Surging Digital Transactions: Powering India’s Growing Economy

India is witnessing explosive growth in digital transactions in general. UPI is just one example. Over 13 billion UPI transactions per month is a massive number and it is growing rapidly. The growth of 51% in volume and 40% in value of transactions in last 12 months is staggering. These transactions ultimately culminate in landing in the bank’s network. Similarly, there is a rapid growth in online banking transactions – RTGS, NEFT, IMPS. For many banks, over 90% of the conventional transactions of CASA are taking place through online digital channels. Then you add the transactions of credit cards, FastTag, online shopping, they all are growing exponentially eg. FastTag recorded 338 million transactions valuing at about USD 700 million in March 2024*.

Bank’s Technological Investments and Challenges

To cater to this growth, banks have invested heavily in technology infrastructure over the last five years, with technology spend increasing to 7-9% of operating expenses from 4-5% previously. This significant investment has enabled banks to build robust digital platforms, modernize their core banking systems, and deploy various digital channels to meet the growing customer demand. However, managing this technology infrastructure is a significant challenge, with banks facing a complex web of issues such as:

• Application sprawl: The rapid growth of digital channels has led to a proliferation of applications, making it difficult for banks to manage and integrate them seamlessly.
• Varied deployment platforms: Banks are using a mix of on-premise, cloud, and hybrid environments, which can create complexity and compatibility issues.
• Managing thousands of endpoints: With the increasing use of digital channels, banks need to manage a vast number of endpoints, including mobile devices, ATMs, and online banking platforms, which can be a daunting task.
• Ensuring security and compliance: Banks must also ensure that their technology infrastructure is secure and compliant with regulatory requirements, which can be a challenge given the rapidly evolving threat landscape and changing regulations.

These challenges make it essential for banks to have a robust technology infrastructure management strategy in place, one that can help them optimize their technology investments, improve efficiency, and ensure seamless customer experience.

Regulatory Compliance as a National Imperative

The two most pressing challenges for banks are managing people and keeping pace with regulatory compliance. Regulatory compliance is critical in India, where digitalization of transactions is a key parameter for economic growth and a crucial step towards achieving the country’s ambition of becoming a global economic superpower. The value of transactions carried out through digital channels is substantial eg. Value of UPI transactions was around USD 240 billion in March 2024 and that of RTGS transactions was around USD 1,739 billion in February 2024*. The huge value and rapid growth in digital transactions has far-reaching implications for the country’s economic growth, financial stability, and global competitiveness. Any disruption to digital infrastructure has national ramifications, potentially impacting millions of citizens, businesses, and the overall economy. Moreover, given the political significance of digitalization, banks face immense pressure to ensure strict adherence to uptime, as any failure can have political repercussions and undermine the government’s efforts to promote digital India.

In this context, regulatory compliance is not just a matter of following rules, but a national imperative that requires banks to prioritize digital resilience, security, and innovation. The country’s economic growth, financial inclusion, and global standing depend on the ability of banks to provide seamless, secure, and efficient digital services. Therefore, banks must invest in cutting-edge technology, talent, and processes to ensure that their digital infrastructure is robust, reliable, and future-proof. By doing so, they can contribute to India’s economic growth, enhance its global competitiveness, and help the country achieve its ambition of becoming a leading economic superpower.

Ashnik’s Role in Enhancing Digital Resilience

While banks have made significant strides in implementing various measures to comply with regulations, including robust cybersecurity practices, 24×7 monitoring, fraud detection, and compliance reporting, the exponential growth of digital transactions and increasing complexity of their technology infrastructure make it challenging to maintain complete control and ensure seamless compliance. As banks strive to stay ahead of the curve, they require specialized expertise to augment their capabilities and address the evolving challenges of digitalization. This is where Ashnik’s cutting-edge services come in, offering tailored solutions to help banks strengthen their digital infrastructure, enhance their cybersecurity posture, and ensure regulatory compliance with ease.

Expertise and Solutions

Ashnik understands that there is no one-size-fit-all solution to improve the resiliency of the technology infrastructure. Instead, we focus on the details, partnering with banks to address specific challenges. Our expertise includes:

• Predictive Infrastructure Monitoring: We go beyond traditional infrastructure monitoring and APM solutions, leveraging machine learning and Elastic stack capabilities to create predictive insights that help banks anticipate and prevent potential issues.
• Transaction and User Journey: We help banks build comprehensive, actionable insights into transaction journeys, identifying anomalies and improving overall user experience amidst application sprawl.
• Network Vulnerabilities Detection: We enable banks to detect network vulnerabilities in real-time, providing actionable insights to proactively address cyber threats and protect their digital infrastructure.

By addressing these critical areas, Ashnik’s services empower banks to enhance their digital resilience, ensure seamless compliance, and stay ahead of the curve in the rapidly evolving digital landscape.

Note – *Source – NPCI and RBI websites