The RBI is concerned about cyber security since banks are the custodians of public funds, and one must be cautious in whatever they do because everything is vested and rested in technology, shares V. Vaidyanathan, Chief Information Officer, Unity Small Finance Bank with Rashi Aditi Ghosh and Srajan Agarwal of Elets News Network (ENN).
As a CIO, how are you leveraging cloud banking to create new business frontiers?
The Unity Small Finance Bank (USFB) was established a year ago, and the existing PMC Bank was amalgamated with it. Centrum’s MSME and Micro Finance businesses were also merged into Unity Small Finance Bank. There is a high reliance on technology, which serves as the bank’s backbone, and we are actually gaining ground, as the market’s established competitors are far ahead, and the only way to catch up and outperform them is through technology.
To keep our investments steady and obtain the results we desire, the cloud is a critical component of our journey, and most of our solutions are currently hosted on the cloud. Some of these activities are also mandated and guided by the RBI’s guidelines. There are certain grey areas where RBI allows us to make decisions and be cautious about what we store on the cloud and what we don’t. So, while the majority of our strategy is cloud-based, our important core banking components are on a managed services model.
Technologies such as cloud computing, SaaS, etc are quickly developing as commercial drivers. However, these deployments also increase the risk for enterprises as well, so how are you evaluating the risk?
The RBI is concerned about cyber security since banks are the custodians of public funds, and we must be cautious in whatever we do because everything is vested and rests in technology.
We must be extremely cautious when it comes to cybersecurity tools and technology because while placing everything in the cloud is wonderful, there is also a risk of keeping things in the cloud. So, one of the things that RBI states and leaves to your discretion is to keep critical custmer data out of the cloud, and leaves it to us to ensure that anything we maintain on the cloud is not vulnerable to cyber-attacks and that all cyber security technologies are in place.
For every CIO, in any organisation, whether in the banking and financial business or elsewhere, cyber security is critical, and they have to invest heavily in it. We are also mindful of technological advancements and are taking the necessary steps to stay ahead of threats.
What role will blockchain play in the banking business in the future? Are you also experimenting with it?
Blockchain is a big buzzword today, and it is prevalent outside. In India, with some restrictions and guidelines by the RBI, it is in vogue though not fully secure.
In terms of our bank, we are still in the early stages of our technological journey, and we are in the process of implementing new solutions and replacing some of the older solutions that we have in place. Once we have our basic technology in shape and our mantra of being digitally innovative is in place, we will look at blockchain. However, at this moment in time, that is a bridge too far for us.
We will surely consider blockchain when our technology is foolproof and mature enough to compete with the best in the business. So, yes, blockchain is present, and we are keeping an eye on it to see what is going on in the market and to stay up to date with the news.
I think blockchain is still in its infancy, and people are getting into it, but I wouldn’t say it is 100 percent foolproof. We’ll take it as it comes and wait to see how things go from a security standpoint. We’ll definitely look into it in the future.
What new innovations are you planning to implement in the company?
There have been some positive outcomes of demonetisation as well as COVID. People have learned new ways of payment, especially in the Southeast Asian countries, which is at the forefront of digital payment. Today, vendors, even on the outskirts of cities, are willing to accept payment digitally through QR codes.
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Every quarter, there is some new technology, and you come across something that probably gives you an edge over the others and possibly gives you the first mover advantage.
We are putting our technologies in place, and 2023 seems promising because we have a lot of things in place, such as our systems, architecture, road map, and strategy. Once, some of these projects are accomplished, we will look at more methods to digitise the customer experience and make it more appealing for consumers to use a plastic-free payment system. Today, the world is caught up on having a debit or credit card, even though one could make payments using biometrics, face ID, or even a smartphone.
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