State Bank of India's (SBI) Managing Director, Alok Kumar Choudhary, stressed the importance of data privacy and cybersecurity in microfinance institutions (MFIs) during a conference on Wednesday. Choudhary emphasized the need for better customer data management and compliance with data privacy laws, given the large volume of customer data handled by MFIs. He also highlighted the necessity for improving digital transactions and understanding the needs of bottom-of-the-pyramid customers.
Choudhary acknowledged SBI's substantial credit line to MFIs and Non-Banking Financial Companies (NBFCs), which has contributed significantly to financial inclusion initiatives. He underscored the bank's fiduciary responsibility and the pivotal shift from financial literacy to financial services education for service providers.
In the context of financial inclusion, Choudhary highlighted SBI's significant contribution to government initiatives such as the Pradhan Mantri Jan Dhan Yojana and Atal Pension Yojana. The bank has opened 36% of all accounts under the Jan Dhan Yojana scheme, leading to over 50 crore new bank accounts in the past nine years. This effort has resulted in a considerable increase in accounts, subscribers, and outstanding deposits, while ensuring compliance with regulations and customer information protection.
The Small Industries Development Bank of India's CMD, S Ramann, also spoke at the conference, cautioning MFIs against complacency due to increasing digital disruptions. He urged these institutions to remain proactive in maintaining their customer base in this rapidly evolving digital environment.
Choudhary also emphasized the importance of regulatory compliance, responsible data handling, and the need for a robust cybersecurity action plan for MFIs on their digital journey. He reiterated that data privacy, cybersecurity, and proactive data safeguarding are critical amid the rise of digital transactions.
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