technology as differentiator - chandrasekhar

Treasury

International

Nasscom & Economictimes.com2004 India CIO Summit

V. ChandrasekharGeneral Manger (IT) &

Chief Technology OfficerBank of Baroda

31st August 2004

Technology as Differentiator: Evaluation & Integration

InternationalTreasury 2

Agenda

• IT Spending Trends• Business Drivers• Technology as differentiator in Business• Business Impact• Evaluation • Integration


2003-04 IT Spending Trends• The BFSI sector accounts for the largest share of the domestic IT market• IT spending by the BFSI sector increased by 18 percent to Rs. 60 billion (US$

1.24 billion) in 2002-03.

Demand ranged from • General software and hardware to specialized softwares to connect ATMs, and

enable Internet and phone banking. • CRM technologies as part of their marketing efforts to deliver better customer

satisfaction. • Increased competition from foreign banks forced PSU banks to upgrade their IT

infrastructure. • The BFSI segment will continue to contribute significantly to overall IT spending

in India. • This will be boosted by the increase by banks on electronic transactions.• RBI’s guidelines on the implementation of real time gross settlement systems

(RTGS) and implementation of the New Basel Capital Accord will also result in banks adopting new IT technologies

Source : Nasscom


Business Drivers for IT Spends

• Cost competitiveness • Legal & regulatory compliances• Increase quality of products and services• Agility to change in sync and drive market• Enterprise Risk management• Emerging competitors• Business consolidation• Increase Customer relationship value• Customized products development & deployment


Competition in BFSI - India

• PSU vs PSU• New age private sector banks• Financial institutions converting to Banks• Entry of new players in the Banking segment

(YES Bank, Kotak Bank)• Concept of Universal financial services

provider• Government vision for the financial industry• Financial Innovation – Securitization ….


BFSI – Legacy Mindset

• Banks Never used Technology for its Business Transformation or Change

• Technology was used for accounting, Back-office etc not for products / services for customers

• The Banking Laws did not support technology implementations

• Manpower issues


Why Technology is a differentiator ?

• Some have implemented technology and some have not

• Technology benefits– Lowers cost of servicing– Improves quality– User friendly deployment– Complex setup but manageable– Real-time deployment & scaling


Technology as Differentiator

• Transforming Banking experience for the customers– Online product delivery– Anytime, Anywhere– Customized product delivery– Meeting customers needs through cross-

sell, upsell, activation, Usage, retention– Enabling various channels as touch points

for consumption of services


Technology as Differentiator

• Transforming Banking for the Bank– Centralised networked deployment– Deployment of enterprise class systems– Seamless integration of all silo based systems– Improving efficiency of back end systems– Efficient Monitoring, Control & Management

systems– 24x7 operations


Technology as Differentiator – high impact implementations

• Business Strategy first• Aligned Business and IT Strategy • Synchronization for Active

implementations


Technology as Differentiator – Business Impact

• Moving customer transactions to ATM, Internet

• Utilization of low cost channels for servicing

• Back-end processing centralised at Hubs

• Freeing Branch resources for marketing

• Utilization of low cost channels for servicing

• Centralised Shared Services lowers operation cost

• Branches becomes organic growth engine


Evaluation considerations• Realtime 24x7 processing• TCO as the benchmark• Service Oriented Architecture • Process Based-systems providing Business

process automation • Proven technology platform for critical

transactional environment• Newer technology for delivery • Invest in enterprise class web based

solutions


Evaluation

• Compliance • BCP & Security an integral part• Invest for scalability• Select standards based products• Operate in a single IT environment• Don’t do it all yourself


Integration

• Integration to achieve STP environment for transactional systems

• Integration for exchange of business data across business units

• Integration of transaction and analytical systems

• Integration to provide real-time operations• Multi-channel Integration• EAI, XML, Webservices technologies


Implementation models

Insourcing vs. OutsourcingPurchase vs. ASP model


Implementation

• Well – defined technology strategy to support business growth at incremental cost

• Use technology as heart of innovative strategy

• Creation of world class computing infrastructure

• Learning culture• Imbibe Service culture


People

• Implement governance structure• Non-critical functions outsourced• Focus on building skill sets and retain • Create entrepreneurial insights


Where Technology is ubiquitous - Differentiator will be only Customers


The Future

Winners will be those organizations that can adopt new web enabled technology quickly and enable high levels of reuse

Getting it right means• Economies of scale• Open systems• Reusable systems


Summary

• Technology is a differentiator in the short time

Treasury

International

THANK YOU

technology as differentiator - chandrasekhar

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