The current set of consumers for the banks are more technologically aware.
Customers today consider services and facilities such as Internet, ATM, phone
and mobile banking as essential part of the banking experience.
This calls for channel aggregation, which Kunkalienkar, CEO, ICICI Infotech,
believes would be possible only through complete automation. However, Tripathi,
MD, Infrasoft Technologies feels that delivery channels like mobile and Internet
banking would not really take off to the extent expected in 2004 because banks
are yet to experience profitability through these channels.
He even goes to the extreme and predicts that IT spending on these
technologies would be less than 10% of the overall software spend in the BFSI
sector in 2004.
Convenience through Integration
However, in the long run convenience banking would be the answer to several
of the delivery woes. Convenience banking is already the buzzword and very soon
there would not be two ways about it. Even telecom service providers like
Reliance Infocom are tying up with banks like HDFC to deliver mobile ATM
services.
The Final Take |
|||
Areas |
High Priority |
Medium Priority |
Low Priority |
Core Banking |
– |
Spillover effect of existing projects; TBA to core banking for |
For large private and MNC banks |
Total Branch Automation(TBA) |
– |
Computerization in smaller PSU/co-operative banks |
– |
BI tools |
Large private and MNC banks |
– |
PSU banks, as they are still implementing core banking apps |
Risk Management Applications |
– |
Large banks due to RBI regulations |
– |
Anti Money Laundering Solutions |
MNC and private and large PSUs with overseas business |
– |
– |
RTGS |
All large banks driven by the need for inter-bank payments |
– |
– |
Straight Through Processing |
– |
Primarily for large private/MNC banks driven by SEBI to reduce |
For most PSU banks, little scope of adoption before 2007 |
Business Process Management (BPM) |
Most large PSU/private banks would opt for to streamline operations |
Even co-operative and smaller PSU banks would look for by 2005 |
– |
Security |
VPN, IDS, intrusion prevention for virtually all banks |
– |
– |
Data Centers |
Many large banks for remote infrastructure management |
– |
– |
Mobile/Internet Banking |
– |
Second rung PSU banks would opt for the features |
– |
ATM Network |
Most large banks would go for increase in numbers; more consortiums for |
Indian-condition specific ATMs would be available for the larger banks |
– |
Delivery channel Integration |
– |
Channel aggregation yet to catch up because most banks yet to find it |
– |
Mahesh Prasad, president, applications and Solutions group, Reliance Infocomm
informs that more banks would be added to these services which would become
operational by March 2004.
Banks too would stand to gain by investing in technologies that integrate all
their delivery channels. By collating information from different products and
services they get a single, unified view of the customer, thus enabling them to
offer higher levels of service and customized products.
ATM
ATMs are set to become the key battleground on which the battle for
distribution channel supremacy is fought, as banks in India look to beef up
their distribution strategies.
Currently, the country has an ATM installation base of 11,000–a stupendous
increase from about 7,500 a year back. However, Deepak Chandani, country
manager, NCR India, the leading ATM vendor in the country, predicts that though
it might not touch these numbers again, growth would still be significant in
2004-05.
With proliferation of plastic money, Indian banks would go for increasing ATM
installation as banking through ATM significantly reduces the costs from
physical banking.
ATM growth in the early part of 2004 would be uniform across the country. In
south Corporation Bank and Canara Bank would add 600 and 300 ATMs respectively,
Oriental Bank of Commerce would rollout in north, United Bank of India in the
east, and Bank of Baroda and Union Bank of India in the west.
What would happen is that banks would form consortiums whereby they would
have shared ATM network services. Competition is bringing out the best in Indian
banking system and technology seems to be the way banks are bringing out their
best. Till such time the BFSI segment would continue to be the numero uno
spender in the domestic market.