need for providing timely and seamless credit to agriculture and msme sectors. while the rbi is engaged in encouraging initiatives in areas such as msme lending through its regulatory sandbox, other stakeholders such as banks and fintech companies are also collaborating to provide digital credit delivery mechanism in cost - effective and hassle - free manner. increased use of social media and information mediums 19. social media is an alternative platform for reaching millions of customers. indians, on average, spend about 2. 4 hours daily on social media 1. further, the number of social media users has been growing steadily. the analysis of social media use has the potential to help banks in reviewing their strategies in terms of customer segmentation, customer acquisition and furthering financial inclusion plans. social media can also be used in customer grievance redress management. 1 global web index ’ s social media trends 2019 report cybersecurity 20. with advancement in digital banking, cybersecurity will remain an important challenge for all stakeholders. the increasing use of it systems by banks, remote working arrangements, accelerated adoption of digital banking services by customers, along with increasing dependence on third parties for various services would warrant enhanced resilience capabilities to ensure business continuity. this would include building strong defences against cyber - attacks and malicious attempts at disrupting, disabling or destroying a computing infrastructure or stealing confidential information and data. banks would need to undertake constant upskilling of personnel. continuous knowledge acquisition and staying ahead of the curve would become even more crucial. comprehensive and strategic approach to climate - related risks 21. climate - related risks will be a focus area in times to come. such risks will impact the business models of banks. the increased requirements of funding businesses and industry for tackling climate change would be greatly influenced by the global move on climate related risk management. various stakeholders already consider environmental, social and governance ( esg ) as an important aspect while making investment decisions. banks are also increasingly aligning their businesses, including assessment of financing assets, with the global climate sustainability agenda. the need for banks would be to develop appropriate business strategies and strengthen the governance framework to gauge the associated risks. in line with international best practices, a forward - looking, comprehensive and strategic approach would be required to address climate risks. concluding observations 22. going ahead, the world of banking is expected to be more collaborative as well as competitive, with newer players offering innovative financial products. banks need to prepare themselves for facing the dynamic environment, while keeping their

option value of waiting before incurring the sunk cost of investment projects. for information, see a. k. dixit and r. s. pindyck, investment under uncertainty ( princeton : princeton university press, 1994 ). 4 another factor that can amplify volatility in business investment over the cycle is the financial - accelerator effect. the balance sheets of firms improve when they experience rising sales and profits, which in turn gives them easier access to financing, and under better terms, thereby leading to more investment. see b. bernanke, m. gertler and s. gilchrist, “ the financial accelerator in a quantitative business cycle framework, ” in handbook of macroeconomics, volume 1, eds. john taylor and michael woodford ( elsevier, 1999 ). 5 faster labour force growth will also lower wages relative to the cost of capital, which will cause firms at the margin to substitute labour for capital, partially offsetting the positive impact on investment demand from the increase in the labour force. 6 see s. s. poloz, “ from hewers of wood to hewers of code : canada ’ s expanding service economy ” ( speech to the c. d. howe institute, toronto, ontario, 28 november 2016 ). 7 w. dong, j. fudurich and l. suchanek, “ the digital economy — insight from a special survey with it service exporters, ” bank of canada staff discussion paper no. 2016 – 21 ( november 2016 ). 8 international monetary fund, world economic outlook : uneven growth — short - and long - term factors ( washington, april 2015 ). 9 see l. patterson, “ adjusting to the fall in commodity prices : one step at a time ” ( speech to the edmonton chamber of commerce, edmonton, alberta, 30 march 2016 ). 10 while canadian exports have grown by about 4 per cent per year since the great recession of 2008 – 09, that growth rate is well below the rate of recovery for exports in the wake of previous recessions. for example, exports grew nearly 8 per cent per year over a similar length of time during the recoveries from the recessions of 1981 – 82 and 1990 – 91. see l. schembri, “ wood, wheat, wheels and the web : historical pivots and future prospects for canadian exports ” ( speech to the atlantic institute for market studies, halifax, nova scotia, 8 november 2016 ). 11 for the