The finance ministry has asked state-controlled banks to consider using emerging technologies such as account aggregators and generative artificial intelligence (AI) to improve their operational efficiency and customer experience.
Leverage technology
In a meeting chaired by Union Finance Minister Nirmala Sitharaman to review the performance of public sector banks (PSBs), banks were told to use technology to provide enhanced services and to cut costs.
“Process automation happens across every digital back office, automation of branch facing roles etc,” a senior finance ministry official said.
Collaboration among lenders
They also said that PSBs are spending money separately for technology upgrades in artificial intelligence and machine learning, which is adding to costs.
Thereby the ministry has also encouraged collaboration among lenders to cut costs as there is a need for shared infrastructure on cyber security areas and protection of customers’ personal information.
Outsourced work
The government cautioned state-run banks on customer data protection while outsourcing critical services, including technical services.
In April, the RBI issued its final guidelines for outsourcing information technology in the financial sector.
It said that even after contracting out any work, their responsibility would not shrink and that they would be ultimately responsible for outsourced work.
Performance review
All the major financial parameters viz., credit deployment, profitability, asset quality, capital adequacy, etc indicate a significant improvement in performance of PSBs.
The meeting has also noted that they are adequately capitalised, resilient, and have sound financial health.
Bankers during the meeting assured the Finance Minister that with strong financial health, they are comfortably placed to withstand any macroeconomic shock.
