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The anytime, anywhere banking concept has gained prominence in recent years with Indian banks now offering customers the facility to transact from anywhere. The earlier generation had to contend with banks functioning from 10 am to 5 pm and no option for account operation from any other city, leave alone any other branch except your own. All that is a thing of the past with most of us doing banking transactions online, courtesy core banking solutions deployed in a majority of Indian banks.

But considering that most Indian banks have multiple branches, the deployment was not a cakewalk for the vendors. Most branches were operating in different systems which meant that the branches were not centralized and each branch had different servers. The difficult part was process standardization, ie, rolling out common policies across branches, says Haragopal M, head, Finacle, Infosys.

Networking and connectivity were also crucial in deploying CBS as most public sector banks have branches in far-flung locations and connecting them with centralized network was difficult, says Abhay Sinha, senior vice president and business head, BFSI, South Asia, 3i Infotech. Proper domain knowledge was important as both vendors and banks had to speak in the same language, he adds.

Since core banking required business process re-engineering, most traditional Indian banks were reluctant and expected manual processes to be customized in core banking applications. They failed to see that the very reason of CBS deployment was to improvise processes in order to make them more efficient. Data migration too invariably had many gaps and integration to existing systems faced roadblocks in terms of available documentation, says Hanumant Tripathi, CEO, Infrasoft Technolgies.

V Senthil Kumar, VP, marketing, Oracle Financial Services Global Business Unit adds that the initial days of automation were dogged by issues relating to trade unions, and the challenges were around people being able to find new roles with the implementation of CBS. The private banks were the first to take to CBS followed by nationalized banks. Owing to enhanced experience of vendors and bankers with many banks being in the third generation of IT investment with more than 15-20 years in computerized mode, adoption of CBS has been on the upswing in the last decade or so.

Cost Benefits
Unlike other solution deployments which see returns in some time, CBS deployment enables banks to benefit right from day one. Most critical processes can now be centrally handled, often with just one operator for maybe a bank of 500 branches.

A centrally located audit team is able to work at real time on the working of the branches and add value at real time at great savings of cost and time, says Tripathi. Banks can also now easily outsource many internal operations to cost-effective locations. For instance a Nariman point branch will not have to locate costly space to house a clerk to issue cheque books; this can now be handled remotely, fast and accurate from a remote location like Dahisar.

Earlier it was common practice for the bank staff to work late completing work like report generation and closing account books. Nowadays, the staff can go home on time with all the work completed accurately through core banking. The real beneficiaries are the customers and regulators. Customers can now avail banking services 24x7 with geographies posing no barrier. Moreover Internet banking, SMS banking and ATMs have made banking at convenience a reality. Regulators too can get their reports more accurately and on time, and the bank is able to deploy important regulatory applications like anti-money laundering.

Most branches were not centralized and each branch had different servers. The difficult part was process standardization Haragopal M, Core Banking, Infosys	In India the evaluation of any solution by the customer takes longer. People look at core banking solution merely as a technology implementation not as a business transformation program N Ganapathy Subramaniam, president, TCS Financial Solutions

Incidentally Gartners Magic Quadrant Core Banking 2008 places three Indian vendorsTCS, Infosys and Oracle Financial Services (earlier known as iFlex)as the leaders in the category.

Modules Offered
While CBS includes the usual modules like retail asset and liabilities, multi-currency, universal banking, private banking, investor servicing, corporate banking, remittances, trade finance, Internet banking, loan management, etc, the difference is the local flavor (read customization).

N Ganapathy Subramaniam, president, TCS Financial Solutions elaborates that while the core system is standard across markets, country-specific customization in terms of language (Chinese front end), regulation (Indian banks reporting to RBI) is done. Even the RTGS connectivity is generic but the way it is installed for Indian banks is different from what is done for the global players.

Indian Vs Global
The Indian market in the last 6-7 years has certainly evolved. The cost advantage of Indian banks is unparalleled owing to their scale of operations. For instance, Punjab National Bank has signed Finacle for installing Core Banking in 1,300 rural branches, so obviously the cost of deployment comes down automatically for the vendor. The Indian market has been fairly successful in adaption. After lagging behind global players in technology adoption, it has managed to pick up. Kumar says, The Indian market is the largest in terms of banks investing in technology and these are fairly ahead and provide useful insight.

Even as most vendors agree that Indian banks are fast catching up with their global counterparts, most have issues with the Know Your Customer norms.

Subramaniam ends by adding, The Indian market differs from the global market when it comes to solution selection process since the evaluation of any solution by the customer takes longer. Also people look at core banking solution merely as a technology implementation program not as a business transformation program.

Stuti Das
stutid@cybermedia.co.in

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