The Hindu Business Line : `Banks yet to realise return on investments made in IT'

MR S.S. RAMAN, President, TVS Electronics Ltd, (left) and Mr B. Sambamurthy, CMD, Corporation Bank, at `Banking Conclave' in Bangalore on Tuesday. — G.R.N. Somashekar

Bangalore , July 18

Banks are yet to fully realise their return on investments (RoI) made in information technology, both in hardware and software.

Speaking at `Banking Conclave' organised by TVS Electronics, the Corporation Bank Chairman and Managing Director, Mr B. Sambamurthy, said here on Tuesday , " The RoIs are not very satisfactory on the large investments made."

One of the major reasons for this low realisation was that the IT infrastructure should be made to address customer segment for deriving maximum value. Besides, there was no seamless flow of the customer information, he said.

"There is a misalignment between IT and business objectives," Mr Sambamurthy said. Consequently, there is a need for creating intermediaries to bridge the digital divide. "We need to improve digital and physical connectivity," he added. He said unless this was done, banks would be missing the opportunity of reaching out to 600 million customers in the country.

Later, speaking on the sidelines, he said the move for consolidation among public sector banks was in the right direction. He said that the mergers would boost economic viability and help banks to venture into uncharted areas. "Mergers do not mean that the public sector banks are not functioning properly. Mergers will lead to economic viability and help in reaching areas where the sector has not made any inroads," he said. He observed that the merger of regional rural banks had helped in concentrating more on consumer service.

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