Internet and Mobile Banking will be the Big Changes, Going Forward: Naina Lal Kidwai

Anup Varier

Our CIO is on the board of our IT company in India so that he has moral authority to understand what is happening right under his nose. There was a danger, otherwise, of a disconnect between our software team reporting to the U.S. and our India team reporting to Hong Kong.

Externally, the CIO needs to keep an eye on what the competition is doing. I think knowing what the competitive landscape looks like in one's immediate vicinity is very important. He needs to know what technologies are being implemented at say ICICI or HDFC bank, so that we can pick up on that.

It may not be a technology we can implement, but we should make sure we know what's happening and explore every avenue to ensure that we too can. And if we can't, we should have a good reason.

It is also about having a good team. The CIO obviously can't do everything himself. So, it becomes important for him or her to show a commitment to the team.

We also have the added need to have fraud control and security, and this goes beyond what you do in-house. How do you engage with external agencies like the police and know the system and processes necessary to take action once you detect fraudulent activities? The whole chain, therein, needs to be understood as well.

CIO: What is the role of a foreign bank in helping the cause of financial inclusion?

Naina Lal Kidwai: What we are going to see in the spirit of financial inclusion is an ease of opening bank accounts for the financially excluded. This is important as 40-50 percent of Indians still don't have a bank account.

HSBC has leveraged an IT-enabled financial inclusion eCard solution in rural India to help a women's co-operative bank, potato farmers, and even dairy farmers. These are groups that do not have the capability to do Internet banking. The solution enables them to access basic information.

Getting past the entire KYC (know your customer) issue was tough. But the Aadhaar card will help in this regard as the RBI has said it will be accepted as proof of identification. We will be able to simplify the entire KYC process with the electronic model.

The counter-point to this is that banks are also going to be far more security-conscious. The emphasis on security of information will also mean that the customer will have to put in more effort when he fulfills the KYC norms. However, he'll need to do it just once.

At the end of the day, there are multiple ways by which money can move through banks. And banks do not always have the ability to trace the source or check if the person depositing the money has paid his taxes.

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