Cheque Truncation is the growth driver: Newgen

Chethana Gadiyar of Data Quest explores banking technologies in an interaction with Punit Jain, VP, Newgen Software

Data Quest:What has been the major growth driver for the company?

Punit Jain: Cheque Truncation System (CTS) or the image-based cheque clearing system has been our the major growth driver for the company. Central banks of many countries like India, UAE, and Saudi Arabia have made CTS mandatory, which in turn has worked in our favor as most banks have opted for our solutions.

DQ: How different is Newgens CTS from the traditional system?

PJ: We have sevaral banking solutions We have developed the CTS on a BPM platform, and have added all functionalities that make it flexible. Thus, the user has an advantage of making any changes as per his business requirements. Further, the same technology can be made use of in many other operations like retail banking, trade finance, and credit card as against traditional system which can be used only for cheque truncation. Thus, private sector and progressive banks have found our solution interesting as they also want to use the solution for various purposes. In addition to complying with the RBI mandate, they wanted to apply this solution to others that would in turn increase their RoI.

DQ: How favorable is the Indian market when it comes to adopting new technologies?

PJ: The entry of MNCs has given impetus to the Indian market growth as they get newer technologies. MNCs are ready to adopt software solutions that will help them grow faster and also open branches in less time. Basically, their idea is to have branches that focus only on sales and marketing with less manpower.

On one hand, bigger market size is attracting these MNCs to set shop in India, and on the other competition has made it imperative to adopt solutions that will give them a competitive edge.

DQ: What is the status of upgradation from Basel I to Basel II by banks?

PJ: Even though RBI has fixed a deadline for banks to upgrade from Basel I to Basel II, it is not very strict about it. Thus, it is taking time for banks to adopt it. The adoption rate is not that impressive as not many banks have opted for compliance solutions. On our part, we are going to the banks and trying to convince them to upgrade for compliance solutions.

DQ: Has the Sinosoft partnership reaped any benefits? What about your partnership with HP?

PJ: Unfortunately, the partnership with Sinosoft has disappointed us. We entered into the agreement with a lot of expectations, but they havent done their sales and marketing actively as yet and are still getting trained. HP has been a good partner for us for many years.