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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

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