At the same time banks Need to follow the rules and be careful while investing technologies to meet supervisory challenges as they experiment with new services in a post-COVID world, although ultimately its governance standardsThe business model, risk culture, and assurance function will decide how well it holds up in the long run, he said.
“For continuous engagement with supervised entities, a web-based and end-to-end workflow automation system has been developed (by RBI)” Jain said in a keynote address at a summit. It has various functions for cyber security including inspection, compliance and incident reporting. An in-built remedial workflow, time tracking, notifications and Alert, Management Information System Reports and Dashboards. “It is launching shortly”.
With the proliferation of digital banking, cyber security has become an extremely important area of ​​supervisory concern. To address this concern, the Reserve Bank has developed a model-based framework for assessing cyber risk in banks using various risk indicators, risk events. ” cyber practice based on imaginary scenarios”.
While much is being done in the field of cyber security, these risks are constantly evolving in the dynamic environment we operate in, and therefore IT systems must be continuously monitored and continuously enhanced, cautioned Jain.
Globally, fintechs are challenging banks with more convenient offerings, better access and lower costs for customers. In addition, developments in the areas of artificial intelligence, robotics and chat advisory, digitalization, distributed ledger technology, quant computing, cloud arrangement, data analytics, new methods of remote, though they have benefits, are also creating new risks, Jain warned. Also, climate change, KYC/AML, cyber security, virtual currency as well as increasing reliance on outsourcing are some of the other major challenges that will need to be addressed, he said.
Banks need to be agile and creative to stay ahead of the digital curve, but banks have to align their products to comply with existing laws and regulations. “Financial institutions will need to experiment with new technologies and tailor their products and services in line with business strategy and in compliance with existing laws and regulations,” Jain said. Leveraging on technology will also require increased financial investment, expertise and capacity building, appropriate resource allocation and further strengthening of operational capabilities.