Fm To Discuss It Strategy With Bankers Tomorrow

Union finance minister Yashwant Sinha will discuss the operational and standardisation issues involved in the software and hardware platforms adopted by the public sector banks on December 5 with select bankers. Indian Banks' Association chairman Dalvir Singh will also be present at the meeting.

Tying up with different vendors and setting up different software platforms may soon be a thing of the past in the banking industry. Bank branches across the country will soon have a standardised software package.

Standardisation of the platforms could also resolve the problems of integration that banks face in case they go in for mergers and acquisitions.

 

With most public banks having surpassed the Central Vigilance Commission's target of computerising 70 per cent of their business, they are now concentrating on the core issue of standardising the software so that branches are interconnected. As part of the IT deployment strategy, commercial banks are now focusing on three key areas - core banking, delivery channels and risk management.

The problem of IT integration is underscored by the fact that lot of integration issues had cropped up after the acquisition of Bank of Madura by the ICICI Bank and the acquisition of the Times Bank by the HDFC Bank.

According to analysts, having similar infotech platforms could also be seen as a facilitator for mergers and acquisitions and strategic deployment of IT will be the cornerstone of future growth and profitability.

Bankers point out that having a proper interface was critical for banks as most of them were in the midst of launching multi-branch banking, anywhere-anytime banking, setting up ATMs at focal points and offering phone/ internet/ mobile banking and electronic bill payment and presentment facilities with a view to offer better customer service and door-step banking.

"The software/hardware integration (hand-shake) between disparate delivery channels has to be smooth. If there are ten vendors and ten different applications running in branches then it will lead to glitches as far as inter-operability is concerned. Herein comes out the importance having a single platform and uniform software," said a senior banker with a public bank.

In this regard the banker said that the choice of IT platform, which is now in the strategic domain, is dependent on viability and commitment of the IT vendor, future-proof architecture and be proven in its applications.

With customer service being the only key differentiator for banks, most banks are reinforcing their back-end by deploying centralised, scalable, new generation core banking platforms to achieve their objectives of providing greater customer convenience, generate income, manage risks better and gain time-to-market advantage.