Banks should piggyback on the mobile telephony platform to provide banking services to rural households, said Dr C. Rangarajan, Chairman, Prime Minister's Economic Advisory Council.
Delivering the Foundation Day lecture on role of technology in development of banking at the Institute for Development and Research in Banking Technology (IDRBT) here on Monday, he said over 700 million mobile connections could be used for authentication and conducting banking transactions.
Huge potential
Mobile banking has huge potential and the stakeholders need to collaborate much more proactively for common benefit.
Saying that technology provides the scope for affordable financial inclusion, Dr Rangarajan said: “The best way offered for inclusive banking would be through the twin-routes of mobile banking and the banking correspondent model.”
The technology should also be harnessed to increase electronic transactions as against paper-based clearing.
Banks should develop in-house IT skills and broaden the IT management to achieve consolidation and minimise costs, he said.
To ensure continuity of services and safety of data in times of unexpected crises, banks should put an adequate business continuity plan for technology-related matters, Dr Rangarajan said.
Mr Anand Sinha, Deputy Governor, Reserve Bank of India, and Chairman of IDRBT, said the institute was focussing on applied research and use of analytics and customer-relationship management in banking.
Centre of excellence
“IDRBT can function as a centre of excellence in developing cost-effective technology for banking and look for collaborative research projects,” Mr Sinha said.
The emerging technology such as cloud computing could be used by a group of smaller banks to reduce costs, he said.
Mr B. Sambamurthy, Director of the Institute, said collaborative research with reputed institutes such as University of Hyderabad was one of the focus areas.
IDRBT, which is celebrating its 15{+t}{+h} anniversary, had developed many technology- based applications for banks, including the national financial switch, structured financial messaging system for communication between banks.