The Centre for Advanced Financial Research and Learning (Cafral), an organisation set up by the central bank, on Thursday asked banks to use technology not only to scale up their operations but also to offer better services.

"To be able to ensure that the challenges of banking the unbanked are met effectively and converted into a growing and sustainable business model, there is no alternative for banks to adopt ICT (information, communication and technology) solutions on a very large scale and range," Cafral director Usha Throat told a seminar on banking technology here.

The former central bank deputy governor also said ICT solutions are required to capture customer details, facilitate unique identification, ensure reliable and uninterrupted connectivity to remote areas and across multiple channels of delivery.

Thorat also stressed the importance of IT-enabled solutions to provide better customer service and bring the cost down.

"Delivery of banking services through IT-based solutions, such as mobile phones and smart cards, while keeping costs low, enables scaling up and increasing outreach through a technology that is rapidly innovating," she said.

Referring to the challenges faced by the domestic banking system, she said issues like increasing the outreach and rising competition in the financial services space are to be addressed by the banks in the future.

"To meet the challenges of the next decade, banks will have to exploit technology, raise capital, gear up their capital planning, risk management, pricing systems and pursue HR policies to attract talent," she added.