Anywhere Banking

In the last decade or so Indian banks turned a new leaf by way of offering
better customer experience by deploying technologies that made 24x7 banking a
possibility. However, the road to better customer experience has been fraught
with difficulties. It has been more of an infrastructure issue rather than a
technology issue. There are issues related to network connectivity, training and
data migration, ie, how one industrializes data. Also if it is not a technology
enabled branch then employees have to be exposed to technology training, says N
Ganapathy Subramaniam, president, TCS Financial Solutions.

Moreover, as per the 2000-01 WTO agreement, PSU banks were to de-license
branches by 2009 enabling global banks to set up shops without the permission of
Reserve Bank of India. This meant that Indian banks had to be ready to face
competition from global players, implying that technology had to be embraced to
be ahead of competition. While this agreement does not hold ground, technology
has now become one of the priorities for PSU banks, says Atul Kumar, GM, IT,
Syndicate Bank.

Customers too began demanding better services from banks owing to the entry
of private players in the space. The differentiating factor was that while the
other banks charged for these services, PSU banks offered these services free of
cost. For instance, if you want to transfer funds up to Rs 50,000, you could do
so online free of cost, says SK Sehgal, GM, IT, State Bank of India.

Branching Seamlessly

There were other challenges associated with deploying core banking in Indian
PSU banks. One had to deal with internal operations management, where previously
every branch had to do their own day closure; all this is now done centrally but
one has to keep in mind that proper checks and balances are inserted to
eliminate overt dependence on headquarters and internal workflow of the regional
branch is managed.

Centralization also brought in legacy challenges implying that since every
branch has certain peculiarities with centralization bringing in uniformity, the
staff had to learn afresh and then unlearn what theyd learnt before, says
Sehgal. The banks also had to deal with people-related issues: considering that
most bank staff are habituated to working in a certain manner, centralization
might make them feel deprived of the authority.

But it was not just the bank staff who had to let go of legacy learnings, the
banks management also had to be convinced of the benefit of deploying core
banking. Since most banks use public money, it is vital that the management is
convinced that any penny spent is worth it. While every IT expenditure earlier
was around Rs 100 crore; CBS deployment alone cost banks close to Rs 300-400
crore. The challenge was to make the board ready for this huge cost, says
Kumar.

Through CBS we can tap customer info right from the time the person walks into the bank to the time s/he has availed of the services Atul Kumar, assistant GM, IT, Syndicate Bank	With centralization bringing in uniformity, the staff had to learn afresh and unlearn what theyd learnt before SK Sehgal, GM, IT, State Bank of India	Banks are able to manage with lesser manpower, handle increased business and transaction volume, and thereby manage costs PA Kalyansunder, GM, IT, Bank of India

The banks also had to deal with availability of infrastructure issues.
Considering that more than 50% of the public sector branches are located in
rural areas where they grapple with basic issues like power and connectivity
leave alone technology, says PA Kalyanasundar, general manager, IT, Bank of
India.

Not one to be bogged down by infrastructure issues in rural/semi-urban areas
in tier-2 and 3 cities, the public sector banks have overcome these roadblocks.
By deploying alternative sources of power (like gensets), and providing
connectivity through VSATs, banks have overcome this hurdle. For instance, Bank
of India has powered many of its rural branches by means of solar power, for
which we have received acclaim, adds Kalyanasundar.

Good Returns

The most visible benefit of deploying core banking has been collating
customer information and using this information for offering customized
services. Through CBS we can tap customer information right from the time he
walks into the bank to the time he has availed of the service. This was not
possible earlier when banking was done manually, says Kumar.

In fact there is a glut of information available, so much so that the banks
are now gradually learning how to use the information, adds Sehgal.

Customers right from pensioners, salaried account holders to plain savings
account, are now benefiting from CBS. For instance, pensioners can now withdraw
money on the first of every month even before the branch opens. Even the arrears
debited which used to be a cumbersome process taking at least a month earlier,
can now be done in a matter of few hours, says Sehgal.

Inter-branch transfer that earlier used to be a time-consuming process has
now become much easier and can be done all in a matter of few minutes. In fact,
the customers do not need to even transfer their accounts (from one city to
another) as he can access the same from anywhere.

Even the volume of transaction that can be handled by a single branch has
gone up manifold. SBI handles approximately 4 mn transactions from more than
10,000 ATMs across India.

Anil Jaggia, CIO, HDFC Bank adds a new perspective by adding, Since majority
of CBS applications are not supporting multiple languages in prevalence in
India; one is seeing heavy dependency on English, both for the customers and
bank staff.

Its been a win-win situation for both the banks and the customers when it
comes to CBS deployment. Kalyanasundar sums it up succinctly by adding that
banks are able to manage with lesser manpower, handle increased business and
transaction volume, and thereby manage costs.

Stuti Das

stutid@cybermedia.co.in