Banks must ensure better IT solutions for customers: RBI

IT must be used to lower cyber fraud

The Reserve Bank of India Deputy Governor K C Chakrabarty told banks on Thursday that their “Focus of all innovation should be on the customer” and it should never be driven only by internal processes, systems or employees but customer satisfaction.

He also said banks would need to ensure that they implement solutions that exploit the latest available technology to build their applications/solutions to ensure customer’s delight. “...I would caution the banks that unless they keep them (solutions) simple, they run a risk of losing their customer base to their competitors,” he said.

Addressing the CII’s BANKing TECH 2012 summit here, RBI Deputy Governor said it is also imperative that redundancy is a threat and alternate service delivery channels are available to the customer. “We need to give a thought about this and provide workable systems at the earliest to retain the customer within the fold of the banking system,” added Chakrabarty.

Emphasising the banking industry use of Information Technology, Chakrabarty said right from acquiring a customer to servicing the customer’s needs, building the customer relationship to managing employees, processes and partners, every action in the bank’s value chain relies on technology to ensure efficacy and efficiency.

Further, he said those retail banks will survive and thrive in the current economic climate who are using new technologies and channels to grow revenue from basic services, such as deposits and loans, by understanding customer needs and services cost-effectively and calculating the unique lifetime value of customers to the institution.

Touching upon cyber fraud in banks, he said it is necessary to improve controls and examine the need for pro-active fraud risk assessments and management processes in commercial banks.

He further viewed that we cannot go from a poor to a developed nation without technology and innovation but it is our job to reduce negative outcomes of technology and innovation while retaining benefits.

Talking about the use of technology to enhance profitability, Chakrabarty said that a bank can consolidate and streamline customer segments with accurate, segmented, easy-to-access data and analysis tools which can be used to develop strategies and set targets to advance the profitability of each customer segment and individual customer.

Global, domestic issues raise financial stability risks, says report

Even as the domestic financial system remains robust, risks to financial stability have increased in the recent past due to the deteriorating global macroeconomic situation coupled with subdued domestic growth, the Reserve Bank of India has said.

In the Financial Stability Report (FSR) released on Thursday, the central bank said, “Risks to financial stability have worsened since December 2011, primarily due to the global risks and domestic macroeconomic conditions.”

Dwelling on the risks posed to stability, RBI said global sovereign debt problems and risk aversion, domestic fiscal position, widening current account deficit and structural aspect of food inflation pose a threat to stability.

On the global environment, the report said deepening crisis in the Euro area will increase the downside risks to global macroeconomic environment.

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