The Hindu Business Line : Taking tech route to growth

In the current flat world, the ability to provide financial solutions on a multiple delivery channel assumes greater significance and has indeed been redefining the notions of competition and customer satisfaction. With increasing competition, time has now come for recognising technology as a driver of growth and customer satisfaction, according to experts.

The banking industry has been highly sensitive to the technology factor especially from the last one decade. When it comes to IT initiatives, there has been a tendency to see the quantum of investment as a measure of keenness of a particular bank in taking to IT. However, investment alone cannot ensure a safe-sailing for a bank and there are other vital aspects as well, according to experts. “What we should remember is that an ever-increasing IT allocation is not the solution to achieve operational effectiveness through IT," observes Mr K Ramakrishnan, Chairman and Managing Director, Andhra Bank.

In fact, investment in IT should actually be seen in terms of cost benefit. “The cost of not investing in IT is much more than investing in IT. Do we budget for electricity or water? I feel that IT expenses should also be seen in similar perspective,” he feels.

‘Me too’ syndrome

Mr Amitabha Guha, Managing Director, State Bank of Hyderabad, also points out that in an industry that suffers from ‘Me Too’ syndrome, it becomes mandatory for a bank to offer products based on hi-tech platforms. “The end-goal of all these initiatives is superior customer satisfaction. Irrespective of whether a customer needs a particular add-on tech feature to a product or not, we need to build new products on superior and customer-friendly technology platforms,” says Mr Guha.

All this means an ever-expanding role of IT in providing end-to-end financial products. With many banks going beyond traditional banking products and incorporating a whole range of financial solutions such as MFs and insurance products, they now see the need for IT tools in business process management coupled with service-oriented architecture.

While BPM provides a holistic view of a customer profile, SOA would offer plugging in of new services and to build products.

Another fast-catching up arena is mitigation of operational risk through IT. Operational risk is one of the three major risks that banks face. These are market risk, credit risk and operational risk.

Mr Tushar Chopra, Managing Director of ATS Services, says, “Operational risk is the dark horse of the risk trilogy - banks are beginning to focus on this area, which goes beyond compliance and fundamentally relates to balancing risk with operational cost.”