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RAISING DEPOSITS
ATMs
POS Terminals and Cash dispenser
Corporate Network
Risk Management
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BANKS BUSINESS
INSTITUTE FOR DEVELOPMENT AND RESEARCH IN BANKING TECHNOLOGY
Technology A Differentiator
Technology is indeed a differentiator not only in terms of competitive advantage, but also in terms of administrative and back-end processes. Butdue to rapid technology deployment in Indian banking sector, the haves and havenots gap is all set to narrow quickly.
INSTITUTE FOR DEVELOPMENT AND RESEARCH IN BANKING TECHNOLOGY
Process enabling
Utility to customer
Support Skills
Branch 5
Technology Acquisition
Inappropriate technology purchases can be the root of all problems The Bank management has to:
Give thought to the utilization rate Avoid knee-jerk reactions (they have done itI should also do it) Be impartial in technology decisions (I like that technologyI want it) Understand where the solution will fit AND where it wont! Assess the strengths & weakness of solution And seek answer to are we ready for it?
INSTITUTE FOR DEVELOPMENT AND RESEARCH IN BANKING TECHNOLOGY
Differentiation is attained not achieved just through technology, it is gained in the way the technology is selected, implemented and utilised
Goal definition Integrating business & technology goals Solution features Vendor selection Business process re-engineering Change management Efficient utilisation Customer utility Technology Management Support functions Maintenance Back-ups and Disaster Recovery Scalability & flexibility Learning & evolution
The Opportunity
Regulators have new tools Focus of all recent financial sector reforms Emergence of non-intrusive, focused supervision with a view to prevent frauds and disturbances to financial stability
INSTITUTE FOR DEVELOPMENT AND RESEARCH IN BANKING TECHNOLOGY
the geographical size, the volume and value of notes and coins in circulation, preference for cash and currency handling practices ...but technology offers immense opportunities to improve performance
PKI-based Security
RTGS
SFMS
INFINET IDRBT
The Indian Financial Network (INFINET) Messaging Solutions The Structured Financial Messaging System (SFMS) Security Public Key Infrastructure IDRBT CA National Financial Switch Inter Bank Payment Gateway
Financial Networks
SWIFT Network Reuters Network NSE Gateways and Integration with Network Other Financial Network Services
G1 G2 G3 G4 G5 G6 G7 SWIFT Network Reuters Network Stock Exchange Network Inter Banks/FIs Shared ATMs Clearing Operations Network Internet
G1
G1
G2
G2
G3
G3
Corporate Network
G1
G2
G3
G1
G2
G3
G1
G2
G3 G4
INFINET
Inter Banks/FIs Network
G4 G5 G5
G4 G6
G5
Clearing Operations Network Internet
G7
.....
......
PKI Hierarchy
CCA
IDRBT CA Repository
IDRBT CA
RA
RA
RA
Subscriber
Subscriber Subscriber
Subscriber Subscriber
Subscriber
Leased Line
Bank 1
INFINET
Leased Line
Broad Band VSAT Leased Line ISDN Leased Line ISDN ISDN
Bank N
CashNet
IP Address:202.138.123.68 Subnet Mask: 255.255.255.254 Location: Mumbai
Location: Chennai
MITR
A modern electronic dealing platform for gilts Enabling Straight Through Processing
October 30, 2004
CFMS
NSS
Participants Interface
Vepa Kamesam, Chairman IDRBT
Participants Interface
October 30, 2004
RTGS Scenario
90 banks have implemented it
3-4 more to implement in a fortnight
Providing centralized depository and settlement services Seamlessly integrated with the NDS and RTGS Systems
Secured netting services with central counterparty arrangements G-Sec and Forex segments Elimination of settlement risks with liquidity saving elements
October 30, 2004
Multiple Delivery Channels Coin & Note Dispensing Machines For the general public Interactive Voice Response System For banks and financial institutions Web server For government customers On the anvil. A secured web server SFMS/email based communication with customers
Desk Top Analytical Capability Offsite Supervisory Systems Integrated Forex Management System Human Resource Information System
Desk Top Transactional Capability Integrated Accounting System Integrated Government Accounting System Currency Operations System
Issues in Implementation
Less than 10% of failures are due to technical snags most are due to poor management and implementation
Resistance to change Overlooking process reengineering Project management Dedicated project teams Change management Policies People Skills & Training Basic Infrastructure telecom, power Security Privacy & confidentiality Legal and regulatory issues
INSTITUTE FOR DEVELOPMENT AND RESEARCH IN BANKING TECHNOLOGY
Planning for
Disasters
INSTITUTE FOR DEVELOPMENT AND RESEARCH IN BANKING TECHNOLOGY
People represent the most precious asset Large employee base largely untrained. Training scope & methodology? VRS to balance costs. Break even? Down sizing? Bring in young blood Campus recruitment Re-defining & designing jobs. Career paths? Specialist Vs. Generalist Attrition of trained employees to IT industry / other banks. Competitive incentives? Re-location of personnel. Union issues? Retrained personnel. Morale of employees?
October 30, 2004
All these developments call for extensive, continuous training Current and future technology implementations call for at least 20% of officers specialise in IT Hence need for specially skilled people a mix of:
System administrators Application managers (knowledgeable about both banking and technology) Technology managers (who form the core team of technology professionals).
INSTITUTE FOR DEVELOPMENT AND RESEARCH IN BANKING TECHNOLOGY
IS Audit
Awareness by Training
PKI
INSTITUTE FOR DEVELOPMENT AND RESEARCH IN BANKING TECHNOLOGY
Implementation
October 30, 2004
INFINET
At a Glance.
Technology Related Issues
we need to be ready..