The present-day technology-aided banking delivers not just the traditional banking benefits but also provides much greater access to information on their account status and the various services on the offering from the bank, says Samuel Joseph, Chief Technology Officer & Chief General Manager, ExportImport Bank of India, in conversation with Harshal Desai of Elets News Network (ENN)
What role does a CGM-IT play for business development of a financial institution?
The banking industry is in the midst of an Information Technology revolution and banks are now becoming a one-stop supermarket. The focus is shifting to Class Banking, even in Mass Banking, with the introduc – tion of value-added and customised products. Technology allows banks to create what looks like a branch in a busi – ness building’s lobby without having to hire manpower for manual operations. The branches are run on the concept of 24X7 working, made possible through the use of telebanking, ATMs, internet banking, mobile banking and e-banking. These technology-driven delivery channels are being used to reach out to maximum number of customers at lower cost and in the most efficient manner.
In this backdrop, the technology officers play a very critical role by putting both the banks and the customers in a win-win situation. The effective implementation of right technologies has enabled technology officers to bring multiplier effect on growth and development of banks.
How do you view tech implementation by the Indian financial institutions?
This explosion of technology has changed the banks from paper- and branch-based banking to digitised and virtual banking. In the present scenario, it is difficult for any financial institution – whether big or small – to remain isolated from what is happening around. For financial institutions (FIs) in a country like India, such isolation is nearly impossible. However, the requirements of FIs are different from banks due to the nature and volume of business, focus on specific segments, spread of branches, etc. But many a time, unavailability of right technology hampers their operations. CTOs and GMs of FIs have accepted the challenge and are increasingly spending on technology front to cater to the requirements of both FIs as well as customers.
For example, Exim Bank was finding difficulties in identifying an off-the-shelf technology for some of its critical business processes, but finally implemented a CBS software, which is being used by many commercial banks in combination with some modules and customisation of some others. By transforming to a more automated and technologicallyfocussed environment, the Bank has been able to repurpose back-office personnel to other more value-generating projects. This has resulted in improvement of efficiency in all aspects of business, such as risk management, security, reporting, data, etc. I am sure that every FI is using the hybrid approach to implement the best-fit technology.
What technology has been adopted for internal operations within your institution?
The Exim Bank has adopted the hybrid approach for automation of internal operations. Post implementation of CBS, internal operations were targeted, and in order to make full use of CBS, the Bank took lead to become the first FI to implement RTGS and NEFT facilities. All these initiatives resulted in successful re-engineering and automaton of various manual redundant processes, which were not only time consuming but were also preventing the Bank from scaling its operations. Bank targets off-the shelf products and instead of customising the systems, Bank has tried to modify the internal processes to adopt the system.
Many a time, unavailability of right technology hampers FIs’ operations. But now CTOs and GMs of FIs are making increasingly higher spending on technology
What kind of challenges do the convergence of social media, mobile banking and cloud pose for the banking sector? The convergence of social media, mobile banking and cloud is shifting the banking system from traditional banking to relationship banking. Traditionally, the relationship between the bank and its customers was on a one-to-one level via the branch network. The role of head office was limited to monitoring of performance and set the decisionmaking parameters, but the information available to both branch staff and their customers was limited to one geographical location.
But now, banks cannot rely on its branch network alone. Customers are now demanding new and more convenient delivery systems and services. The convergence is playing a dual role for the customer: these are not only providing the traditional banking services but also offering much greater access to information on their account status and on the bank’s many other services. Though it is helping the banks reach a wider set of customers, it puts additional pressure on the delivery mechanism of banks to remain up and running 24X7. Further, the convergence of all this has also given rise to the issues of privacy and confidentiality of data.
How are you addressing those challenges?
The convergence is going to become deeper and will hold key to the future of banking, and going forward, banking achievements will not be possible without IT revolution. So, the Bank is working on both fronts — on the one hand, it is boosting IT systems to enhance customer experience, and on the other, it is using the social media to gather more insight about customer, identify the potential risks, enhancing the global reach and launching new products.