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Even this year, it was mostly the banks and insurance companies amongst Indian enterprises that rode high on the IT maturity curve; in many of them, IT adoption was in fairly mature stages. No wonder, therefore that these banks comprised the heaviest IT spenders among Indian organizations.

Total IT outsourcing has been the most prominent trend that marked the IT maturity of the BFSI sector. The Bank of India contract with HP was the pioneer, and Bank of Baroda and UCO Bank have replicated this model among others with HP only. While the hardware deployment and networking part as well as application rollouts were more or less complete, more of the consulting phenomenon is now coming into the forefront of these engagements.

Total IT outsourcing has been the most prominent trend that marked the IT maturity of the BFSI sector

Adopting a Change
Bank of Baroda looked at adopting a change management approach, whereby HP consulted with them to create a model branch. HDFC Bank inked a 10-year Rs 360 crore contract with Wipro Infotech for IT outsourcing that involved provisioning of IT infrastructure for branches, infrastructure management for datacenter, networking, end user support and level 1 application support. Under a five-year contract, HP would implement and manage the core banking solution (from Infosys) across 1,000 branches of UCO Bank.

Linux, a Tool
BFSI has also emerged as a powerful Linux votary. The UTI Bank call center that handled over 7,000 calls per day was running on Linux. Canara Bank and Central Bank also deployed Linux in over 2,000 branches while Allahabad Bank did so in 800 branches. On the insurance side, Life Insurance of India (LIC) planned Linux deployment across 30,000 desktops, New India Assurance scaled up to 23,000 and so did Bajaj Allianz.

Basel II compliance is another crucial issue debated in the Indian banking sector. As the deadline to start implementing Basel II inched closer, Indian banks needed to get their act together and step up their efforts to become Basel II ready. Basel II accord lays increased emphasis on regulation and risk management.

Emerging Area
Domestic BPO was another emerging area that witnessed increasing traction amongst BFSI organizations. On this front, SBI outsourced its customer support operations to MphasiS for about Rs 250 crore. Under the deal, MphasiS provides predominantly voice-based inbound services for the bank from its Noida center. India's no. 2 bank, ICICI was running two large call centers in Mumbai and Hyderabad set up at Rs 20 crore and Rs 50 crore, respectively. While the Mumbai center had 700 seats, Hyderabad had 1,200. HDFC Bank, one of the first banks in the country to launch call centers, serviced 80% of its customers through 13 centers located across the country during 2005-06.

Syndicate Bank became the first public sector bank to enter the BPO segment when the Reserve Bank of India cleared its proposal to float a new subsidiary for undertaking BPO activities with an authorized capital of Rs 10 crore and subscribed capital of Rs 1 crore. Eventually, this entity would also cater to the back office needs of other banks, mutual funds and RRBs. Bank of India also started a business process re-engineering (BPR) exercise, encompassing centralization of operations not requiring customer interface as well as restructuring of the organization in view of changing business requirements.

Rajneesh De
rajneeshd@cybermedia.co.in

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