Indian banks and financial institutions should increase investments in technology as their legacy systems may not be suited to rapid changes in product design and computation, said MK Jain, deputy governor of the Reserve Bank of India.
Banks and financial institutions should foster continuous innovation, said Jain at an event on Friday. In a technology-led dynamic environment, the financial sector will have to anticipate and prepare for requirements.
“Banks and financial institutions must collaborate to leverage technology and derive synergistic benefits for optimising costs, maximising revenues and enhancing customer experience. However, while doing so they should ensure data privacy and protection as well as addressing consumer grievances and protecting them from unfair practices,” he said.
Jain said data is being touted as the new oil and for banks and financial institutions to harness the data, so they have to build capacities in technology, analytics and human resources. “With a dynamic and rapidly changing environment, the skill gap is widening. To address this, banks and financial institutions have to attract, train and retain talent”.
“Further, there is a greater need for employees to be flexible, agile, open to new technologies and proactively pick up new skills to remain useful. Consequently, upskilling and reskilling of human resources is a sine qua non to face the emerging challenges. This is where capacity building will play a major role in the financial sector,” he said.
In view of the Ukraine war, Jain said that Indian banks and financial institutions should strengthen their risk management capacities to monitor ongoing global events, quickly recognise their potential impact and proactively to mitigate and insulate themselves from adverse consequences.