'We'll connect all branches by March 2009'

How is IT and the networking technology helping the

banking sector improve productivity?



Till recently, banking was looked at as a “Brick and Mortar

activity”.  In other words, people

always associated the business with a particular building or location, popularly

known as the 'Branch'. As technology developed, particularly in

communication and networking, it became possible for people to transact business

from any location.  It will not be

out of place to say that our country picked up the benefits of technology much

later than the advanced countries where technology adoption in banking was quite

rapid.  In India also, technology

adoption by foreign banks and new generation private sector banks has happened

at a much faster pace than the public sector banks.

Technology helped banks cut down transaction processing time and also, they

are now able to offer front-end self-service delivery channels to their

customers.  And, front-end delivery

channels help reduce infrastructure cost for banks. According to a research, if

the cost of transacting in a 'brick and mortar structure' is $1, it is less

than 50 cents at an ATM and less than 20 cents through the Internet.

Technology also gives a lot of empowerment to employees, which in turn

leads to increased productivity and consequently to increased profitability for

an organization.

Why do you say the PSU banks are slow at adopting

technology?



The public sector banks differ in their characteristics from foreign

banks and private sector banks to a great extent.

Substantial social responsibilities are cast on PSU banks.

The spread of branches is very large and highly dispersed.

Logistics and cost, therefore, become prime issues in adopting

technology.  Further, the public

sector banks are also subject to compliance with various government agencies and

RBI guidelines.  This leads to a mix

of complex processes within these banks and, hence, the time taken for

finalizing technology implementations is also large.

However, it is obvious that now PSU banks are also adopting technology at

a very rapid pace as can be seen from the large number of branches on CBS, large

number of ATMs, Internet banking, phone banking etc, and a variety of payment

services.

How is technology helping in creating more value for

your company? 



Banks today have developed a high retail focus, which requires

meeting customer expectations and customer demands through a variety of products

and services differentiation.  Adoption

technology helps banks in not only better understanding customer needs but also

in expeditious development, and offering structured products and services.

Besides, technology also helps banks to suitably 'tailor' their

existing products, based on individual customer expectations.

In the context of the telecom and networking needs

of the BFSI, what are the major concern areas?



Today, there are a large number of service providers in the telecom

and networking market.  Yet, the

major concern of the industry continues to be the stability and reliability of

the network.  Signals dropping down

on links, continues to be a major area of concern since it directly impacts

customer services.  The telecom and

networking needs of the industry are galloping at a rate much faster than the

service providers can manage.

What benefits do you expect from wireless for your

organization? 



Although wireless as a telecom utility, has not quite picked

up as some other modes have, it is critical in situations where it is not

feasible to have leased line or ISDN connectivity due to poor infrastructure.

Public sector banks have a very large network of rural and semi-urban

branches as part of their social obligation.

And rural branches in very interior locations, have infrastructure

issues. In such areas, it is practically impossible to have standard modes like

leased line or ISDN. Here, wireless can be an option to link branches to bigger

centers and facilitate implementation of technology.

With this kind of technology, it may be possible to even offer some kind

of channel banking facilities to rural people.

When do you plan to achieve 100% inter branch

connectivity?



Our bank plans to connect all branches, with the exclusion of those

which are at very remote places, by March 2009.

If the wireless technology makes advances by 2009, we may examine

establishing connectivity to the rural branches also, after 2009.

Technology is useful to the customer as it enables him to bank from

'Anywhere, Anytime', notwithstanding the place where he might have

originally opened his account.  He

will also have access to a variety of products and services and delivery

channels and be reasonably assured of faster service time as compared to

traditional methods.

Sonia Sharma



sonias@cybermedia.co.in