We’ve come a long way from rushing to banks before 12 noon to ensure that high-value cheques are presented the same day for clearance, putting up with moody clerks who’d make you wait forever in serpentine queues. But with it comes the allied trouble of data breaches, spamming and phishing. India’s largest private bank HDFC Bank is faced with one such crisis.

Nearly six lakh accounts have been compromised so far, and the number is counting. The incident has sparked different debates. One faction believes customers are at fault, falling for trap messages. But to be fair, banks inundate our mobile phones and e-mails with so many messages everyday that it’s almost impractical to sieve the genuine from spam. Then again, banks ask how they can reach out to customers with the products and offers; how else to grow the business!

And with mobile phone numbers, PAN and Aadhaar cards mandatory for hotel booking to vaccines and availing banking services, each of us are passively contributing to the lucrative ‘data trade’ business. Much of the digital advancements are less than a decade old, and it’s pertinent to ask if banks are spending enough (and holistically) on this.

Statistics indicate that Indian banks spend less than 10 per cent of their operating expenses towards technology, while globally the number is 20 per cent-plus. Still worse, much of the spend is towards origination and front-end of the tech-platform like the website or apps of the bank, and the back-end is quite neglected. Back-end is the extremely critical aspect for smooth integration of customer information, underwriting processing and data protection to name a few. When there is a surge in traffic, banks add some incremental capacities to support the front-end without augmenting the back-end.

Bandaging is a less expensive, short-term exercise compared to the latter, which needs ample planning, bigger budgets and the right long-term tech vision. At present, the purpose of investing in tech is to reduce the customer acquisition-related opex. But we’ve reached a stage where preserving and improving the trust of the customer is becoming more critical if the pace of acquisition must sustain. If banks take longer to acknowledge this, such phishing expeditions may become everyone’s problem. After all, the ocean is fast expanding.

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