The rapid rise of digital platforms has raised new challenges, including unregulated digital lending apps, cryptocurrencies and cyberattacks, according to MK Jain, Deputy Governor of the Reserve Bank of India.

He also said 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.

Speaking at the National Institute for Banking Studies and Corporate Management (NIBSCOM), Jain said, “Technology revolution has certainly enhanced the efficiency of financial entities and resulted in significant improvement in doing business with banks, it has also posed new challenges. Several concerns emanate from the mushrooming of unregulated digital lending apps, cyrptocurrencies, cyberattacks, etc”

He said that banks and financial institutions should be ready to scale up their investments in technology. “In many cases, legacy core banking systems designed in the pre-mobile app era may not be amenable to swift changes in product design, computational capabilities, API integration, etc,” Jain added.

On human resources

 In addition to technology, the main differentiator for success is quality human resources.

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“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,” Jain said

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