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Rapid Digitisation Changing Nature of Banking Risks: RBI Deputy Governor
RBI Deputy Governor Swaminathan J: The RBI Deputy Governor has warned against the rapid digitization of banks. He stated that risks now spread in hours, not weeks. He emphasized the need for increased oversight of AI, cybersecurity, and shared risks. Learn more about this.
In spite of such speedy technological changes that are taking place in the Indian banking industry, there has been a stern message from the regulatory authorities concerning risk management in banks. Reserve Bank of India Deputy Governor R. Gandhi has warned that because of speedy digital expansion in banks, there has been a change in the pattern of risks in finance. RBI Deputy Governor R. Gandhi made this warning during the third global annual conference of the College of Supervisors held in Mumbai.
The Deputy Governor stated that old standards of bank supervision may not be sufficient in the current technology-driven environment. Banks today face new challenges, including platform-based distribution, changes in payment systems, and rapidly evolving invisible threats.
Elaborating on the rapidity with which risks evolve in the digital age, he said that risks now evolve in hours, not weeks. With developments in the digital world, stress also spreads just as quickly. Customer growth, the spread of misinformation, and liquidity crises can escalate in a very short time. This requires strengthening supervisory responses, including early detection and prompt action.
