“In line with our outsourcing guidelines, the board and senior management should ensure that at no point of time the core activities of the banks are outsourced,” Chowdhury said. “We are witnessing an increase in outsourcing of services in the banking and finance sector. The view is that banks should focus on upgrading their core banking solution development.”
Chowdhary said that development and upgradation of core banking solutions can provide easy integration.
Chaudhary also said that banks need to diversify while looking at tech partners. “You need to diversify,” he said. “I am well aware that with the development of technology there is a demand for industry participants to keep pace with it. Which means you have to constantly collaborate with technology providers. This leads to concentration. Diversification is probably the easiest way to mitigate that and I urge all banks and other industry participants to explore new options when it comes to technology adoption.
The Reserve Bank of India, which is concerned about financial institutions outsourcing various key activities such as booking of fixed deposits, buy-now-pay-later loans and credit card onboarding, is trying to ensure that services Non-compliance should not be abused by entering into a contract. Regulated entities.
Chaudhary said that banks should ensure
That adequate safeguards have been put in place to ensure the financial stability of the banking system.
“It is equally important that we all familiarize ourselves with the evolving technology and become self-reliant to reduce dependency and ensure effective operation of outsourcing,” he added.
Choudhary also advised banks to embrace and maintain their competitive edge digitization,
“Digitization is happening in silos,” he said. ,
It is very important for the banking sector to complete digitization. Seamless integration across all operations and systems.
Chowdhury said the central bank is laying more emphasis on digitization and exploring technological solutions that can be implemented to provide industry participants with faster, cheaper and easier technology that will enable them to achieve digitization. can be enabled.
A pilot project for complete digitization of Kisan Credit Card (KCC) has been envisaged in collaboration with Innovation Hub of RBI. It will tap into data sources like digitized state government land records, UIDAI, credit information companies, agritech companies etc.