State Bank of India (SBI) managing director Alok Kumar Choudhary on Wednesday said there is a need for micro finance institutions (MFIs) to pay attention to data privacy and cyber security as they deal with data of a large number of customers.
Speaking at a conference organised by Sa-Dhan, he said, MFIs should also focus on capacity building to deal with the challenges of the future.
"The second thing which is very important is the integration with the evolving regulation particularly when you have data privacy law. The enormous amount of data which has been handled by all the MFIs, this particular aspect (data privacy) requires attention and some kind of action plan needs to be in place," he said.
Financial institutions need to focus on improving ease of transaction through digital means, he said, adding, the need of the customers in the changing time has to be addressed as per their convenience and ease.
"For this segment of (bottom of the pyramid) customers, we need to understand what they want and ease with which their desire can be fulfilled," he said.
SBI has a significant credit line to MFIs as well as to NBFCs that are trying to foster financial inclusion.
Talking about participation of SBI in the government's financial inclusion drive, Choudhary said, the bank alone has opened 36 per cent of the total account opened under PM Jan Dhan Yojana.
More than 50 crore bank accounts have been opened under the PM Jan Dhan Yojana in the last nine years and the deposit balance swelled to over Rs 2.03 lakh crore.
With regard to Atal Pension Yojana, he said, SBI has enrolled 32 per cent of total subscribers under the scheme.
Speaking at the event, SIDBI Chairman and Managing Director S Ramann said MFIs should not be complacent about their customer base as there is so much digital disruption happening around.
New players would enter the financial space and can drive traditional players out if the sector does not keep pace with time, he said.