In a meeting, headed by Finance Minister Nirmala Sitharaman to assess the activities and performance of public sector banks (PSBs), utilization of account aggregators and generative artificial intelligence for banking operations was taken into consideration in order to correspond with the innovative technological advancements.
The finance minister further highlighted the significance of PSBs into exploring partnerships in human resource training and utilizing technology to provide a cost efficient service to customers. These resources and knowledge will ultimately provide enhancement in the PSBs’ operational capability and a better experience to their customers.
What are These Technologies?
Account Aggregators provide consented sharing of financial data within and between financial institutions once the customers have approved. This enables a consolidated overview of a person's financial data from many accounts and organizations.
Generative Artificial Intelligence is the AI system that can be used to generate content, like text, images or applications, based on training data. Its ability to automate a number of processes and tasks, improves its efficiency and productivity.
Adopting these emerging technologies will streamline the bank’s operations, cut off the costs, and provide a better customer experience. The instruction from the finance ministry emphasizes the government's dedication to using technology in the banking sector and improve overall performance and customer satisfaction.
Security Approach
The government has also issued a cautionary state to the state-controlled banks over the protection of customer data when contracting out essential services, notably technological services. In order to reduce costs and improve security, the statement demonstrates the value of protecting personal information and the necessity of lender cooperation.
While the state-run banks are inclined into investing in technological upgrades like AI and machine learning, this is eventually leading to higher expenses. To evade the issue, the government has asked banks to work collaboratively in sharing information in areas like ‘cybersecurity,’ thus aiding in reducing cost.
Banks can work on collaborating and adopting effective cybersecurity measures and secure the personal information of their clients by pooling resources and sharing infrastructure. This cooperative strategy can reduce the dangers of data breaches and improve the state-run institutions' overall security posture.
The government's warning indicated a rising understanding of the significance of cybersecurity and data protection in the financial industry. It emphasizes the necessity for banks to exercise caution when contracting out technical services, making sure that sufficient safeguards are put in place to protect customer data throughout the entire process.