the need for resilience in the face of disruption : regulatory expectations in the digital world introduction good morning ladies and gentlemen. it is a pleasure to be here at the financial centre summit and i thank finance dublin for inviting me to speak todayi. we have entered a new era in the world of financial services. technology change, as evidenced by the description of a fourth industrial revolutionii, is more than just an enabler for conducting business in a faster, smarter, or cheaper way, for better managing costs, or for gaining better analytical insights. it is a revolution that is completely transforming the playing field for financial services firms. opportunities and risks abound. the competitive landscape is changing, with new entrants, new business models, a race by incumbents to invest in developing the necessary capabilities, and in many cases the potential for a fundamental disruption in the value chain of traditional financial services firms and sectors. moreover, it is becoming ever more evident that data, and the harnessing of it, is the new currency of this new digital ageiii. all this brings more complexity into the system, and complexity brings risk. financial services firms and whole sectors face the challenges of : needing a clear vision for the future in a radically changing world ; having a sufficiently flexible strategy and building the necessary capabilities for thriving in it ; and be able to manage the significant transition risks along the way. and throughout, financial services firms will need to ensure that they are sufficiently focused on their customers, and serving them in a sustainable way. so today, i am going to talk about some of these opportunities and challenges. i will cover : page | 1 the need for resilience in the face of disruption : regulatory expectations in the digital world - the importance of understanding the role technology plays in value chains and the implications should something go wrong ; - the need to get the basics right when it comes to it ; - the criticality of taking a data - centric view to understand key assets, and thus how to protect them ; and - the responsibilities of the senior management and boards of financial services firms to own these critical risks and to build resilience in their firms to be able to withstand, absorb, and recover from technology - related risks. in covering the above, i will also summarise how the central bank is continuing to evolve its approach to regulation and supervision in the context of technological change. the implications of the digitalisation of financial services “ artificial intelligence and exponential increases in computing power are forcing

agriculture sector from the crisis. finally, over the years, india has built an extensive network of social safety - net programmes, including the flagship rural employment guarantee programme, which should protect the poor and the returning migrant workers from the extreme impact of the global crisis. rbi's policy stance going forward, the reserve bank's policy stance will continue to be to maintain comfortable rupee and forex liquidity positions. there are indications that pressures on mutual funds have eased and that nbfcs too are making the necessary adjustments to balance their assets and liabilities. despite the contraction in export demand, we will be able to manage our balance of payments. it is the reserve bank's expectation that commercial banks will take the signal from the policy rates reduction to adjust their deposit and lending rates in order to keep credit flowing to productive sectors. in particular, the special refinance windows opened by the reserve bank for the msme ( micro, small and medium enterprises ) sector, housing sector and export sector should see credit flowing to these sectors. also the spv set up for extending assistance to nbfcs should enable nbfc lending to pick up steam once again. the government's fiscal stimulus should be able to supplement these efforts from both supply and demand sides. when the turn around comes over the last five years, india clocked an unprecedented nine per cent growth, driven largely by domestic consumption and investment even as the share of net exports has been rising. this was no accident or happenstance. true, the benign global environment, easy liquidity and low interest rates helped, but at the heart of india's growth were a growing entrepreneurial spirit, rise in productivity and increasing savings. these fundamental strengths continue to be in place. nevertheless, the global crisis will dent india's growth trajectory as investments and exports slow. clearly, there is a period of painful adjustment ahead of us. however, once the global economy begins to recover, india's turn around will be sharper and swifter, backed by our strong fundamentals and the untapped growth potential. meanwhile, the challenge for the government and the rbi is to manage the adjustment with as little pain as possible.