Banking on IT, literally

It's a known fact that IT and the BFSI segment go hand in hand. H Srikrishnan, Executive Director, Yes Bank comments on the importance of IT at Yes Bank in particular, and the BFSI segment in general.

All modern organisations, especially those in the services industry, need technology as a fundamental pillar. No organisation in any segment of the industry enjoys a position that is free from competitive pressure. In such a milieu, organisations must adopt a dynamic approach particularly with respect to customer satisfaction and service. Cutting edge technology enabled business is increasingly becoming commoditised as rivals are adopting the same technology. Thus a culture of operational excellence and continuous innovation supported by IT is required.

For larger organisations, consolidation, shared resources / infrastructure and centralisation all require IT enabled process change and change management. For new organisations such as Yes Bank, IT offers the ability to leapfrog competition to establish a highly differentiated positioning, as the attempt is not to just catch up. It also helps organisations cope with and manage scale faster.

Finally IT enabled business innovation can ensure that the organisation benefits from what IT can bring. FedEx, Wal-Mart and Dell are all examples of organisations that use IT as an influence on a business model. Today any organisation’s strategy would be incomplete without strategic inputs from IT. It is no longer about networks, servers and PCs.

IT and the BFSI segment

There is a defined horizon based on how BFSI leverages IT. On one side of the scale are those organisations that use IT as a business enabler. They benefit the most. At the other end are those organisations that spend a considerable amount on IT without necessarily seeing the benefits. Finally sandwiched in between are those that use IT for business transformation.

In the Indian context, we can see parallels in the way new banks such as ours, established private sector banks and lastly, the monolithic public sector banks function. All institutions in BFSI have similar requirements in that they require transactional platforms, manage large front and back office operations and also require providing customer service. Therefore apart from the commoditised applications such as insurance, core-banking or treasury and fund-management systems, there is a great deal of differentiation in the way that operations and services can be structured based upon the IT implementation.

The quality of IT applied to these areas is the key to success for organisations in the BFSI space. We believe that focussing on core activities and outsourcing peripheral ones gives us a competitive advantage. We have pioneered total outsourcing in the Indian BFSI segment.

IT@Yes Bank

As a new generation bank, Yes Bank has the advantage of accessing the latest available technology. The bank has outsourced a significant part of its technology infrastructure and hardware requirements. This is believed to give us an advantage over other banks using traditional legacy systems and in-house processing.

Gartner advised us about adopting global best practices and a technology roadmap. We were awarded ‘IT Innovators in Emerging India’ by Nasscom in April 06. The award was in recognition of Yes Bank’s adoption of innovative technologies for increased customer satisfaction and for improving process efficiencies. Some specific examples have been our pioneering launch of RTGS (Real-Time Gross Settlement) over the Internet as well as two-factor authentication and a single pin concept all of which have had a direct and beneficial impact on our customers.

We have been successful in forming a high-powered technology team that has been able to deliver a complete banking platform comprising Core Banking, Integrated Treasury & Risk Management Solution, Internet Banking for Retail & Corporate, ATMs & Switch, among others, in a short time-frame that established system integrators have not seen.

Yes Bank’s initiatives

Our technology and product platforms are state-of-the-art to deliver solutions that take into account the present and future needs of our customers. It is our constant endeavour to provide solutions to improve customer confidence, offer convenience and provide a reliable and user-friendly experience.

Through IT-powered innovations such as a single PIN across channels we are able to make life easier for the end-user. The use of two-factor authentication using a mobile device has made it safer for customers to interact with the bank. Other innovations such as launching Wi-Fi in our branches have been instrumental in driving customer satisfaction. We continue to innovate with cutting edge technology. RFID is being piloted for deployment at our branches in the future.

The rapid deployment of Core Banking coupled with Internet and Mobile Banking, Treasury, Cash Management, Wealth Management along with key innovations has been a testament to the banks ability to leverage IT for business advantage.

Streamlining IT and business

The foundation for the Technology Governance Model was laid out from the inception of Yes Bank by institutionalising technology as one of our core pillars of differentiation. This helped align technology with business from day one. The complete roadmap for the Technology Governance Framework was laid in consultation with and on the recommendation of Gartner Consulting.

Technology Governance being one of the founding principles of organisational design at Yes Bank, the acceptance and adoption of this model was well received and supported by technology and business teams.

Today, we have a well defined governance committee and programme / project management office which helps in timely and effective implementation of various technology projects.

Yes Bank and the CIO

The CIO’s role is to provide business leadership through technology as we build our bank, specifically in the areas relating to businesses such as Retail Banking, Corporate and Investment Banking, Capital Markets and Treasury.

The role calls for the innovative deployment of technology to ensure that Yes Bank can leverage business benefits through affordable investments. The deep relationship with business, the business solutions group, vendor management and IT governance are other key functions of the CIO’s role here. With our extensively outsourced model, forging a strategic relationship with vendors into a true partnership is a key facet of the CIO’s role.

Coming up

The IT roadmap calls for innovative adaptation of technology to ensure that we continue to differentiate and support an agile organisation through the strong support of customer-focussed business processes.

This will extend into Business Intelligence and Data Warehousing, Basel II Credit and Operational Risk, Anti-Money Laundering, Credit Administration, Retail Lending, Depository Services, state-of-the-art HR and Fincon solutions with strong support for employee self-service and a host of other enterprise-wide initiatives.

Additionally, the primary task of building and fitting out 35 more branches as well as two central processing centres, including a contact centre before the close of the financial year represents the challenging list of systems to be implemented.

The future of Indian banking organisations

The challenge and the opportunity lie in converting the largely unbanked sections of our population into a thriving market for banking and also leveraging a combination of financial service offerings including mutual funds and insurance. This inclusion will benefit both the populace and banks.

In order for this strategy to succeed there is the need for IT to help reduce the cost per transaction, which today is certainly a barrier against entry to these markets and geography. IT can also be used effectively to service widely differing segments of our economy. Highly customised private wealth management is an important area. So is Asia’s fastest growing pool of private wealth. Supporting diverse grass root micro-finance organisations in their quest to extend credit to both urban and rural sections of society is another important function.

The Indian banking industry is providing an excellent competitive playground for IT vendors and banks alike to innovate and differentiate as income swings away from deposits to fee based transactional revenue. Either way it augurs well for the consumer.

– As told to Rishiraj Verma