cash. more than 17, 600 retailers have signed up as m - pesa agents – far outnumbering kenya ’ s 840 bank branches. by march 2012, within five years, over 15 million people of kenya ’ s had used it – this means rural villagers haggling over produce, then using their nokias to make the final deal. it means masai herdsmen bringing their phones to market along with their cattle, ready to stock up on essentials to bring back to their homes. such a system also requires intermediaries, to get the cash to m - pesa agents, and ensure cash movement keeps up with e - float exchanges. in this way, the system has created new jobs, with some intermediaries and retailers earning $ 1000 a month in commission from m - pesa transactions. no wonder, the model has been sought to be replicated in other countries. however, replication of success in kenya remained elusive in other countries like tanzania and south africa. the success of m - pesa can be attributed to several factors viz. the absence of banking facility, presence of a single dominant operator, absence of a cost effective remittance channel and existence of national identity. needless to say, there is no one - size - fit - all technology for all situations. the innovation will have to adapt itself to the needs and endowments of each society. 15. let me now turn to the last issue i wish to touch upon today – it governance. the business processes in the banks and other financial sector entities are increasingly dependent on information and communication and communication technology. it is therefore imperative to create an appropriate governance framework not only to protect the interests of the bank itself, but also to address the concerns of all stakeholders including regulators and the customers, who are outside the organization and create a conducive atmosphere of confidence in the system. briefly an it governance framework should be built around the following considerations : bis central bankers ’ speeches a. the strategy for adoption and implementation of it has to be aligned with the business strategy of the bank. the use of it resources should be aimed at delivering value to the stakeholders. b. there has to be a comprehensive framework for management of risk emanating from use of it. this is a very broad area and includes a host of issues including i. redundancies and business continuity ii. information security iii. audit of financial transactions in an it enabled system. 16. though the scope for use of complex financial products

high roller ” 3 mcafee and guardian analytics have indicated a cyber fraud with objective to siphon large amounts from high balance accounts. the white paper states that the criminals have attempted at least €60 million ( us $ 78 million ) in fraudulent transfers from accounts at 60 or more financial institutions ( fis ). if all of the attempted fraud campaigns were successful as the total attempted fraud could be as high as €2 billion. similarly, internal frauds have also assumed paramount importance. an article published in aba banking journal4 has indicated various types of internal frauds viz. general ledger frauds, identity theft, account takeover and collusion with outsiders. the article also mentions about a high - level bank employee being indicted for allegedly transferring more than $ 4 million from general ledger accounts to her own accounts over a period of eight years and concealing the money in the general ledger. 10. the point that i have been trying to make so far is that advancement in information and communication technology has opened vistas in financial sector that could not be imagined a few decades back. yet, it cannot perhaps be said that all the ways in which we have harnessed the technology has contributed to social utility or made the financial sector more robust and useful. 11. now let us turn to some of the beneficial aspects of techno - banking in the indian context. there are three perspectives to this issue – that of profitability, which concerns the owners, that of service, which concerns the customers and lastly, that of regulatory and statutory compliance, which concerns the regulators. i have discussed this issue in the indian context at great length recently and i do not want to repeat the same in detail. briefly, the technology adoption has surely added to the profitability for the banking sector now supports a much larger asset without any increase in manpower. the ease of capture, storage, portability, and retrieval of information has enabled, at least potentially, a much better compliance regime. with expansive atm network and wide implementation of core banking solution, we seem to have but in place the basic paradigm of techno - banking for the customer. however, you would agree with me that we are yet to achieve an optimal level of efficiency in all three aspects and there is a lot to be done in that regard. http : / / www. mcafee. com / us / resources / reports / rp - operation - high - roller. pdf “ 4 internal frauds and how to spot them ” – the article was posted on the website