Banking on IT, literally
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 organisations
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.
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 Banks 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 Banks initiatives
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
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
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
Yes Bank and the CIO
The CIOs 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 CIOs role here. With
our extensively outsourced model, forging a strategic relationship with vendors
into a true partnership is a key facet of the CIOs role.
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
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
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 Asias 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
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