Reserve Bank Governor Shaktikanta Das on Friday said that with the advent of artificial intelligence (AI), cybersecurity challenges can rise manifold, and called upon financial institutions to dedicate substantial efforts to protect customer information.
Regulated entities serve as repositories of data on financial transactions, customer interactions, and operational activities, the governor said in his inaugural address at the Annual Conference of RBI Ombudsman here. “Within this extensive repository lies a unique opportunity to enhance customer service through robust data analysis,” he said.
By harnessing the power of data analytics, Das said regulated entities can proactively anticipate customer needs, address issues promptly, and streamline processes. A data- driven approach would not only optimize operational efficiency but also reinforce the commitment to providing exemplary customer service.
He noted that with the rise in fraudulent transactions, it is critical to strengthen monitoring systems and use technology to detect potential frauds before they materialize.
“Maintaining a focus on root cause analysis of consumer grievances can result in preventing such complaints from coming up repeatedly. With the advent of Al, cybersecurity challenges can rise manifold,” he said.
Cybersecurity challenges can expose consumers to identity theft, fraud, and unauthorized access to personal information, which can affect consumer trust.
“Financial Institutions must dedicate substantial efforts to protect customer information and ensure that vulnerabilities exposing customers to risk are promptly identified and addressed,” the governor said.
Fragmentation and inefficiency in grievance redressal mechanisms can hinder the timely resolution of consumer complaints, he said, adding that multiple layers and lengthy resolution processes should, therefore, be avoided.
The Reserve Bank-Integrated Ombudsman Scheme (RB-IOS, 2021) has brought in several structural changes in the operations of the Ombudsman scheme. Under the RB- IOS scheme, 2.34 lakh grievances were received during the first full year of its operation (2022-23), followed by 2.68 lakh grievances in the current financial year (2023-24) so far.
The disposal rate in both years has been about 98 percent. The average turnaround time for closure across all categories of complaints has come down to 33 days for 2022-23 from 57 days prior to the introduction of the new scheme.
“Our analysis of the grievances received at the offices of the RBI ombudsman reveals certain gaps in the systems and procedures in the regulated entities. We have brought such deficiencies to the notice of the individual banks and NBFCs. Our effort is to work with the regulated entities and rectify such deficiencies,” Das said.
He stated that while the Offices of Ombudsman need to intensify data analytics and use of technology for streamlining the internal processes, the adoption of a similar approach by the regulated entities is crucial for upholding public trust.
There is also a need for further strengthening the internal grievance redress systems, including the internal ombudsman framework in the regulated entities, the governor said.
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