BANKING AND TECHNOLOGY

Today we cannot think of banking services without technology.

IT has become the central cog in whatever banks are doing or strategizing to do in future.

All of us would agree that technology has no longer remained just a means for automating processes.

It has revolutionized every industry in the world by rendering faster and cost effective delivery of products and services to customers, who in the normal course could not have afforded the same.

Technology is the surest and most appropriate way of bringing inclusion in respect of any product and/or service.

Is technology in banks being leveraged adequately?

Technological advancement enables a broader and inclusive banking sector and in the process, is a key driver for the sustained and inclusive growth of the economy.

Technology by itself is not a panacea.

But technology has evolved to such an extent that it can hold the key to achieving goals – if banks are willing to accept the changes that they will need to make to get there.

Banks have implemented Core Banking Solutions (CBS) which marked a paradigm shift in more senses than one and branch customers are now bank customers as they can access their accounts from any branch for defined purposes.

It was envisaged that the CBS would offer new opportunities for information management, better customer service and improved risk management.

However, banks have not been able to reap the benefits of this technology in terms of reduction in costs of small value transactions, speed with which the transactions are done if both successful and unsuccessful transactions are considered, improved customer services and effective flow of information within the banks as also to the regulator.

Banks have not gained in terms of efficiency partly because the much needed business process re-engineering was not done.

Further, banks have deployed technology for transaction processing and the same has not been explored extensively for analytical processing like customer relationship management and decision making.

Thus, there is a need to take care of what we could not achieve in the first round of technology implementation and think beyond CBS.

Supported by the latest technology, banks would need to identify new business niches, to develop customized services, to implement innovative strategies and to capture new market opportunities.

Optimum leveraging of technology would critically hinge upon the following:

1. Skilled resources

2. Supportive HR policy

3. Appropriate IT governance structure

4. Effective business continuity plan

Banks & FIs would require review of the issues relating to recruit appropriate skill, retain then over a longer time horizon by offering them a clear career growth opportunities and supporting enabling process. However, it is equally important to embed inside the management structure a proper IT Governance structure which will also enable the technology strength of the banks to play a supporting role with a degree of assurance and sustainability.