ecosystem of angel and venture funding, incubators and accelerators – as well as new patterns of consumption in society. a word of unsolicited advice to these young entrepreneurs and start - ups : they should constantly evaluate the build - up of risks and vulnerabilities in their businesses. i recognise that many of them may already be doing it and risk taking is a part of their business model, but nonetheless these are things which should always be kept at the back of one ’ s mind for long term sustainability of any business. 17. now we are in a situation where it has become imperative even for well - established firms to adopt technology solutions if they wish to remain competitive. the advent of new technologies is fundamentally changing all aspects of business. decision making is increasingly supported by insights from data analytics, artificial intelligence and deep learning. now there is almost a real - time assessment of customer needs, innovations and market trends that is helping manufacturers to manage production capacities, save costs, reduce risks and meet evolving customer needs more quickly. we are in the age of data - driven smart manufacturing. if indian businesses aspire to remain competitive and attain world - class status, it is important that they gear up to make the right investments sooner than later. i believe the pandemic - induced changes in strategy, management, operations and priorities are going to stay. therefore, the success of indian entrepreneurs will depend on how quickly and efficiently they are able to make necessary adjustments in their business models. corporate governance, ethics, accounting transparency and business models corporate governance 18. i would now like to draw your attention to the single most important aspect that determines the long - term success of a business and that is corporate governance. the thrust of sound corporate governance is to help build an environment of trust, transparency and accountability in business entities. these are prerequisites for fostering long - term investment, business stability and integrity. it is important to remember that trust is the most valuable asset of a business ; and good governance aims to protect and preserve that trust in the organisation. good governance entails effective and collective oversight by the board and senior management of a company. this would also include control layers of risk management and internal audit. these need to be based on a proper risk appetite with the purpose of inculcating appropriate risk culture. ethical conduct, accounting transparency and appropriate business models are various components of the broader governance framework. organisational culture can exert substantial influence on both ethical conduct and transparency practices. ethical

with the bank. it is, therefore, crucial that while driving various tech - enabled initiatives, the existing systems and processes do not see frequent disruptions and non - availability. we have already seen instances of the damage that disruptions in technology systems can bring and the reputation risk they carry for financial entities. a casual approach to handling technology issues even as basic as wrongful deletion of a single system file or inadequate care in patch updating often lead to financial and operational losses. 10. the it systems and platforms are also exposed to obsolescence and require frequent upgradation. this calls for adequate investment in it infrastructure by all financial sector entities. this is one of the important focus areas of rbi ’ s supervision of its regulated entities, especially the banks and the nbfcs. 11. it has also to be recognised that human resource can turn out to be the weakest link in technology enabled financial services. there is thus a vital need for ongoing training and skill building programmes. 12. at end of the day, the bottomline is how technology improves the financial system in terms of efficiency, effectiveness, resolving bottlenecks in economic functions and provide value addition to the customers. collaboration between finance and technology firms 13. large technology companies ( bigtech ) which have entered into provision of financial services could potentially be another source of disruption to the financial system. as you would be aware, such companies, whether from e - commerce, social media and search engine platforms, ride hailing and similar businesses have started to offer financial services in a big way on their own or on behalf of others. these companies have an enormous amount of customer data which has helped them to offer tailored financial services to entities and individuals lacking credit history or collateral. even the banks and other lenders are sometimes utilising platforms provided by fintech companies in their internal processes for credit risk assessment. such large scale use of new methodologies in credit risk assessment can create systemic concerns like over - leverage, inadequate credit assessment, etc. authorities and regulators have to strike a fine balance between enabling innovation and preventing systemic risks. 14. the big techs also pose concerns related to competition, data protection, data sharing and operational resilience of critical services in situations where banks and nbfcs utilise the services of big tech companies. these concerns can also materialise in sectors other than financial services. the provision of financial services through the digital channel, including lending through online platforms and mobile apps, have brought in issues