Banks must collaborate, not compete on technology front: RBI DG Rabi Sankar

There is a need to elevate initiatives and technology to a higher level by fostering collaboration across the banking sector, said Reserve Bank of India (RBI) Deputy Governor (DG) T Rabi Sankar on Friday. Speaking at Indian Banks' Association's (IBA's) 20th Annual Banking Technology Conference, Expo and Citations, he stated that this collaboration should not be competitive but rather a collective effort to ensure the sector is prepared for any technological challenges. The RBI DG emphasised the importance of a balanced, structured arrangement where both the central bank and the banking system can easily exchange help and suggestions to adapt to new technologies.

 

“The initiatives like this, the technology, sort of upgrade this to a slightly higher level, where we involve—it need not necessarily be a competition, but collaboration is what is most important. All of us must collaborate to ensure that we, as a sector, are ready to face whatever challenge technology brings us," he said.

 

“Whatever help you require from RBI, whatever suggestions you require from RBI, and vice versa—whatever help and suggestions RBI requires from the banking system—can easily be done if we have a balanced, structured arrangement for this. We can put it back,” Sankar added.

 

He further stated that as technology, especially artificial intelligence (AI), rapidly advances, the banking sector must adapt. He highlighted the importance of fostering an innovative mindset among banking staff, who typically are not involved in product creation.

 

Sankar further mentioned that banks should implement and innovate with new technologies like Central Bank Digital Currencies (CBDCs) and the Unified Lending Interface (ULI). These initiatives, he suggested, can revolutionise finance by enabling faster, more efficient transactions. However, he also noted that for these innovations to succeed, the industry must work together, overcome challenges related to AI and data usage, and set up frameworks for quicker decision-making and action.

 

He also emphasised the need to prepare for future technologies like quantum computing and urged the banking sector to act proactively.