A Bank of Talent

If music is the food for young minds, D Krishnamurthy will play on. At 57, he
loves music "It keeps me fit and going," quips the CIO of the Bank of
India, very much in the news for its 10-year outsourcing deal with Hewlett
Packard (HP).

The Bank of India, or BoI, as it is popularly called, was in the news 37
years ago as well, when Krishnamurthy joined. The bank was recruiting rank
holders from universities and paying them higher salaries than any other bank.
Our man, fresh out of a Chennai college, took the plunge. It has remained his
dream job ever since.

In these four decades, he has worked with all kinds of branches, in varied
regions and cities, and witnessed the IT developments of the last 15 years…as
a spectator and a player.

D Krishnamurthy 
CIO, Bank of India

HP-BoI deal won an award for excellence in outsourcing under the ‘First Steps Category’ for good conceptualization resulting in benefits.

He has been in and out of IT since 1980, when he was first posted to the bank’s
London branch. But his exposure to all areas of banking and business, coupled
with the experience of handling many systems-from ICL 25 to IBM to the advent
of Micros Mini Windows LAN-made him the right choice for the GM-IT’s post,
as CIOs in the bank are called.

"I am approachable, straight forward, and treat everybody working with
me as my equal. I spot talent and try to groom them. At the same time, I also do
reverse mentoring-if I find some of my juniors with better knowledge of a
particular domain, I don’t mind sitting with them and learning," he says.
These qualities and more make him get along with his staff very well.

As a CIO, Krishnamurthy has two main worries: security breach, systems going
down. His experience comes in handy here. All these years provided him with an
opportunity to evaluate various banking solutions, so he could select and
implement them in BoI’s Hong Kong and Singapore branches.

It helped him immensely in 2002, when he was promoted to head the IT
department. There was a real transformation going on in the banking industry in
India in terms of technology adoption. BoI, in particular, was looking at
computerizing more number of branches, and also wanted to network branches in
distributed database architecture with a cluster approach to provide anywhere
banking in a limited way. Also, to look at providing alternate delivery channels
like ATMs. "With competition all around, it was a big task the bank had to
face: leverage technology quickly and adapt itself like any other large PSU
bank," Krishnamurthy reminisces.

The BoI IT Initiatives

  • The bank is moving fast to strengthen IT infrastructure to Best in Class. 1200 branches to be networked by March 2006. 1400 remaining branches to be networked by December 2006 for purposes of MIS and limited transactions.

  • 100% of Bank’s branches

  • 213 branches are on Core Banking (CBS) mode. 750 branches will be under CBS by June 2006. 

  • Internet Banking introduced at 731 networked branches including transactions between accounts.

  • Star e-pay, a new utility Electronic Payment Service introduced.

  • 280 online ATMs of the Bank and about 12000 ATMs made available to customers including shared ATMs/VISA Network.

  • SMS Banking, Tele-Banking available at 731 MBB branches.

  • Information Kiosks with pass book printing facility installed at 59 branches and Kiosks with cheque deposit facility installed at 12 branches.

  • 475 branches enabled for Online Tax Accounting System

  • RTGS/SFMS enabled in 268 branches.

  • Hub set up at Singapore to network all foreign branches.

Since BoI wanted to become 100% computerized (which it is now), it had to
deploy all its IT resources towards this end. Branches being in remote centers
threw up a plethora of problems like non-availability of infrastructure supplies
and support amongst others. "Educating and re-skilling the staff were major
efforts, but because of their wholehearted involvement at all levels, this could
be done," he said.

His own staff was receptive to change, but not the outsiders. They had to
educate telephone exchang, people, who provide the bandwidth, people who
provided the networking equipments. "The change was so fast even these
people were not really prepared. Such vendors were few and not yet prepared,
unlike the banking sector which leapfrogged technology at a rapid pace.

His pride then and even now, to an extent, is Cibex, an in-house software
developed by the bank and maintained with a single version that ran at about
1,500 branches at the time. BoI presently has 2,600 branches in the country and
23 outside India-Cibex is still being used (despite a solution from Infosys
now being deployed)-and will continue to be used in the smaller branches. It
will also be upgraded and maintained.

