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
Why do you say the PSU banks are slow at adopting
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
How is technology helping in creating more value for
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
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
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