Peak XV Partners managing director Shailendra Singh believes that there is a dearth of use of artificial intelligence (AI) in India’s burgeoning fintech sector
CRED founder and CEO Kunal Shah observed that AI to grow in fintech, we need to see a CEO become Chief AI Officer, and not just hire someone or elevate someone to lead AI
Singh and Shah were speaking during a session, Future of Fintech, at the Global Fintech Festival (GFF)
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Peak XV Partners managing director Shailendra Singh believes that there is a dearth of use of artificial intelligence (AI) in India’s burgeoning fintech sector.
Speaking during a session, Future of Fintech, at the Global Fintech Festival (GFF), Singh said that AI can have a transformative impact on the fintech sector.
CRED founder and CEO Kunal Shah, Pine Labs CEO Amrish Rau, and NPCI MD and CEO Dilip Asbe were also part of the panel discussion.
Commenting on the issue, Shah said, “For AI to grow in fintech, we need to see a CEO become Chief AI Officer, and not just hire someone or elevate someone to lead AI.”
Meanwhile, Singh also warned that unmindful credit utilisation is a big threat to further adoption of fintech businesses in the country. He said India should not become like other countries where credit cards are also used for online gambling.
“Credit should be used but not “abused”. It should be used sensibly,” he added.
Singh’s comments on use of AI in fintech come amid an increase in investor interest in GenAI usage in enterprise SaaS and fintech in India. Earlier, Inc42 reported that many investors are on the look out for suitable investments in GenAI-based applications and models for specific sectors.
Peak XV has a large portfolio of 61 startups in the fintech segment. It has backed startups like CRED, Groww, Go Digit, among others. Responding to a question on the things the VC firm looks at while investing in fintech startups, Singh said that fintech is a precision-based business and the sector doesn’t allow for blitz scaling.
“Fintechs must be built with a multi-decade horizon. It should be built with precision and discipline. We do not look for speed and velocity,” he said during the event.
Meanwhile, NPCI’s Asbe flagged cyber risks for the sector and called for taking measures to tackle it.
“The speed of tech is concerning, because we are building stacks on top of stacks and the way AI is going forward, there are associated cyber risks as well. We need to build stronger mechanisms to mitigate these, ” Asbe said.
It is pertinent to note that in a bid to leverage AI to foster growth, many Indian fintech startups are actively experimenting with GenAI to automate their customer support systems, offering tailor-made investment recommendations to end-users, underwriting insurance, among others.
At the heart of this push is the country’s fast-growing fintech market, which is expected to become a $2.1 Tn opportunity by 2030.
Further, India is also aiming to emerge as a ‘fintech nation’ housing the highest number of fintech firms, the Economic Survey 2023-24 said. The country also aims to have the highest fintech adoption rate in the world, it added.
The fintech sector has captivated investor interest in India for quite some time now. For instance, fintech startups cumulatively raised $1.02 Bn via 84 deals in the first half of the ongoing calendar year. With this, the sector commanded the largest piece of the funding pie in H1 2024, during which the Indian startup ecosystem cumulatively raised $5.3 Bn via 504 deals.
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