8/13/2019 Conclave 2011

http://slidepdf.com/reader/full/conclave-2011 1/1

BANKING TECHNOLOGY CONCLAVE 2011

In a country of 1200 million Indians,which has only 400 million bankusers, there is an urgent need to en-

sure financial inclusion and greatertransparency, and banking technologywill play a crucial role in driving thischange.

On Thursday, September 8, 2011, keyplayers of the banking industry con-verged at the ITC Grand Central inMumbai to discuss the issues involved inthis transformation, at the fifth edition of The Economic Times BankingTechnology Conclave ’11.

The conclave, ‘Indian Banking 2015:Towards Technology EnabledTransformation’ had speakers dis-cussing a wide range of issues impacting

the sector – the importance of technolo-gy investments, partnerships with theInformation Technology sector, cus-tomer-centricity for higher profitabilityand the emerging frontiers for coopera-tive banks, among other things.

“Information technology in banking isfast evolving,” said a KPMG White Paper,released on the occasion. “From enablingbanking services to driving transforma-tion in the industry, InformationTechnology holds a promise to changethe face of banking in the next few years.New entrants are looking to leveragetheir existing strengths in the Indianbanking arena. The opportunity avail-able to these entrants through leveragingtheir understanding of technologies andmarkets they operate in promises inno-vative business models with a focus on de-livering customer value.” The need toprovide personalised, speedy and cost-ef-fective services is pushing banks to fur-ther reorient and innovate the businessmodel of banking and enabling technol-ogy, the paper adds.

Mr M.V. Nair, Conference Chair man &Chairman and Managing Director, UnionBank of India, highlighted four emergingtrends in banking technology. Mr Nair re-

ferred to an integrated multi-channel de-livery system; financial inclusion; cus-tomer relationship management and ITgovernance. He also spoke of the impor-

tance of green IT initiatives for businesscompetitiveness and cost ef ficiency,pointing out that modern IT systemswere complex and sophisticated, but they

were also “energy guzzlers”.“According to statistics, every watt re-

quired for computer power creates theneed for another watt for cooling,” MrNair said. “It becomes one of the integralparts of Green IT to develop a strategy forimplementation of less paper offices topaperless offices. Initiatives like the so-lar-powered ATMs with which we are ex-perimenting at Union Bank of India maygo a long way towards green technologyin banking”.

The challenges involved in reachingout to last-mile customers formed an in-tegral part of the discussions. SunnyBanerjea, Partner and Head,Management Consulting, KPMG India,pointed out that

thanks to mobilephones and otherdevices, today’s con-sumer had far morecomputing powerin his hand than ithad taken to “getman to the moon inthe 1960s”. However, as most bankerswould agree, customers could not belooked at as a homogenous group, andstrategies for rural and urban customerswould necessarily have to be different.

Shikha Sharma, Managing Directorand CEO, Axis Bank Ltd, pointed out thatwhile the market was a large one, therewere differences in the way the older gen-eration, and the younger one, perceivedtheir banking needs. She also raised is-sues of changing mindsets and workforcetraining for the new era of computerisa-tion.

There is no doubt that the complexworld of Indian banking has already seentremendous change. With many transac-tions taking place through the Internet,

mobile banking and Automated TellerMachines, customers no longer need towait in long queues during workinghours to get their passbooks updated, or

to withdraw money. Even cooperativebanks, which have largely operatedthrough traditional models, have begunto see the need for technology-enabledtransactions; The Greater Bombay Co-op-erative Bank Ltd. for instance, has seenvalue in opening innovative E-lobbyBanking branches, and streamliningtheir systems by achieving ISO 9001:2008certification. “In just 150 sq ft space, wehave seven machines which allow you,among other things, to deposit cash, payelectricity bills and get your passbookprinted,” said Narendrakumar ABaldota, Chairman of the Bank.“Banking is available 24x7 and customerscome in even at 1.00 a.m. or 2.00 a.m. And

the cost is hardly Rs

12 lakh for theseseven machines”.

In June 2010,Reserve Bank of India had asked allbanks to present athree-year financialinclusion plan by

incorporating the government's goal of making banking facilities available in allvillages with 2000 population by March31, 2012. The Government is also planningto leverage the Unique IdentificationAuthority of India (UIDAI) project to fur-ther achieve financial inclusion, a factthat most bankers at the conclave agreedwould make a huge difference.

For emerging markets to move aheadin the global arena, however, there are pri-marily four issues that need attention. Inachieving these goals, banking technolo-gy will certainly make a vital difference,simplifying the banking process, offeringspeed and convenience to the customer inan increasingly competitive era, and alsoplaying a holistic role in financial inclu-

sion. As speakers at the Conclave agreed,while there are many challenges to bemet, the process is certainly gaining mo-mentum.

