Microfinance institutions (MFIs) must be mindful of data privacy and cyber security because they handle a lot of client data, according to State Bank of India (SBI) managing director Alok Kumar Choudhary.
Speaking at a conference hosted by Sa-Dhan, he stated that MFIs had to concentrate on developing their competence in order to meet future problems.
Integrating new regulations with existing ones is crucial, especially in cases where data privacy laws are in place. Because of the massive volume of data that all MFIs manage, he stated, “This specific aspect (data privacy) requires attention and some sort of action plan needs to be in place.”
He stated that financial institutions should concentrate on enhancing the simplicity of transactions via digital channels, noting that consumers’ needs in this dynamic era must be met to the best of their comfort.
“For this segment of (bottom of the pyramid) customers, we need to understand what they want and ease with which their desire can be fulfilled,” he stated.
SBI offers NBFCs and MFIs who are attempting to promote financial inclusion a sizable lending line.
Speaking on SBI’s involvement in the government’s effort to promote financial inclusion, Choudhary stated that 36% of all accounts opened under the PM Jan Dhan Yojana have been opened by the bank alone.
In the past nine years, the PM Jan Dhan Yojana has opened over 50 crore bank accounts, with deposits growing to nearly Rs 2.03 lakh crore.
Regarding the Atal Pension Yojana, he stated that 32% of all subscribers had been enrolled by SBI under the program.
SIDBI Chairman and Managing Director S Ramann warned MFIs not to become too comfortable with their clientele because there is a lot of digital disruption going on.
According to him, if the financial industry does not evolve with the times, new firms may enter the market and drive out established ones.