Reserve Bank Of India (RBI), stated in a latest update that digitalisation in finance is paving the way for next-generation banking; improving access to financial services at affordable costs; and enhancing the impact of direct benefit transfers by effective targeting of beneficiaries in a cost-efficient manner. Loans in the retail segment are being enabled by online payments and innovative credit assessment models with instant disbursements. E-commerce is being boosted through embedded finance. All these innovations are making financial markets more efficient and integrated.
On the external front, digitalisation is driving growth in India's services exports and lowering remittance costs. India's digital journey is setting a benchmark for peer economies. The Reserve Bank's initiatives for internationalisation of home-grown payment modes, cross-border fast payment network linkages and knowledge and experience sharing with peers is energising the transformation of its digital public infrastructure as a global public good.
RBI further cautioned that digitalisation also presents challenges related to cybersecurity, data privacy, data bias,vendor and third-party risks, and customer protection. Increased inter-connectedness may lead to systemic risks. Additionally, emerging technologies can introduce complex products and business models with risks that users may not fully understand, including the proliferation of fraudulent apps and mis-selling through dark patterns. Digitalisation may induce human resource challenges in the financial sector, necessitating strategic investments in upskilling and reskilling.
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