Expert Speak

“As far as retail banking isconcerned, technology would

help in building confidence at alow cost. Overall, technologywould help to solve complex

trade-offs in the future.”

Today’s consumer had far morecomputing power in his hand than ithad taken to “get man to the moonin the 1960s”. Customers could notbe looked at as a homogenousgroup, and strategies for rural andurban customers would necessarilyhave to be different.

> M V NAIR,Conference Chairman & 

Chairman and Managing Director Union Bank of India 

“Technology is going tomake a big difference in

the future in thebanking sector. It will

bring in efficiency;improve the MIS and

help to make decisionsbased on analytics.

It would be imperativeto deploy the right type

of technology andappoint the right type

of people for the same.”

An Initiative by 

The four panel discus-

sions that took place

ranged from the technol-ogy agenda of CEOs, to the

challenges in connecting the

last mile; customer-centricity

for higher profitability andthe emerging frontiers for

cooperative banks.The first session, moderat-

ed by Sunny Banerjea of

KPMG India, focused on thetech agenda and the impor-

tance of understanding the

varied and changing needs of

today’s customers, from dif-ferent age groups. “How do

we actually analyse the cus-

tomer need or to exactly what

type of product developmenthas to take place will be the

challenge,” Mr M V Nair said.

According to Shikha Sharma

of Axis Bank Ltd. - the rural

market will pose an altogeth-er a different set of chal-

lenges. “The infrastructure

and size of the market is dif-

ferent… so the operating mod-els that you need to deploy

are going to be different,”; M

V Tanksale of Central Bank of

India, pointed out that there is

still a gap in the use of tech-nology by banks and cus-

tomers; Kaku Nakhate of Bank

of America, India, spoke of the

challenge of managing tech-nology in the Indian regulato-

ry framework and synchro-

nizing data globally.

The second session, on con-necting the last mile, featured

Akhilesh Tuteja - KPMG India,

A Krishna Kumar - State Bank

of India, A P Hota - National

Payment Corporation of India(NPCI) and Sreeram Iyer -

Standard Chartered Bank.

While outlining the agenda of

the meeting, Akhilesh saidthat obstacles will be taken

care of. “However, a rule of

thumb would make us get

things done faster”. Mr. Hota

said: “We need to bring in cut-ting-edge technology to build

interoperability and banks

must take the initiative.” Mr

Kumar spoke of the chal-lenges of linking about 12,000

branches to the IT centre, and

the importance of training

staff. Mr. Iyer observed that

there is a huge gap between

cash transactions and the use

of technology.

The third session, chairedby Mr B Sambamurthy -

IDRBT, focused on customer-

centricity. Sharing his per-

spectives on analytics, ArunThukral of CIBIL said, “The

Credit Bureau started giving

credit information report

(about customers), which

used to substantiate andactually add value to the

internal understanding and

portfolio (among banks).

Because how your customer

is behaving internally andhow that behaviour pattern

vis-à-vis other lenders is

what the Credit Bureau actu-ally brings to the table and

helps he banks able to identi-

fy and profile that customer

to their advantage and prof-

itability.” Similarly, highlight-

ing the importance of analyt-

ics, Devesh Mathur of HSBC

India, said that today it is not

there to support a singleevent of selling. “All institu-

tions are increasingly moving

towards life cycle manage-

ment, as far as customers areconcerned. While highlighting

the importance of customer-

centricity for enhancing prof-

itability, A Rajan of HDFC

Bank, said that technologydoesn’t stop with core bank-

ing implementation. “The real

challenge is to find out about

the customer’s needs and

wants and this is where tech-nology steps in.” Similarly, R

K Bakshi of Bank of Baroda,

observed that in the past,personal interaction between

a customer and a banker

meant building a relationship

based on being “straight from

the heart”. Finally, outlining

the session, B Sambamurthy

of IDRBT, said that technolo-

gy can help us in risk mitiga-tion and customer manage-

ment effectively

In the final session on

cooperative banks, the unani-mous view of the panelists on

how cooperative banks are

responding to the new chal-

lenges of embracing technol-ogy was that while it may be

expensive, they had no

choice but to accept the new

way of life. “Unless we do

that,” said Suresh S Hemmadyof The Shamrao Vithal Co-

operative bank Ltd., whochaired the session, “we will

die a natural death”. Satish RUtekar of Thane Janata

Sahakari Bank noted before

cooperative banks had begun

implementing technology in

2005, they had been strug-

gling to survive. Narendraku-

mar A Baldota of The Greater

Bombay Co-operative Bank

Ltd. spoke of the challengesinvolved in changing mind-

sets, including those of the

bank employees, who had to

find new ways to interactwith customers. He referred

to the high cost of real estate

in cities and spoke of the suc-

cess of the E-lobby that theyhad introduced. Rajagopal

Devera of Government of

Maharashtra, spoke of the

committee instituted in 2007

by RBI to see how to get ITinfrastructure for coopera-

tive banksWhile several opinions

were expressed during thevarious discussions, there

was no doubt that every

speaker believed in the

importance of technology and

its impact on future growth.

