RBI Deputy Governor outlines digital banking supervision challenges
Reserve Bank of India Deputy Governor Shri Swaminathan J discussed the evolving landscape of banking supervision in the digital era. Speaking at the Third Annual Global Conference of the College of Supervisors on January 9, 2026, he highlighted new risks and necessary supervisory responses.
Digital risks reshape banking stability
Shri Swaminathan J emphasized that banking stability now depends as much on operational resilience, data integrity, and third-party dependencies as on capital and liquidity.
He highlighted five key shifts in the digital risk landscape.
Risks now crystallise in hours, requiring tighter supervisory feedback loops.
Concentration and interdependence on common service providers create new, often invisible, common exposures.
The growing role of algorithms in functions like credit underwriting raises questions of accountability and fairness.
An expanded threat surface and sophisticated cyber adversaries demand robust resilience and recovery capabilities.
Finally, digital conduct risks, such as mis-selling and data misuse, can quickly escalate from customer harm to liquidity issues.
Supervision's evolving principles and focus
The Deputy Governor outlined four fundamental principles for supervisory response: technology-neutral, risk-based supervision focusing on activities, not technology; proportionality, calibrating approaches to complexity without lowering basic control expectations; clear accountability, ensuring supervised entities remain responsible for outsourced activities; and forward-looking supervision, spotting weak signals and testing resilience proactively.
He translated this into four central focus areas: operational resilience and cyber readiness, ecosystem and third-party dependencies, governance of data, models and AI, and technology-enabled continuous supervision, including SupTech.
Beyond compliance, towards resilience
The speech critically redefines banking supervision, shifting focus from traditional balance sheets to the complex digital ecosystem.
Its strong emphasis on operational resilience and proactive risk management is highly relevant, aligning with global best practices.
Yet, successful implementation demands significant upskilling and cultural change within both supervised entities and the supervisory body.