Tech, operational resilience as important as credit risk for banks: RBI Deputy Governor Swaminathan J

What happened

Reserve Bank of India Deputy Governor Swaminathan J said at Indian Bank's leadership conference in Chennai on October 23 that operational and technological resilience now matters as much as credit and market risk for banks, requiring stronger cybersecurity, data protection and oversight of third-party service providers.

Confirmed

Global impact / market context

If regulators treat technology failures as seriously as loan losses, banks may need to spend more on dependable systems, staff training and vendor checks. Those costs could reduce profit available to shareholders, while weaker oversight could invite penalties or disruption to customer services.

Analyst inference

Digital payments, artificial intelligence and data analytics are reshaping how financial services reach customers, so banks depend more on outside technology providers. Investors in lenders should weigh spending on security and continuity against possible savings from digital services.

Analyst inference

What to watch

1. Swaminathan said oversight of third-party service providers must be part of institutional planning, so watch for bank disclosures on vendor risk controls. Confirmed
2. Banks should move technology responsibility beyond technology departments, engaging senior management and business functions, which can be tracked through governance changes and spending plans. Proposed
3. Watch whether higher technology and security costs pressure bank profits or prompt slower digital expansion, as lenders balance reliability demands against revenue growth. Analyst inference

Evidence

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