State Bank of India (SBI) Managing Director Alok Kumar Choudhary on Wednesday said that there is a need for microfinance institutions (MFIs) to be aware of data protection and cyber security as they deal with data from a large number of customers.
Speaking at a conference organized by Sa-Dhan, he said MFIs should also focus on capacity building to deal with future challenges.
“The other thing that is very important is the integration with the evolving regulation, especially when you have data protection legislation. The huge amount of data that has been handled by all MFIs, this particular aspect (data protection) requires attention and some kind of the action plan must be in place,” he said.
Financial institutions must focus on improving ease of transactions through digital means, he said, adding that in the changing times, the needs of customers must be met at their convenience and ease.
“For this segment of (bottom of the pyramid) customers, we need to understand what they want and how easily their desire can be fulfilled,” he said.
SBI has a significant credit line to MFIs as well as to NBFCs trying to promote financial inclusion.
Talking about SBI’s participation in the government’s financial inclusion drive, Choudhary said the bank alone has opened 36 per cent of the total account opened under Prime Minister Jan Dhan Yojana.
More than 50 crore bank accounts have been opened under Prime Minister Jan Dhan Yojana in the last nine years and the deposit balance grew to over Rs. 2.03 lakh crore.
Regarding the Atal Pension Yojana, he said that SBI has enrolled 32 percent of the total number of subscribers under the scheme.
Speaking at the event, SIDBI Chairman and CEO S Ramann said MFIs should not be complacent about their client base as there is so much digital disruption happening all around.
New players will enter the financial space and may drive out traditional players if the sector does not keep up with the times, he said.