RBI pulls up banks for being tech laggards

* Lack of technology strategy hampering financial inclusion efforts,says RBI dy governor.

Reserve Bank of India deputy governor KC Chakrabarty on Tuesday pulled up banks and banking service providers for lagging behind in using technology on the financial inclusion front and questioned them on the fairness that the fruits of technology should be enjoyed only by those who have access to it or those who can afford it.

Listing the drawbacks one after another at a banking meet here,Chakrabarty said,Banks have to realise that for Business Correspondent (BC) model to succeed the BCs who are the first level of contact for customers have to be compensated adequately so that they too see this as a business opportunity. Is this happening? To my mind the answer is in the negative.

Similarly as regards MSPs (mobile service providers) acting as BCs,reports reaching us still suggest that the true spirit of co-operation is yet to stabilise with each still trying to destabilise the other. The entire world is looking at this experiment in India and I would urge all of you to get your act together, the RBI Deputy Governor said at the Banking Tech Summit organised by the CII. BCs are intermediaries who provide financial and banking services in unbanked areas on behalf of scheduled banks.

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Coming down on banks,he said that it was expected that technology adoption would enable the banking sector to be integrated with the global financial markets,adopt international best practices and ensure delivery of superior customer service.

But has this happened? Have the banks been able to deliver what they were expected to deliver with adoption of technology? The answers to these questions are not very encouraging, Chakrabarty said.

Often the inhibiting factors attributed to this would be poor strategic alignment between business and IT strategy,absence of appropriate and re-engineered business processes and delivery models,lack of project ownership,poor risk management,ineffective resource management and missing governance principles,he observed.

Finding loopholes in the system,Chakrabarty said the human resources in banks were drained as they have not done appropriate Business Process Re-engineering before implementing IT projects and have failed to leverage technology to their benefit.

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