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Banking Automation

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CIOL Bureau
Updated On
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By Smitha

The good performance across board in the banking sector is likely to further

increase the imputes on technological deployment. The focus among public sector

banks will b on improving process and branch automation and networking. The

private sector banks being a much later entrant do not have the baggage of

legacy systems or age old processes. Most of them started out as computerized

but niche organizations. The focus here will be on widening its reach.

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Focus Public

Sector Banks

All major public

sector banks have set aside budgets for technology upgradation.

SBI plans to computerize its entire branch set up by Dec 2004. Other than

this it plans to set up larger networks and bring about greater automation. SBI

has over 9,036 branches. It has fully computerized 1,300 branches in the period

April to October 2003. Overall 6,037 branches have been computerized. SBI has

allocated an amount of approximately Rs 800 crore for this purpose.

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State Bank of Hydrabad has plans to computerize all its 897 branches and 108

extension counters by December 2003 and to network at least 80 percent of the

branches by April 2004. With this in mind it has set aside an budget of Rs. 150

crore. The bank plans for complete connectivity by Dec 2005. Other major areas

that the bank is focusing is on core banking solution and increasing its ATM

network size.

Punjab and Sind Bank plans to increase the number of fully computerized banks

from 37 to 100 by March 2004. At present 73.59 per cent of the bank's total

branch network is computerization and this accounts for 83 per cent of the

bank's business. It also plans to set up 25 ATMs in the next one year.

Punjab National Bank has computerized 3,166 branches out of its total 4,400

branches. It has implemented Centralised Banking Solution in 218 branches and

plans to increase this number to 500 by April 2004.

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UCO bank which has over 1,700 branches plans to computerize 1,100 branches by

March 04 and achieve complete computerization by Dec 2004. It plans to implement

a core banking solution in the next one year and to add 150 ATMs by March 04.

For all this purposes the bank has set aside a budget of Rs 200 crore.

Union Bank of India has budgeted Rs 150 crore for technology implementation.

It plans to computerize its branches and network at least 500 of its major

branches.

State Bank of Mysore plans to computerize all its 615 branches by June 2004.

At present 350 branches has been computerized. In the same period it will

network 300 of its major branches. The bank has set aside an amount of Rs. 60-65

crore for this purpose.

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Private sector Banks

Private sectors have been lucky as they have come up during a period when

computerization was the way. So right from the beginning their connected

networks have been in place.

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The problems faced by these banks have more to do with lack of reach and

retention of customers. ATMs and Internet banking solved the issue of reach to a

certain extent. At present these banks are looking at sharing ATM networks to

increase their reach. Almost all the banks have set up call centers so as to

effectively handle customer queries and issues.

The trend in private banks is towards implementation of core banking

solutions and business process management. Core banking solutions are not a

phenomena limited to the private sector banks alone. Public sector banks are

also implementing this solution is a large way.

Banks like ICICI, UTI and ABN- Amro are implementing BPM solution so as to

improve operation as well customer focus.

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With the roll out of RTGS by Reserve Bank of India this is another hot area

of technology implementation. The other areas which are currently being perused

by private banks include mobile banking, data warehousing, data management and

credit risk management.

Solution Vendors

There are a large

number of players providing technology solution to the banking players. Some of

the prominent players are:

  • IFlex
  • Infosys
  • Wipro
  • TCS
  • Datamatrics
  • PCS Industries
  • NCR

With the banking sector growing leaps and bounds and most of the product

offerings from competitors virtually being mirror images of each other

technology and its ability to enable better customer service and innovation has

become a key factor distinguishing banks. Tighter regulatory controls and

international requirements is driving technology implementations like never

before.