In past few years, India’s banking system has undergone
enormous changes. Banks have embraced the benefits of digital revolution and
are harnessing it to improve service delivery. This has benefited not just
consumer and banks but even the government has put its hopes on spread of digital
banking to realize the dream of Digital India.
Economic
survey highlighted importance of JAM trinity (Jan Dhan, Aadhaar, Mobile) for better
targeting of subsidies and thereby improve governance. The Jan Dhan
component is moving swiftly with the
growing number of bank accounts. Aadhaar is also fast becoming ubiquitous in
India. Mobile revolution has put mobile in hands of common man. However JAM
benefit can be harnessed only when mobile banking is utilised by public. This
will enable payments and transfers via mobile .It will reduce time and
opportunity cost of daily wage earners. For others, it makes transactions
convenient and hassle free.
Mobile
banking has spread fast thanks to innovations and supportive regulations. Today
there are numerous companies coming out with apps to enable payments and transfers
of various kinds. Reserve Bank of India has given in principle approval for
setting up of payment banks. This will further penetrate use of digital medium
for transactions. All these paint a rosy picture. Some analysts were so excited
by these developments that they started dreaming of a cashless Indian economy.
The
dream shattered with revelation of a large scale data theft from several
Indians banks in 2016. The incident revealed the loopholes in India’s cyber
security regime. Even as more and more Indians are logging on to the cyber
world. India has been slow in coming up with security measures to protect its citizens
and property. We have seen cyber attacks on various institutions of government.
But the recent incident in financial domain is a cause for grave concern.
India’s
growth has been propelled by IT boom. Much of activity in future would be
dependent on cyber world. Hence it is imperative that we buck up and strengthen
cyber security. India is blessed with surplus engineers by fate or design.
Indian government should tap these enormous pool of talent to create a cyber army
not just to defend but also to unleash cyber attacks. Deterrence is best form
of defence.
The
recent attack reveals the threat to financial sector. Financial sector
regulators and participants need to heighten their vigil in cyber world.
Digital banking which is still in nascent stage in India can grow only with
trust of people. The recent incident has created a trust deficit among public. There
has been a decline in online and debit/credit card transactions and a increased
demand for currency. This is a setback to digital banking. Banks need to act
fast to secure their networks and assure their customers of the safety of their
systems. Regulators need to give equal priority to cyber audit as other audits.
RBI’s move to setup a IT division is a step in right direction.
Cyber
criminals are evolving new and advanced methods to perpetrate their crimes. To
keep these in check, we need to invest in cyber surveillance and research. Our
investigative agencies need to be equipped with skills to undertake
investigations in cyber world. Laws need to be strengthened in cyber world to
instill fear among those who have evil designs in their mind.
The
economic survey called for spread of JAM to alleviate people’s problems. Before
spreading JAM it is important to protect it from attacks of ants, only then can
we really enjoy the taste of JAM.
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