'MEET THE CHALLENGE'Experts from the banking sector deliberated over the importance of harnessing

technology for better customer service, reach and profitability

A CONSUMER CONNECT INITIATIVE

IN ASSOCIATION WITH STATE BANK OF INDIA

IT DRIVES INNOVATION INTHE BANKING SECTOR

As India moves towards financial inclusion in the banking sector, technologywill play a key role in achieving this goal

> SHIKHA SHARMAMD and CEO, Axis Bank Ltd 

> SUNNY BANERJEAPartner & Head - Management Consulting, KPMG India 

“At the moment, lives ofindividuals depend on cash-based

transactions in the country.Technology will help to bridge the

gap and provide an opportunityto leap-frog in the banking sector.

> SREERAM IYERRegional COO, India and South Asia, Standard 

Chartered Bank 

“A real-time remittance system ormoney transfer for the common

man using mobile phones is afuturistic step. We need to bring in

cutting-edge technology to buildinteroperability and banks must

take the initiative in this regard.”

>  A.P. HOTAManaging Director & CEO, National Payment 

Corporation of India (NPCI) 

“Today, mobile instruments arepicked up by almost everycustomer. These instruments are

going to be the game-changer inthe future. These hand-helddevices will make all the changeas far as technology in thebanking industry is concerned.”

>  A KRISHNA KUMAR,MD and Group Executive (NBG), State Bank of India 

“With technology a lot haschanged. The customer base hasbecome much larger, the footfallsto branches have reduced a lot.We should use all tools to meetcustomer focus.”

> R K BAKSHI,Executive Director, Bank of Baroda 

>>(L to R) - M V Tanksale, Chairman & Managing Director, Central

Bank of India, Shikha Sharma, Managing Director & CEO, Axis Bank

Ltd., Sunny Banerjea, Partner and Head – Management Consulting

Practice, KPMG India, M V Nair, Chairman & Managing Director,

Union Bank of India, Kaku Nakhate, President & Country Head,

Bank of America, India

>> (L to R) - A P Hota, Managing Director & CEO, National Payments

Corporation of India (NPCI), A Krishna Kumar, Managing Director &

Group Executive (NBG), State Bank of India, Akhilesh Tuteja,

Executive Director - Management Consulting Practice, KPMG India,

Sreeram Iyer, Regional Chief Operating Officer, India & South Asia,

Standard Chartered Bank

>> (L to R) - Arun Thukral, Managing Director, Credit Information

Bureau (India) Ltd., Devesh Mathur, Chief Technology and Services

Officer, HSBC India, B Sambamurthy, Director & CEO, Institute for

Development and Research in Banking Technology (IDRBT), A

Rajan, Group Head – Operations, HDFC Bank, R K Bakshi, Executive

Director, Bank of Baroda

>> (L to R) - Satish R Utekar, Chief Executive Officer, Thane Janata

Sahakari Bank, Suresh S Hemmady, Vice-Chairman, The Shamrao

 Vithal Co-operative Bank Ltd., Rajagopal Devera,

Secretary–Cooperation, Government of Maharashtra,

Narendrakumar A Baldota, Chairman, The Greater Bombay

Co-operative Bank Ltd.

13THE  ECONOMIC  TIMES |  MUMBAI |  THURSDAY | 22  SEPTEMBER  2011

ATM

Mobile Banking

Core Banking

4

Contact Centre

Green Channel

Debit Cards Prepaid Cards

Internet Banking

SBI stands shoulder-to-shoulder with the world’sTop 100 banks .

Distinguished as the flag bearer of Indian banking,

we emp loy cutting-edge technolog ies to deliver to

our customers a wide array of contemporary

financial services and products. In the process 

enhancing the trust levels that truly make us

“TheBanker

toEvery

Indian ”.

 ‘ 

24 7 Helpline: 800 425 3800 or 1800 11 22 11 ToIl free fromBSNLIMTNL Lanclines) or 080   26599990 o ther lines)or visit www.sbi .co.in or Email:contactcentre@sbi.co.in

Hungry for better service?SBI usin technology to

feed your appetite