The bank’s moment of reckoning came recently when it embarked on an
implementation of a core banking solution (CBS) for its 750 branches, opting for
an innovative way: the outsourcing model. The entire CBS requirements have been
outsourced to HP, the software for banking functions coming from Finacle. The
CIO had an important role to play here, being instrumental in designing the
outsourcing options, defining the requirements while drafting in consultation
with experts, the contract and the SLAs.

"We decided to go with the outsourcing option because of many
advantages. The cost is fixed for a period of 10 years and we have very clearly
defined the capacity requirements based on the business growth for the next
decade. So, there will be no uncertain expenses for technology,"
Krishnamurthy informs. In the process, BoI will also save technology management
costs by about 20% and reduce transaction processing costs by another 18-20%.
Savings from technology management costs will be about Rs 10 crore per annum.

The bank was handling about 120 vendors earlier, but after the CBS was
outsourced, the number came down considerably. BoI now has well defined
committees with experts to look into various aspects of vendor selection and
monitoring of performance. "Like medical representatives who normally
educate the doctors, we too learn about new products, methods and techniques
from the vendors," says Krishnamurthy. All the learning and the outsourcing
strategy stood vindicated when the bank won an award this year for excellence in
outsourcing under the ‘First Steps Category’ for good conceptualization
resulting in benefits. The award is an annual program developed by the
Dallas-based Outsourcing Center. It recognizes IT and business process
outsourcing vendors and their clients for excellent achievement. "We were
one of the six winners of the 345 contracts evaluated by a committee of
international experts world-wide," said the CIO with pride.

Security, which is paramount to a bank, is also part of the core-banking
project outsourced. BoI has then gone ahead and appointed two consultants-one
to look at the security required in the bank and the second, to look at what the
vendor has provided. "In case of the other networked branches where we have
a WAN, about 700, the security requirements are not as stringent as in the core
banking area. That is because it is decentralized. If one branch is affected, it
doesn’t affect all the other 699 branches," he says. The bank anyway has
a very strong information system security policy. There are three committees-the
policy committee to draft the policies after studying the security threats, the
implementation committee for policy implementation in various city level servers
(a cluster where about 30-40 branches are connected to a server) and a
monitoring committee to do the audit. Krishnamurthy is in the policy committee.

In addition to the outsourcing deal, the bank has another innovative project:
it has integrated all its foreign business by setting up a Global Hub in
Singapore. "All our foreign branches will get connected to the hub and it
will run the entire IT infrastructure. This will be cost effective and also
provide centralized security implementation, standardization of procedures and
practices," he informs.

Personal Diary

Previous assignments: Joined Bank of India after college, worked in various capacities as an officer, accountant, branch manager, regional manager, zonal manager, DGM-IT.
Experience: 37 years, since 1968. Has worked in many centers abroad because of his exposure to foreign exchange business from India as a Forex Dealer Exports Imports manager in various branches. Worked with the UK, Singapore and Hong Kong branches where he picked up skills in international banking, while getting initiated into technology.
Claim to fame: Successfully ran two different systems-core banking and multi branch banking systems-in BOI; instrumental in designing the outsourcing options, defining the requirements and drafting, in consultation with experts, the contract and the SLAs for the HP deal.
Family: Married. Has a daughter and a son, both married, and settled in the US.
To keep fit: Exercises, listens to music, talks to the young and the enthusiastic.
Believes in: Clarity of mind; is ready for all things that happen around him.

It is hard for the humble CIO to pinpoint what had been his greatest
achievement. Running two different types of systems in one bank, perhaps. One is
the core banking system, the other one is the cluster approach of what is called
the multi branch banking system. "Somehow trying to marry these two totally
different systems, to give seamlessly any type of service to the customer was my
greatest success. Usually, banks differentiate. So, a customer in Mumbai and in
a smaller town will get different levels of service. My challenge was to make
these systems talk to each other," he concludes. The other challenge, to
maintain the same kind of service, was accomplished as well.

Goutam Das

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