Recent Challenges in Indian Banking and way forward to cope up with them

With the advent of technology, banking has come way forward and modern-day banking has unique challenges and ways to cope up with them. Here in this article we will try to discuss few challenges of modern-day banking and ways to cope up with them.

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With the advent of technology, banking has come way forward and modern-day banking has unique challenges and ways to cope up with them. Here in this article we will try to discuss few challenges of modern-day banking and ways to cope up with them.

1) Adaption of Digital Banking & Cybersecurity

With the growth of digital banking and reliance on technology, banks must invest heavily in technology to provide secure and seamless services to customers. However, integrating cutting-edge technology while maintaining legacy systems can be difficult. Moreover, as digital banking expands, the risk of cyberattacks, data breaches, and fraud increases. Banks must continuously upgrade their cybersecurity measures to protect sensitive customer information and maintain trust. Various efforts are being made by banks, financial institutions and government to curb malpractices like cyber frauds, digital arrests, still awareness and alertness of customers will play key role in avoiding such mishaps. Apart from that, there is still some reluctance in usage of technology, specifically when it comes to usage of technology in managing personal finances, so mindset of customers, needs to be changed.

2) Rising NPA'S and Unsecured credit

With great opportunities comes great risk. With expanding businesses and growth in tier 2 and small cities, there are more opportunities for banks to extend credit. But with that comes higher risk of failures of business, which in turn increases probability of loans turning bad. While NPAs have reduced in some areas, high levels of bad loans continue to be a significant concern, specifically where there is sector specific stress or may be some loans which are not backed by collaterals. Focused recovery branches, assistance in reviving the businesses can be a key in reducing NPA's.