Harnessing AI and Digitization: Insights from IDFC FIRST Bank's CEO

In a recent interview, V Vaidyanathan, CEO of IDFC FIRST Bank, emphasized the critical need for MSMEs in India to adopt digitization and AI to seize growth opportunities. He highlighted the unique position of India, which combines demand with technological advancement, making it an ideal environment for entrepreneurship. Vaidyanathan also discussed the evolving mindset of small business owners, who are now thinking beyond local markets. However, he pointed out the challenges in accessing growth capital, as only a small fraction of entrepreneurs receive venture funding. This season of ETNOW's Leaders of Tomorrow aims to spotlight these issues and celebrate emerging businesses in India.

By Narendra Chaudhary Jun 26, 2026, 14:10 IST

Key Insights from V Vaidyanathan on MSME Growth

MUMBAI: Thursday, 25 June 2026: In a recent interview with ETNOW Leaders of Tomorrow, V Vaidyanathan, the Managing Director and CEO of IDFC FIRST Bank, cautioned that many MSME businesses in India risk missing significant opportunities if they fail to embrace digitization and leverage artificial intelligence. Launching the 14th season of ETNOW Leaders of Tomorrow, he articulated the 'India Advantage' as a combination of demand, digitization, and entrepreneurship. He pointed out that while some nations may have demand without digitization, and others may have digitization without demand, India uniquely possesses both, making it an opportune moment for growth.

Vaidyanathan, a strong advocate for entrepreneurship and financial inclusion with over 15 years of experience focusing on the MSME sector, noted a pivotal change in the mindset of small business owners. He observed that previously, businesses were often viewed as local entities, but now there is a growing trend towards national and even international perspectives. He highlighted the significant transition from traditional businesses, such as dal and flour mills, to modern digital-first direct-to-consumer brands, emphasizing that the shift from offline to online is monumental. He stated, 'AI is the great equalizer, allowing small businesses with minimal staff to market effectively.'

However, Vaidyanathan also addressed the stark realities of accessing growth capital, revealing that venture capitalists typically invest in only 3 to 4 out of every 100 entrepreneurs. He questioned the fate of the remaining 95, who often struggle to secure equity, which is essential for obtaining debt financing.

This interview will be broadcast on ETNOW on Friday at 7:30 PM, with a repeat airing on Saturday at 6:30 PM. The 14th season of the flagship entrepreneurship show, LEADERS OF TOMORROW, is themed "Emerging Businesses: The India Advantage", focusing on the opportunities within India's startup and MSME landscape. Sponsored by IDFC FIRST Bank and supported by STAR Health Insurance, this season will feature discussions with notable figures such as Bharat Khera, Secretary of MSME, Government of India; Raghav Chandra, Co-Founder of Urban Company; CP Gurnani, Co-Founder of AIonOS; and many others.

Additionally, Leaders of Tomorrow Springboards will expand the platform's reach to 15 cities across India, while LoT Vodcasts will provide a digital extension of the series, offering insightful and candid discussions that are shaping the entrepreneurial landscape in India. The season will conclude in March 2027 with the Leaders of Tomorrow Awards.