2 reasons why RBI Governor Raghuram Rajan wants banks to use IT

MUMBAI, INDIA: While the benefits of IT are numerous, and the BFSI segment has been at the forefront of technology adoption, lack of automation and centralization even in large banks tell a different story.

RBI Governor Raghuram Rajan admits there is a gap between technology deployed by banks, and its actual usage to service customers.

At a recent event, he outlined two critical uses of information technology and how banks can benefit from those.

Keep tab on social media habits of consumers: Emphasizing the need of social media in the changing environs, RBI Governor Raghuram Rajan called upon the banks keep a tab on the social media habits of consumers to keep themselves updated about their needs and demands.

He said, “There is tremendous information about the customer that is made available through their social media habits and also various kinds of products being used by them. This can be used to formulate better strategies and products in terms of what the customer is likely to use or want and essentially to serve their need.”

Reduce cost: Admitting that the use of IT in the Indian banking is low, Rajan encouraged the bankers to use new technologies to not only reduce costs but also improve efficiency and increase productivity.

“IT and IT usage has not completely penetrated into the banks. The banks are not fully automated and still take lot of time to cull out basic information about loans details etc,” Rajan lamented.

“As a result, the cost structure in the banking system is still significantly high. Why is the RoI on IT in banking not yielding results? We should use more and more technology to bring down the cost faster,” he said.