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IDRBT Banking Technology Excellence Awards 2011

IDRBT Banking Technology Excellence Awards 2011. Ashvin Parekh 3 August 2012. Impressions on the year Overview. IT investments Increase in overall IT spend in FY12 compared to FY11 Small banks have increased IT spending Operational costs are stabilizing IT initiatives during the year

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IDRBT Banking Technology Excellence Awards 2011

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  1. IDRBT Banking Technology Excellence Awards 2011 Ashvin Parekh 3 August 2012

  2. Impressions on the yearOverview • IT investments • Increase in overall IT spend in FY12 compared to FY11 • Small banks have increased IT spending • Operational costs are stabilizing • IT initiatives during the year • Most banks have not nominated substantial or new initiatives • Areas beyond core banking are now being focused on • However most initiatives are in early stages with results not yet visible • Need to increase initiatives in areas of operational effectiveness and BPR • Quality of nominations • Good improvement in nominations • Comprehensive coverage of initiatives • Still some deficiencies in data submitted by some banks Industry would now move towards effective utilization of IT assets

  3. CRM & BI Social Media Integrator Operations Core Banking System Electronic payments IT Infrastructure Management Banking technologyBeyond core banking • Complete view of customer relationships • Customer lifecycle management • BI should be based on transaction and behaviour data to customize offerings • Social profiles of customers • Social groups for feedback and ideas • Dovetail with CRM & BI for product and service customization • Effectiveness and efficiency of IT systems and processes • Building human capital • Greater use of technology for management • BCP & DR • Server virtualization • Green initiatives • Standardization • Increased coverage of debit cards Initiatives in multiple areas but yet to see visible results

  4. Response summary Good response in all award categories

  5. Streamlined evaluation process IDRBT and Ernst & Young Guidance and Oversight – Eminent Jury of Industry Leaders and Academicians

  6. Industry trends and challenges (1/3) Financial Inclusion • Growth of 36% in no-frill accounts • Active accounts low at 15% • Strong growth in BCs (86%) and SHG linkage (28%) • Avg balance o/s in no-frill a/c – Rs. 259 cr, growth of 240% • Small banks have also stepped up efforts • Substantial investment in IT infra and resources Mobile Banking and electronic payments • Mobile banking • Mostly used for push/pull account information • Funds transfer yet to get traction • Can dove-tail with FI especially for remittances • Electronic payments • Has grown rapidly over the past couple of years • Avg daily value of debit card payments – Rs. 491 cr • Avg daily value of credit card payments – Rs. 3 cr • Avg. daily value of internet banking payments – Rs. 393 cr

  7. Industry trends and challenges (2/3) CRM & BI Initiatives • Largely focused on ‘middle-office’ rather than ‘front-office’ initiatives • Largely focused on data warehousing rather than business intelligence • Very few banks have a unified view of the customer • Very little cross-sales and cross-channel integration IT Implementation & Management • Increasing alignment of IT with business objectives • Robust DR&BCP infrastructures implemented • Move towards energy management and use of green technology • Strong policies and procedures for IT management IT for Operational Effectiveness • Multiple initiatives in workflow automation and BPR efforts to improve internal process efficiency • Good progress towards RBI’s automated data flow targets • Good progress on automating internal systems

  8. Industry trends and challenges (3/3) Managing IT Risk • Robust policies and procedures to manage IT Risks • Comprehensive security policies with physical and logical access controls • Increased focus on creating internal awareness and protecting customer information

  9. Way forward – Emerging trends • Financial inclusion initiatives gathering momentum with strong growth in no-frill accounts opened and balance outstanding • Increased viability of FI initiatives • Mobile banking and remittances set to grow with adoption of IMPS • CRM & BI initiatives are still not effective enough for most banks, long way to go before BI solutions become effective • Retail payments happening mostly through debit cards and internet banking • Paper based payments still constitute a large proportion of payments • IT infrastructure and risk management and security to gain importance and real-time alerts and management systems will become crucial

  10. Thank you

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