Recently, the RBI released its Report on Currency and Finance (RCF), which highlights some of the major concerns in the Indian banking and financial sector. The report mentions that the financial sector in India has undergone some major changes in the last decade due to the mass adoption of technological advancements. This shift has negatively impacted middle and lower-end jobs because of automation. Clerks and support staff are losing their jobs. The officer-to-support staff ratio has fallen from 50:50 in FY11 to 74:26 in FY23. These challenges necessitate financial institutions to invest in upskilling and reskilling their staff.
RBI governor Shaktikanta Das says, “Digitalisation is decentralising financial labour through outsourcing and telework. Automation replacing labour can potentially widen the gap between capital and labour returns, creating a fragmented labour market with low-skill/low-pay and high-skill/high-pay jobs, while middle-tier jobs are displaced by technology.”
Also read, RBI Estimates India’s Annual Growth At 7% For FY2023-24
Even after investing in upskilling programmes, traditional learning and development methods will not suffice the current technological transformation. RBI further states that substantial investment is needed to develop the required skill set to meet the growing demand. Amidst these concerns, the biggest problem that lies ahead of India is the cost of cyber attacks. The financial toll of these attacks has increased by 28% in a span of three years from FY20 to FY23 and reached $2 million. Most of these cyber attacks were particularly phishing attacks and compromised credentials. As per the RCF, phishing attacks account for 22% of cyber attacks, while stolen or compromised credentials make up 16%.
However, the report also mentions that India is currently at the forefront of the digital revolution and that the Indian digital economy is expected to contribute 20% of the GDP by 2026. It further mentions that digitalisation will improve access to financial services at more affordable costs for the coming generation.
