Digital banking initiatives of public sector banks (PSBs), which are in the process of being merged, are likely to be delayed pending integration of core banking platforms.
According to bank officials in the know, though the merging banks operate the same core banking systems (CBS), differences in versions would take around 18 months for complete integration.
“In digital banking, the API (application programming interface) is plugged to the CBS platform for seamless operation since all the customer data is sitting on the platform. When these CBS platforms are going to be merged, there is no point of coming up with a new product before the integration,” said a senior official familiar with the digital banking.
“If there is any new API launch, the bank will have to plug it to its own CBS and migrate it later. It will depend on the compatibility of the application,” the person said.
Services like instant account opening, internet banking, mobile banking and virtual welcome kit, among others, are part of the digital banking initiatives.
Even some PSBs have started disbursing loans to new clients through these app-based platforms.
“We have to merge multiple APIs working on a similar service segment into a singular application. To achieve this, we are evaluating the features of both banks,” said another official of a bank that is in the process of merger.
As part of the consolidation of public sector banks, the central government had in August announced mergers among these lenders. The merger, which will take effect from April 1 next year, will bring down the number of PSBs to 12 from the earlier 27.
While United Bank of India and Oriental Bank of Commerce will be merged with Punjab National Bank, making the proposed entity the second largest PSB, Syndicate Bank merge with Canara Bank as part of this exercise. Similarly, Allahabad Bank will be amalgamated with Indian Bank, while Andhra Bank and Corporation Bank will be merged with Union Bank of India.
Though technology platforms played a major role in deciding the merger plans, bank officials said that the complexity of the process could be higher despite the merged entities using the same core banking platforms.
For instance, though both Canara and Syndicate banks use Oracle’s i-Flex (which is now known as OFSS), the versions of the software are different. While Syndicate Bank is currently using the latest version (11.6), Canara Bank is using 10.2 version.
Similarly, though Union Bank, Andhra Bank and Corporation Bank use Infosys’ Finance as CBS, the versions are different.