Data Privacy and Security

Banking: Digital Identities in India

The continued fall of the rupee may have been big news for India over the last couple of weeks, but perhaps the arrival of Raghuram Rajan at the Reserve Bank of India means things could finally be on the up? Kathryn Cave catches up with Ms. Kalaivani Chittaranjan, MD and CEO of eMudhra Consumer Services to learn more about the “positive vibe” on the ground and proactive measures being taken to improve online security.

When a customer walks through the door of the new Digital Security Centre in Bangalore they are instantly caught on CCTV.  Heading over to the desk, the customer must produce relevant documentation and fill out a physical form.  Their details are then handed directly to the bank, which verifies these along with their physical signature. After this, the person can download their private key to verify their Digital Signature online.

Ms. Kalaivani Chittaranjan, MD and CEO of eMudhra Consumer Services, the organisation behind these centres describes them as “like an ATM only to verify your identity.”  She believes as more Indian services move online and the volume of transactions increase the need to verify physical identities for the virtual world is becoming ever more pertinent.  The first Digital Security Centre was launched in Bangalore this August. The second one will be opened this month in Chennai and a further 25 will be unveiled across India this financial year. This is a grand plan to help Indians get to grips with online security.

“The awareness [in online security] is lacking,” Chittaranjan explains. “People do not appreciate the risk behind digital transactions. They can very easily understand the tangible branches with security, but [not] when it comes to digital. Banks [in turn] know there is a need for security, but this can become difficult because they have to invest in certain security tools. And there is a cost involved – so who is going to pay?”

To add to this the population is growing and the new generation born and raised with gadgets are increasingly looking for services online. eCommerce is expanding at a phenomenal pace. Yet there is a fundamental disconnect when it comes to security concerns. “Today, if you’re travelling by aircraft you don’t mind spending the time going through security,” says Chittaranjan. “We have seen 9/11 happen and we know why we need to do this. Possibly [an equivalent of] 9/11 is waiting to happen [in the online security space].”

All this is set against an India which has seen big changes in recent months. The continued fall of the rupee has been much commented on in the international press. However, the arrival of Raghuram Rajan at the Reserve Bank on 4th September along with his first burst of economy boosting measures has seen a rise in confidence in India. This has led to a marked initial increase in the stock market, whilst analysts are suggesting that ‘the Rajan effect' will continue to play out over the next week.

Chittaranjan describes a “positive vibe” on the ground. Yet as a businesswoman she is also necessarily cautious. Imports are still expensive and from a corporate perspective “spending may need to be reduced” and “expenditure monitored” because if the cost of living does go up the “revenue could be impacted”.  eMudhra looks to be in a good position though, because as Chittaranjan explains, “The Reserve Bank has recently introduced stricter security measures which stipulate the need for encrypting transactions between the user and bank server for high value transactions and corporate customers.” It is difficult to verify exactly what is required, and it does all still appear to be a legal minefield. Yet Chittaranjan tells me: “In this space Digital Signature is one of the recommended options. And we are one of the certifying authorities in India and recognised under the Internet Security Act.”  

The mass move online offers a huge opportunity for social improvement. It is being extensively utilised by the government to facilitate better processes, such as official identity documents. As Chittaranjan explains, in the past if you wanted a birth certificate or a death certificate it could take a long time to come through. Today the government has established cyber kiosks which provide instant services for citizens. “These people may not be literate, but they can walk in say what they want and the information can be printed out there and then. This means people with no access to the internet are now able to make use of online facilities.” 

eMudhra recently introduced the first online PAN card processing service - PAN card is the Indian identity card which allows you to file your income tax - and one of the main pieces of identity for most Indians. “Once we took it online,” she explains, they started getting people from very remote parts of India: “Many are not literate. [And] type Hindi using the English alphabet.”  Yet Indian online penetration is spreading slowly through cybercafés and intermediaries who are trying to capitalise on the opportunity. The challenge is to ensure all interactions remain secure.

In short, big changes are taking place across India and banking appears to sit at the centre of it all. This makes the surge in online interaction a very real opportunity. However, it also highlights how issues surrounding online security are becoming doubly crucial within a country which is already experiencing severe economic pressure.


Kathryn Cave is Editor at IDG Connect


« The CMO Files: Rajesh Kumar, Head of Marketing, SAP India


Crowdsourcing Innovation: Chace Hatcher, CEO of Diamond Fortress »


Do you think your smartphone is making you a workaholic?