'The idea was to use IT to engage with customers, go beyond the hygiene tasks, and bring innovation'

IndusInd Bank, started its operations in 1994, at a time when the market was already crammed with multiple banks for all the categories of customers-big, small, household, enterprise, etc. The bank had no unique set of customers, but it built its own niche with the help of technology and multi-channel delivery capabilities. IndusInd Bank was soon recognized as the first of the new-generation private banks, which received contributions from the NRI community. In a discussion with Dataquest, Paul Abraham, chief operating officer, IndusInd Bank talks about the bank, technology, and roadmap ahead. Excerpts

Do you believe that the role of IT has changed from just bringing in internal efficiency to creating competitive business advantage? Could you talk a little about the new initiatives like Cash-on-Mobile, Direct Connect...

IT is all pervasive and an important part of any business-be it back-office processing capability, management of employees, analytics or information management or control, or customer engagement. Recently, after witnessing a change in bank management, we drafted a new focus. The drafts concentrates on increasing internal cost-efficiency with steps like centralization, cost management, etc.

Also, we tried to look into customization and customer acquisition, as we were already a weak brand in a competitive market place. The idea was to use IT to engage with customers, go beyond the hygiene tasks, bring innovations, and use branding platforms to talk about it. As I had pointed out, we must integrate IT business and innovation.

Around this we brought small but impacting features. For example, an Automated Teller Machine (ATM) is used to draw cash with the help of a card. We introduced the feature choice of the denomination. Customers could send request for denomination as well. It was a small tweak in the software and hardware.

Gradually, based on customer feedback, we also introduced cash-on-mobile and quick redeem services.

As you already know Cash-on-Mobile facility is for the customers to transact money to anybody irrespective of the fact whether the beneficiary has an IndusInd Bank account or not and even if he is using a debit card or not. With the help of a mobile application this money could be transferred to the beneficiarys mobile number and hence the beneficiary receiver can use the mentioned code to receive the funds from IndusInd Bank ATMs without using his debit or ATM card.

Another initiative Direct Connect is our latest phone banking service through which we are trying to address the customer inconvenience, who can reach us by dialing to the bank and going through the IVR process. The exclusive customers can speak to the phone banking executive directly without going through the IVR. Lastly, the Quick Redeem Service, helps our credit card customers redeem their reward points on every transaction instantly by sending an SMS.

Responding to the RBI regulation, under which companies are requested record the cheque images, we had also launched a Check-on-Cheque service. Launched in Delhi and Chennai, with this process, it becomes easy to keep no other record than the statement and maintain a periodic record of what we offer as cheque images along with the statement of account.

These are various latest
instances of using IT as a responsive innovation and building competitive advantage.

Apart from building business value out of IT, we used it as a tool for many initiatives. We have a national grid of solar ATM and we monitor and manage it centrally. So, we have a network of rural ATMs in Punjab, which is monitored through a central monitoring console in Mumbai to check the energy utilization.

How do you look at the new technologies like cloud, mobility, etc? What have been the latest implementations around it?

With the evolving technology, we look forward to building an ideal state of architecture, which would be a dynamic thing over the years. This architecture would involve content, middleware, enterprise services, and core platform, tools for analytics, workflow, and many more things.

Presently, we have been building on the deep back-office innovation around virtualization, thin computing, and optimizing data movement and communication architecture. Over the past 2 years, we have set the roadmap looking at cost of investment protection. We virtualized over 150 servers into 8. We have data centers in Mumbai and Chennai, which are based on the green quotient.

Talking about the areas of bulk usage where we have a large back-office process, following the market trend, we are introducing thin computing in every new branch. In this way, we are building an internalized cloud.

We use technology for serving 2 divisions-back office and operations. In back office, IT is purely used for predictive assessment for customer pricing and anti-money laundering scenario mapping. While in operations, IT can play a crucial role in increasing efficiency.

What is your next step?

One of the next steps from here is consolidation play, ability to do transaction while customers are on move. Mobile banking is just the tip of the iceberg, but there are lot many opportunities possible with partnered solutions with telecom and microfinance.

For instance, in rural banking the major issues in this space are cost and reach. The central projects of building a national identity (UID) database will bring ease of getting identity and then we would be able to offer services through delivery channels like mobile. We are seeing a lot of bundling happening across verticals like hospitality, banking, and education. There is a huge world out there and a lot of opportunities for banking to explore newer channels.

However these are long-term plans. At present, for switching our Core-Banking Solution (CBS), we had the solution from a UK based firm. With the maturity of the term, we have switched to another CBS offering by an Indian service provider, which is already mid-way and we would most likely be available with the latest CBS.