Amid a surge in Information Technology (IT) related troubles, banks said that they spend around 10 per cent of their expenses towards the strengthening of their IT system. The lenders plan to further augment their tech capabilities by continuing their investment.
“Our IT and cyber security expenses as a percentage of overall spend since 2019 have moved up from 5.6 per cent to about 9.4 per cent in the current financial year. It is an ongoing effort. We have an ability to make quick recovery and corrective actions, and we will remain focused on improving our capabilities in this area,” said Sandeep Batra, executive director, ICICI Bank during their post-earnings media call.
Recently, ICICI Bank reported having faced a technical glitch in its mobile banking application wherein some users said that they could view the details of other people’s credit cards. Following which, the lender has blocked nearly 17,000 credit cards and is issuing new ones to these customers.
The action was to “prevent any possible prolonged outage” that could “seriously impact not only the bank’s ability to render efficient customer service but also the financial ecosystem of digital banking and payment systems.”
IndusInd Bank’s top official said that the lender continues to evaluate and invest in their technology infrastructure, with the bank spending nearly 8 to 10 per cent of their total cost to income on IT-related expenditure.
Speaking on their IT-related vigilance, Sumant Kathpalia, managing director & chief executive officer, IndusInd Bank said, “We continuously evaluate our systems through audit on an ongoing basis. We make sure that we completely track the items and ensure that we are up to date on all the issues which exist. There will be gaps here and there. But, I think as long as we know that there is an action plan, informing the regulator and our clients about it, we are completely comfortable.”
Earlier, in December last year, Deputy Governor of RBI, J Swaminathan had said that banks and other financial institutions must possess robust Disaster Recovery and Business Continuity Plans which also must be tested periodically amid increased digitisation of the financial system.
During the post-earnings media call, private sector lender Yes Bank said that its tech and IT spends, which also includes capital and operating expenses, accounts for nearly 10 to 11 per cent of their overall operating expenses.
The Deputy Governor had also noted that banks have not been spending the budget earmarked for procurement of IT and security systems despite an exponential increase in the digitisation of the financial services system, which makes it attractive for cybercriminals.
Last year, RBI had restricted Bank of Baroda from onboarding new customers on its mobile app ‘BoB World’ due to material supervisory concerns. Separately, UCO Bank also reported an erroneous credit of Rs 820 crore to account holders of the bank through Immediate Payment Services (IMPS).
First Published: Apr 28 2024 | 7:05 PM IST