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Yes Bank, one of the leading new age banks, has become a full service bank across all segments of customers, be it retail, corporate or SMEs, thanks to its aggressive adoption of latest technologies. The governance model that it has evolved ensures that business have a key role in determining what technology gets implemented. Rahul Gupta of Voice and Data spoke to CIO of Yes Bank, Aditya Menon on their IT an telecom strategies. Excerpts of the interview:
Banks have always led the way when it came to thinking of new ways to use IT and telecom infrastructure to bolster the bottom line. Do you think telecom tools have become mission critical in the entire process?
Absolutely. Yes Bank's adoption of MPLS has allowed us to leverage a unified network to deliver voice, data and video seamlessly throughout its branch network. This enables a new way of working, and supports centralization of operations with a distributed workforce, thereby using technology as an effective differentiator. Apart from this, we have usual telecom tools that help us provide seamless connectivity in all our branches.
Most CIOs are aware that telecommuting involves serious security risks. But is there anything about protecting an extended network that even security-conscious CIOs might not know?
Our investments in technologies mitigate such risks. This has been done by ensuring that strong encryption and authentication protocols, including two factor authentication, are used to open communication sessions with any host applications, even remotely. The effective use of VPN technology minimizes such security risks of telecommuting. Also it's imperative in banking to have proper security appliances in place. As we have just forayed into the banking segment, we have robust security appliances in place to overcome any issues related to it.
Given the IT industry's not so good reputation about delivering on business promises, would you tell us how IT managers like yourself create a more efficient and trusted IT infrastructure. Where do you feel Yes Banks' IT sits on this issue?
Yes Bank's ability to use technology as a business enabler has been a foundation for the establishment of the bank, which is evident by the quick market traction that the bank has achieved. It has enabled Yes Bank to become a full service bank across all segments of customers, be it retail, corporate or SMEs. The governance model that we have evolved ensures that business has a key role in determining what technology gets implemented.
What are the constituents required to bring efficiency into the entire IT and telecom infrastructure in a bank?
Careful planning, correct choice of vendors, and a strong vendor governance model provide us the means for efficiency in our fairly revolutionary approach which favors outsourcing to best of breed providers. We have done all this to provide best services to our customers and will continue to do so. We choose vendors after proper evaluation and that's the reason we have been able to provide the best customer service.
Some of your peers at other banks have resorted to outsourcing to ensure they stay focused on those wider goals. Others have brought IT completely in-house for the same reasons. What's your bank's position on this?
Yes Bank is already well characterized in the market for its novel approach to IT outsourcing. In consultation with Gartner, we evolved a strategic outsourcing model, which has resulted in a total outsourcing arrangement with Wipro, which also includes asset outsourcing. This has enabled the bank's IT team to remain strategically focused while enjoying the benefits of a specialized outsourcing partner, which provides us with quality service. Similarly, the outsourcing of our ATM network, mobile alerts, and real time quality monitoring of our Internet banking service are notable examples.
What's your take on IT governance in the banking sector?
The IT governance model in banking requires active participation of business and product management. Attention should be paid to gauging the customer efficacies of any given IT strategy. Ultimately will it benefit the customer or reduce operational cost? We must constantly look towards our peers for examples of how to do it right. To improve the efficiency and effectiveness of technology, banks should look at the way market leaders handle applications, infrastructure, outsourcing, and vendor management and adopt these best practices. We have used consulting firms to bring these best practices to the bank.
How can CIOs help their companies handle the myriad risks?
Any mature organization will invest in a dedicated risk and compliance department-just as we have. The CIO's role is to ensure that IT supports the implementation of enterprise risk management systems such as BASEL II. Operational, market and financial risks-all need to be addressed. The ingredients for this include a good data warehouse and business intelligence platform. Security threats can be mitigated by adopting BS7799 or ISO27001. This calls for over 100 logical and operational controls to be put in place and monitored regularly.
What are the technological challenges before the banks in India?
India with its huge populace and burgeoning middle class places the challenge of scale on technology. The big challenge is going to be an effective penetration of rural and large agrarian markets while ensuring that transaction costs continue to drop for these consumers.
Are convergent services being taken seriously by banks in India?
We have certainly taken the first step by implementing an MPLS network to provide converged voice, data, and video while providing for a unified telephony architecture for our branches and contact centers alike on VoIP. Convergent services have become part of the bank's core technology deployment. It has been taken quite seriously in the banking environment.
How important is unified communication for banks in India?
It is vital, particularly in the ability to reach every segment of society. Lower communication cost translates into an ever-expanding branch and ATM footprint while also supporting direct banking channels. It is imperative to have proper communication network in the banking industry, and unified communication is the best source.
Which technologies are going to be key drivers in the banking industry in the coming days?
The technology that helps create a unique customer experience while making it more secure for the customer to interact will be important. Some of these include remote advice in branches using voice and video, mobile applications, advanced function ATMs including check imaging, assisted self service – collaborative tools, tablet PCs for queue busting at branches. Others include wireless networking at branches and ATM locations, speech and voice technologies for better customer service and even voice biometric for customer identification, remote deposit and payment capture, real-time analytics, foot-fall analysis (Queue Analytics), customer experience management – holistic customer view across all channels, document management/imaging at branches-reduction in cycle time for loans and two factor authentication for increased security.
How much do you rely on service level agreements by service providers?
We have a very strong vendor governance model so much so that we even used Gartner to assist us with assessing industry best practices for SLA contracts. We have monthly and quarterly reviews and real-time dashboards to assess vendor performance and conformance to SLAs. If one has a proper vendor governance model in place then things move out smoothly and problems don't exist. We have been operating quite smoothly and have had no problems from vendors till now.
Source: Voice & Data
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