many innovations, such as, special bank accounts or pre - paid accounts, use of bcs, use of technology for initiating and authenticating transaction, etc. at the same time, it is important to realize that innovations have taken place and have been successful due to initiatives of all the stakeholders, partnerships of banks and non - banks and creation of an enabling business environment by the regulator and in the process have opened up new avenues for tapping the unreached markets. international approach some of the international experiences in this regard are worth mentioning to draw useful lessons that can be implemented in our country in the existing policy environment for financial inclusion. countries like china, brazil, south africa, mexico, kenya and philippines have implemented various technology - based financial inclusion programmes and their success stories have been replicated in various countries albeit with modifications based on local needs. internationally, there are different approaches towards delivery of payment services to the unbanked and under - banked customers using innovative methods. for example, the bc model with traditional pos devices and cards is used in brazil and china. the mobile based payments are extensively used in kenya, south africa, philippines and mexico. a few countries like the usa and china use pre - paid payment cards as an instrument to provide payment and banking services to the unbanked population. broadly there are three models : ( i ) bank - led model ( e. g. brazil / south africa ), ( ii ) non - bank led model ( e. g. kenya ), and ( iii ) hybrid model ( e. g. philippines ). these models have evolved taking into account the factors like banking penetration in a country, levels of literacy, availability of necessary eco - system, etc. in the context of technology - enabled financial inclusion the success stories of brazil, kenya and philippines are often quoted. let me briefly mention about their business models. brazilian banking correspondent model brazil adopted a “ correspondent ” banking model to expand the reach of banking services to its remote areas. the success of this model can be gauged by the fact that while there were 63, 509 agents in 2000, their number had grown to 132, 757 by january 2010. this enabled the spread of banking and financial services to even the far - flung areas of brazil. the pos devices with cards are used for providing a wide range of services from deposit taking, money transfers, opening accounts, bill payments, verifying and forwarding documentation to provide credit, etc. this wide network has also

swaminathan j : the board's role in navigating transformation special address by mr swaminathan j, deputy governor of the reserve bank of india, at the conference of directors of private sector banks, mumbai, 18 november 2024. * * * respected governor, reserve bank of india, deputy governor shri m rajeshwar rao, chairmen, md ceos, whole time directors and distinguished members of the board of private sector banks, colleagues from rbi, ladies, and gentlemen. a very good morning to all of you. it is indeed an honour to speak before you today. conferences such as these provide an invaluable platform for supervisors and banks to understand each other's perspectives. we are navigating a new reality that is redefining the dynamics of the industry. the banking industry has witnessed several technology transformations in the past, however, the current transformation is unprecedented in its pace and scale, driven by advanced technologies like artificial intelligence and cloud computing. unlike past shifts, which focused on digitizing existing processes and operational efficiency, today's transformation places the customer experience at the centre - offering instant, personalized services, not just at the branches, but through mobile apps and digital platforms. this transformation, while promising and most welcome, brings significant risks for banks. increased digital transactions expose banks to greater liquidity risks and cybersecurity threats, while the integration of new technologies heightens operational risks. growing reliance on third - party providers adds dependency risks, and expanding customer data collection demands stricter data privacy controls. further, these rapid technological advancements require frequent updates coupled with the need for specialized talent. at the same time, customers'expectations have grown ; they demand seamless service with minimal downtime. moreover, today's customers are increasingly financially savvy, often willing to take some risk and experiment alternate avenues of investment as opposed to confining themselves to traditional bank deposits. this is where the role of the board of directors becomes essential. your leadership and governance are central to navigating these changes. in my speech today, i would like to discuss what it means to be part of a sound, transformative board - one that can harness change effectively, address risks strategically, and reinforce resilience across the organization. today i would like to touch upon seven aspects which i feel the boards should keep in mind. 1. fostering innovation in today's world, it is essential for banks to be innovative, and that goes