Former deputy governor of Reserve Bank of India (RBI) S S Mundra on Friday said that partnership between banks and fintech companies is a win-win proposition.
Speaking at the foundation day lecture of private lender Bandhan Bank, Mundra said that data security and privacy is important and thus no core activity should be outsourced. "Partnership between banks and fintechs is a good and win-win proposition.
Given the importance of data security and privacy, no core activity should be outsourced. The relation is akin to that of the crocodile and the plover bird", he said.
The large animal and the small bird share a mutually beneficial relationship. The plover picks tiny bits of meat from between the crocodile's teeth. The reptile needs the bird to keep its mouth free from infection, while the plover requires the crocodile to get its food.
Mundra said regarding innovation and inclusion, an integrated network to harness data is a challenge to the bankers.
With banks now operating 24/7 due to digitisation, Mundra urged that risk management be seen as more than just a compliance necessity. He added that the RBI has been warning banks about the systemic risks posed by digitisation.
On digital currency, Mundra expressed scepticism, stating that he was "not very optimistic" about its widespread adoption.
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