, is audit, it operations, it services outsourcing, cyber fraud, business continuity planning, customer awareness programmes and legal aspects. the guidelines, since issued by the rbi, clearly underlined that implementation of these recommendations needed to be risk based and commensurate bis central bankers ’ speeches with the nature and scope of activities engaged into by individual banks as well as the level of dependence of the business processes on technology. board level committees in the banks had been mandated to monitor the implementation of these guidelines in their respective banks. while substantial progress has been made in the past few years, i believe that banks still have to travel a lot of distance before the requirements are fully met. given the centrality of technology in the functioning of banks today, this can no longer be treated as mere matter for compliance but has to be viewed as a core business issue. supervisory concerns 9. with computerisation of various activities within a bank, as a regulator and supervisor, we have come to expect much higher capability from banks in generation of relevant management information for decision making purposes. however, one feels that there is a substantial gap between the promise and the delivery. let me highlight a few specific areas. 10. one of the primary areas of concern for the financial world is to ensure that the banking system is not abused by the unscrupulous elements for money laundering purposes. regulations on know your customer / anti - money laundering are robust across jurisdictions. however, we often find banks not having robust systems to comply with the regulations. at the time of on - boarding of the customers, banks are required to assess their customers, their business and expected turnover in their account, source of such transactions etc. in recent times, we have come across several instances of banks having allowed transactions in their customers ’ accounts without any due consideration to their declared business profiles. the accounts received multiple rtgs / neft inward transactions and several such remittances were sent out of these accounts as well. several accounts were abused to send money abroad in the form of advance import remittances. despite the disproportionate activity in such accounts, the monitoring mechanism of banks fell short of our expectations. i wonder why banks are not able to devise fool proof technology - based solutions to identify such transgressions. as you may be aware, rbi had to impose penalties on 13 banks for non - compliance with extant kyc / aml instructions including failure to categorise their customers in line with their

. currently, these institutions provide the platform for running missioncritical and secured payment system applications like rtgs, secured financial messaging system, negotiated dealing settlement system etc. 4. information technology act enacted in the year 2000 gave a further fillip to conducting of transactions in a computerised environment by providing a legal underpinning. internet penetration gradually increased which led to increasing use of internet as a channel for delivery of banking products and services. the exponential growth of mobile phone users in the country also fast - tracked their usages as a delivery channel. the latest in the long line of innovations in the banking technology space is unified payment interface ( upi ), which has pushed the boundaries on remittances. to cut a long story short, technology adoption has increased manifold and today no bank can survive without robust technology, customer friendly digital products, hassle free user experience and continuous innovation. bis central bankers ’ speeches fintech revolution 5. with the advent of fintech related innovations across the globe, well established banks are challenged once again. today most of the banking needs can be managed through the mobile. card based payments also have matured with the advent of pre - paid cards, tap and go, virtual card, multi - currency card, qr code based payments, etc. technology has moved from being an enabler and differentiator to being an ultimate necessity and a way of life. by the end of this year, a handful of payment banks would have commenced their operations in india, stretching the banks on technology front. some technological advancement that are gradually making a foray into financial sector include big data, artificial intelligence, block chain technology and internet of things. let me mention a few examples. 6. banco santander has expressed its intention to provide secure transactions using voice recognition via its banking app. rbs has trialled “ luvo ”, an ai customer service assistance to interact with staff and to potentially serve customers in near future. japan ’ s softbank, in collaboration with paris - based robotics experts, aldebaran has developed pepper, the world ’ s first humanoid robot. pepper is already being used in customer services industries as a replacement to an information booth or the welcome desk. mizuho financial group inc. bank has reportedly introduced pepper to its flagship branch in tokyo in 2015 to deal with customer enquiries, while mitsubishi ufj financial group has tested “ nao ”, a humanoid robot to interact with customers. taking cue from their japanese counterparts,