Shouldn't Regulator Declare A Moratorium On New Launches For All Banks Having Chronic Unresolved Issues?

Several Founders, Co-Founders, CXO Bankers, CXO Fintech professional & people who participated in the ePanel discussions:

Mr. Hitesh Thakkar, Fintech Consultant, Self-Service Automation
Mr. Shashank Chowdhury, Advisor- Digital Financial Services.
Mr. Probir Roy, Co-founder, Paymate
Mr. Vikas R Panditrao, Co-Founder, Forum of Industry and Academic Knowledge Sharing (FIAKS)
Many other CEO/CXO Bankers & Fintech professionals on FIAKS Forum requested to remain anonymous

Various FIAKS community top leaders reported several issues since 26-December-2020 with leading private banks’ with UPI

A one-hour downtime affects 400,000 UPI transactions. Earlier in 2019, some banks had issues with the data center, others have inadequate backup and contingency plans, and on top of that overall throughput has increased manifold. Last year there were 85 outages of a tech nature. SBI accounted for 61 of them.
What is the cause? Banks’ minimal spending on IT is an indicator of their troubles—banks have gone from spending 1-4% of their net income to 2-5% on IT. Most of the spending has also been on the front end such as tweaking the mobile app, adding some online bill payment feature. The core systems haven’t been really touched.

So the community puts forth a question to ponder – Shouldn’t regulatory authorities make it a standard operating procedure of putting all new digital banking product launches on hold of all such banks till the chronic issues are not ironed out the way RBI rightly did it with HDFC Bank?

A quick recap for those unaware of the HDFC issue – In December 2020, RBI temporarily restricted HDFC bank from launching any new digital banking initiatives and issuing new credit cards on account of service outages reported by HDFC over the last two years. Following which HDFC submitted an action plan to RBI to address the repeated outages and strengthening its technology platform.

Well, it may be a good idea to declare a moratorium period for new launches and take a very strict and close look at the chronic unresolved issues. That would certainly give greater confidence to the end-users about the seriousness with which the fintechs, banks, and regulators are pursuing the issues.
However, going forward, after resolving the outstanding issues, the launch of new products ought to be more controlled in terms of quality and its certification by a third party. The entire responsibility of certification and its recertification on every new release of a version of the product ought to be with the bank/financial institutions since their reputation is almost always at stake.
Here’s a recommendation put in by a member, “if any bank is serious then should train its team to use APM tools like Dynatrace ^[1] it’s worth dollar spend as co-relationship of Code with underlying Infra (Network, System, DB, LB, Probes, Firewall) can be done easily.”

Talking about certification by the third party;