it more profitable to cater to the requirements of privileged customers, the digital divide should not widen, with more and more digital payment options being designed to serve the requirements of those who already have access to digital, while a large segment of society is left dependent on cash as they are neither aware of the options nor is the infrastructure made accessible at low cost. creating appropriate customer awareness would not only enable the customers to choose their mix of payments taking into account time criticality, security and risk, and the cost involved, but also enable the banks to optimize their payment product mix depending upon their customer profiles. bis central bankers ’ speeches • no technology - based or digital services can be offered without consideration for security of transactions. recently, there have been a spate of frauds ( through vishing and phishing ) in some segments of payment services. banks have a very high level of responsibility when adopting digital channels – to not only ensure security of the channel at infrastructure level, to protect data security and personal privacy at system level but also address the need to build customer awareness in security matters. there is no point creating security for the ideal customer, instead the system should incorporate the possibility of mistakes by the actual customer that we have. rbi has set up an information technology ( it ) subsidiary to support the it requirements of the rbi and the sector. the it subsidiary would focus on it and cyber security ( including related research ) of the financial sector and assist in it systems audit and assessment. • a related matter is the issue concerning customer liability and risk management for electronic payment transactions. the reserve bank will soon be laying down the framework for customer liability in electronic payments. banks have to necessarily build this aspect into their customer education and grievance handling processes. to conclude, we are in the midst of a payments revolution. there is a tremendous opportunity for us to solve some of the critical problems of the financial system such as financial inclusion. however, opportunity also brings responsibility, and i am fully confident that the institutions represented here will rise to the challenge. bis central bankers ’ speeches

raghuram rajan : idrbt banking technology excellence awards – governor ’ s remarks remarks by dr raghuram rajan, governor of the reserve bank of india, at the 12th idrbt ( institute for development and research in banking technology ) banking technology excellence awards function, hyderabad, 18 july 2016. * * * i congratulate all the awardees of the idrbt banking technology excellence awards. idrbt instituted these awards in the year 2001, which reflects the long road traversed by the banking sector in terms of technology adoption. the last few years have seen the convergence of various factors in the payment systems sphere, which makes possible a near - revolutionary improvement in financial access. unless we take concerted steps to address some of the challenges, however, the full potential of the opportunities may not be achieved. i intend to briefly touch upon some of these issues and challenges in my short remarks today. payments systems are the plumbing of the financial system ; so long as there is no leakage or clogging, we are unaware of their functioning. but when they do back up, the situation becomes catastrophic quickly. the reserve bank, as the regulator of payment and settlement systems in the country, develops the necessary regulatory framework, generally through a consultative process, to ensure that different types of payment systems cater to the needs of different segments of society. the aim is to ensure easy accessibility and interoperability of the payment infrastructure, while ensuring safety and security of transactions. we encourage a variety of payment channels not only because they cater to diverse needs but also because they add resilience in case some channel breaks down. banks have been the traditional gateway to payment services. however, with the fast pace of technological changes, this domain is no longer the monopoly of banks. non - bank entities are providing innovative payment products and services, forcing banks to reflect upon their strategy – to compete or to collaborate? banks may not have the wherewithal to compete effectively if they have not been investing in technology and associated personnel. however, if they collaborate without building these capabilities, they may be left with crumbs from the client while their partner takes the whole client cake. from the rbi ’ s perspective, we welcome both competition and collaboration. what we do find concerning is stasis – for instance, the long period when mobile companies and banks were not willing to work together for fear that one would capture the other ’ s clients. the licensing of payment banks has broken that logjam