives for banks:
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Modernise core infrastructure — break up rigid systems to enable flexibility and scalability.
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Adopt platform orientation and API collaboration — banks should integrate with FinTechs rather than see them purely as competitors.
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Re-engineer innovation culture and build skills — investing in human capital and up-skilling is critical.
He also emphasised that ultimate competitiveness will rest less on capital strength and more on how well organisations handle data, technology, and customer experience.
Another point of concern: rising digital-fraud incidence underscores banks’ vulnerability as they evolve digitally. This adds a layer of urgency to the transformation mandate.
For banks, the takeaway is clear: build modular and agile architectures, leverage FinTech partnerships, invest in analytics and data-driven insights, and foster an internal culture that values innovation over preservation. Doing so will improve competitiveness in a market where agility and client-centricity count more than ever.
In sum, Rabi Sankar’s advice signals a shift: the future of banking lies not in the biggest balance sheet, but in the bank that can intelligently adapt, integrate and serve in the FinTech-driven digital ecosystem.
