Case Study: Cost Savings

The South Indian Bank (SIB) has long upheld a tradition of rapid

technology adoption with firsts including the in-house, fully automated branch

automation software and the core banking system in Kerala. The company's

secure data and voice infrastructure project was recently acknowledged by the

Reserve Bank of India, which, in 2006, awarded SIB the inaugural special award

for excellence in banking technology.

Headquartered at Thrissur in Kerala, SIB was founded in 1929 as

Kerala's first private sector bank to become a scheduled bank under the RBI

Act. Founded with a focus on innovation, SIB set up India's first RBI Currency

Chest in the private sector banks and the first NRI branch, industrial finance

branch, and overseas branch within the state. SIB currently operates across

India and the world through a network of 500 branches/offices.

Hurdles Encountered



As its growth expanded the company's footprint across the subcontinent,
SIB worked steadily to ensure that its communications infrastructure is robust

and reliable. With a population of 32 mn in Kerala alone, this required the

provision of reliable communications.

SIB's leased-line wide area network (WAN) provided serviceable

data connectivity between its branch offices and the twelve regional hubs, but

the separate voice network was proving expensive and burdensome to manage.

The bank eventually planned for a complete telecommunications

overhaul that would be built on consistent, scalable, and easily manageable

communications technologies. Because of its low cost and easy manageability,

VoIP was chosen for SIB's next-generation telecommunications infrastructure.

VoIP was a relatively new technology, and SIB was just the third

and the largest to commit to the technology in more than one hundred service

outlets in 2001. And, while SIB was convinced that VoIP was the right technology

for the future, the company also needed to ensure the implementation, provided

enough data security to the new network was up to tight standards, which are

required in the banking and finance industry.

Chosen Solution



Nortel's solution, chosen over several competing tenders, is built around
Nortel Ethernet switches and routers configured in a three-tier network

configuration that matches SIB's own internal structure.

VoIP traffic is sent from branch offices to regional offices via

the 64Kbps leased-line WAN with an ISDN BRI and analog lines for backup. This

traffic is then aggregated and sent back to head office via 2Mbps trunk lines.

Using the Nortel routers' advanced security features, voice

and data traffic entering SIB's head office network is encrypted and stays

that way for the entire time it remains within the central network. This level

of security was essential for SIB's business requirements, and is provided

effectively by Nortel's comprehensive security features including Tunnel

Guard, which provides valuable insight into performance and usage of encrypted

data streams in real-time.

To ensure maximum uptime, the entire network has been designed

to run in a fully redundant configuration. Backup routers in all SIB regional

offices provide instant and seamless fail over in the event of a service outage.

Sreekumar Chengath, chief manager, Network and IS Security, SIB,

says, "Reliable and highly available secured network is responsible for

timely delivery of optimum output to end users for any application. Hence, right

from design to establishment, it is to be done meticulously. Selection and

positioning of appropriate network equipments and associated components play a

paramount role in this activity."

Major Benefits



SIB's VoIP network has been covering all the 500 branches/offices, and is
delivering significant benefits to the organization.

Elimination of redundant telecommunications links and more

efficient utilization of SIB's WAN links have reduced capital and operational

expenses. The network has also delivered intangible benefits such as increased

reliability provided by the fully redundant Nortel infrastructure. The security

provided by the Nortel equipment has particularly been valuable for SIB.

"We saved around Rs 1 crore on telecommunication spend. We

have reduced telephone expenditure considerably as the bank has brought down the

number of telephone lines by 2-3 in twelve regional offices. As the project was

successful, we are looking at upgradation as well," Chengath adds.

Says Dhananjay Ganjoo, vice president, Nortel, "Early

adoption of technology is one of the key drivers of growth and innovation in the

banking industry, and SIB realized this very early. It was one of the few banks

that started evaluating different technologies. The bank went through a very

stringent evaluation process before choosing Nortel for our Voice, Data and

Security infrastructure way back in 2001. With our expertise in these domain,

today we are glad that Nortel has helped SIB build a secure, reliable and cost

effective network across 500 branches."

"Data privacy is very important to any bank, and was a key

requirement in our move to embrace VoIP technology," says AG Varughese, DGM

(IT), SIB. "Nortel's broad range of security solutions has proved an

excellent fit for our data protection requirements, helping us meet corporate

governance objectives and raising the bar in India's competitive banking and

finance industry."

The secure data environment has been so successful that in

September 2006, it was recognized with a special award from IDRBT (Institute for

Development and Research in Banking Technology), the technical arm of the RBI.

This nationwide award for which SIB beat public, private, and foreign banks

recognized the innovation of the joint effort of SIB and its technology partners

like Nortel.

Future Look



With a robust infrastructure already in place, the partnership between SIB
and Nortel continues to expand.

The bank is in the process of looking for advanced technology,

which will enable the current infrastructure to implement high-end firewall

functionalities to prevent any potential threat. It is learnt that Nortel Secure

Routers supports and delivers the desired results in this score, and the bank is

in the process of evaluation of the same.

Executing a major overhaul of communications infrastructure is

never easy. However, SIB's strong technological experience has helped it

embrace cutting-edge Nortel communications technology.

The result is a faster, more efficient, and less error-prone

network that delivers the cost savings of VoIP, and security. In the long-term,

this network will provide a solid technology foundation that will continue to

support SIB's expansion across the country and the world.

Baburajan K



baburajank@cybermedia.co.in