Banks.co.in: The Real Online Success Story

I don’t know when I last visited a bank, those places with live people.

About once in the past year, I guess, and that was to sign a form for online

bill payment. For that matter, I visit ATMs only for cash withdrawals and cheque

deposits. Just about everything else happens online–on the Web, on the good

old phone and IVRS, or over SMS or WAP.

The ATM revolution and the explosion in ATM usage itself happened as recently

as last year, led not by MNC banks but by ICICI and HDFC. Today, every bank

worth its name will have an ATM network or will share one–even the smaller

public sector banks–and usage is heavy. At some ATMs, I find queues at all

hours.

Of five MNC banks we checked, all five supported online banking; the score

was six out of the ten Indian banks we checked. Thanks to aggressive marketing

of online credit card management and e-banking by ICICI, HDFC, Citi, Amex and

others, people are beginning to bank online, and to opt for e-mail for card and

account statements where they can.

Banking gets my vote for the biggest IT success story in India over the last

decade. It’s a great mix of desirable results from IT–improved business

efficiency, competitive edge, and consumer convenience and benefit (not to

mention the shot in the arm for IT vendors). In a short ten years, we’ve moved

from "tellers" and queues and dog-eared handwritten passbooks to ATMs,

Web and phone access, and mobile-commerce–I just send an SMS message to check

my bank balance, stop a cheque, or pay a phone bill.

In parallel, the two big boom areas for the IT products and services industry

in India over the last couple of years have been FSI (financial services) and

telecom. FSI includes insurance, stock exchanges and the like, but it’s

banking that’s really been bringing smiles to the faces of IT vendors. And it’s

not just the private and MNC banks. The big money is in the public sector

giants, as is evident from the single Rs 200-crore order that TCS has got from

SBI, of a Rs 500-crore spend planned on IT by India’s largest banking

organization.

The FSI success has not been easily replicated elsewhere. The industry needs

to study why. It’s easy to write off other segments as less IT-savvy, but

manufacturers say that when vendors try to sell solutions from CRM to storage,

security or BPC to them, the examples too often tend to be from the FSI sector–"an

hour’s downtime is a million dollars lost for an online brokerage", et

al. It’s not that there isn’t verticals expertise around: companies like SAP

and Baan are strongly entrenched there. But the industry hasn’t been able to

translate that into outstanding successes. Ditto, for e-governance.

These, then, could be the two big challenges for IT vendors in 2002–other

than the giant opportunity in rural India covered in this issue!

pkr@cmil.com