RBI’S VISION ON TECHNOLOGY IN THE BANKING SECTOR- Page 3
(Opening address by Mr. G. Padmanabhan, Chief General Manager - in - Charge, Dept. of Information Technology, Reserve Bank of India at the Banknet India's Bank Tech Summit at Taj Lands End, Mumbai on September 22, 2005)
I must draw your attention at this juncture to the attendant challenges that technology poses. There is a common perception that with banks becoming highly technology driven, the familiar brick and mortar bank branch may fade into oblivion, and virtual banks may be the direction of the future. Recent studies in the west have shown that the customer still prefers a face-to-face discussion oriented approach towards financial decision making. Banks may thus have to provide for an optimal marriage between technology and traditional forms of banking, which is all the more relevant in the Indian context.
Yet another significant aspect which requires utmost importance is Security in an IT environment. While physical security can be implemented with relative ease, the changing face of IT and the complexities involved in the entire aspect of Information Technology have necessitated Information Security to be given prime importance. As institutions that deal with money and the movement of it across the length and the breath of the country (and the world), security of transaction , security of systems, security of processing and security of funds all become critically important. The need of periodical, IS audit and implementation of IS policies in the banks need to be among the high priorities of banks.
It is in this context that I propose a new requirement – KYE, or Know Your Employee. While all of us are experts on adhering to the requirements of KYC, the recent cases of technological mishaps resulting in mainly employee (or ex- employee) induced financial loses to institutions not to speak of reputation ones, highlight the urgent need for banks to know each of reputational ones, highlight the urgent need for banks to know each of its employee very well. This process, I must caution is to be enforced not only prior to the recruitment of the employee but even more vigorously thereafter. A potential hazard is an employee who always stays late and attends to work with little or no supervision, the consequences of which are easily imaginable. Fortunately for us, IT based systems to monitor employee performance, access control and other similar aspects would make this task easier to accomplish.
Any input on IT in the financial sector is not complete without the reference to payment and settlement systems. The single largest beneficiary of inroads in technology is the payment and settlements systems initiatives- such as electronic modes of funds movement (ECS, EFT, SEFT etc), the real time gross settlement Systems which has provide the way for instantaneous transfer of money within seconds between banks spread across many cities and the impending introduction of Cheque Truncation aimed at reducing the delays in realization of paper based Cheque and other instruments. All these have provided the customer with a wide variety of service offerings, and the banks with the new customized products and services. I am confident that this trend will continue and we shall soon see the drawing of many more IT based products and services with enhanced security features, developed and deployed by banks in India. And why not? If we are ahead of the world in putting in place PKI enabled structured financial messaging, we can be ahead in other areas as well towards achieving a better CRM. One word of caution here. Make sure that IT is Subservient to business and not the other way round.
I am sure that today’s deliberations would be beneficial to all of you and new vistas would be chartered during the day. I take pleasure in inaugurating the Banknet India's conference and wishing all success.
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Leveraging IT for business benefits in banks- Welcome address by Mr. Anurag Khanna, Managing Director & CEO, Banknet India at the Bank Tech Summit... Read More
Press Coverage of Banknet India's Bank Tech Summit... Click Here
Banknet India's Bank Tech Summit on 22nd September 2005 was attended by 300 participants from more than 100 banks and IT companies from India, US, UK, Australia, France & Singapore. 20 Prominent Speakers included- Mr. G. Padmanabhan, Chief General Manager - in - Charge, Dept. of Information Technology, RBI, Mr Simen Munter, Chief Operating Officer of HSBC Bank ... Read More
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