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Leveraging IT for Business Benefits in Banks- Mr. Anurag Khanna
(Welcome address by Mr Anurag Khanna, Managing Director & CEO, Banknet India at the Bank Tech Summit at Taj Lands End, Mumbai on September 22, 2005)
Welcome you all to the Bank Tech Summit. I am glad to see presence of a large number of participants in morning, despite heavy rains today in Mumbai.
According to Gartner analysts, India continued to have the fastest growing ICT market in the world, and predicted a combined annual growth rate (CAGR) of 19 percent from 2004 through 2008. Gartner estimates that ICT spending in India will surpass US$54.8 billion by 2008, a rise from US$29.5 billion in 2004. Presence of IT vendors in Bank Tech Summit, from US, UK, Australia, France & Singapore shows the interest of global IT comopanies in the burgeoning domestic Indian banking technology market.
(I) The theme of the summit is “Leveraging IT for business benefits in banks”. Although banks have made significant investments in IT they have not reaped appreciable benefits from these investments. The focus of the Summit is therefore to address issues in moving from using technology to leveraging it for business benefits.
(II) Today, the role of IT has become so integrated and pervasive with banking that it becomes necessary to mitigate the operational risks arising out of failure of IT systems. Banking services came to a standstill in Mumbai on 26th July 2005, due to unprecedented heavy rains. It also affected banking services in other cities, as most banks have their central switch for ATMs and core banking solutions in Mumbai. It is imperative that all banks have BCP's in place to be in readiness to tackle serious business disruptions.
According to a study done by Banknet India, number of banks, including State Bank of India, Oriental Bank of Commerce, Canara bank, Bank of Maharastra, Indian Overseas Bank have floated tenders to scale up their disaster recovery and business continuity systems. In coming months, such requirements will increase multifold as the banks in India are now looking at their business continuity plans seriously and gearing up to put disaster recovery systems in place.
Session II will discuss Disaster Recovery and Business Continuity in detail, which is a New Priority for Banks.
(III) Payment and Settlement systems form the backbone of banking system. The payment system assumes importance in the context of domestic financial sector reforms and global financial integration. According to Boston Consulting Group (BCG), the payments business is core to bank's profitability, generating up to 35% of their revenues and up to 40% of their costs. If managed through a clear, coherent strategy, payments can be a real source of competitive advantage and consistent profitability.
With the objective of ensuring efficient and faster flow of funds among various constituents of the financial sector, Reserve Bank of India has taken various initiatives.
Issues related to areas like RTGS, Cheque truncation , cash management will be discussed in Session III today.
(IV) Indian market for business intelligence (BI) applications to grow to $70 million by 2007, registering a compounded annual growth rate (CAGR) of 29.4 per cent. A report released by Frost & Sullivan said the demand from IT, telecom and the BFSI segment, especially the PSU banks, would drive the growth for BI applications. With branch automation pushing transactions out of banks to more cost-effective channels, and the increasing focus on retail products sales, more banks will butt heads as they fight for customers in saturated markets. A way around this is to use customer relationship management (CRM) intelligence to sell to existing customers.
Session IV will discuss areas related to Business Intelligence and CRM.
(V) The Reserve Bank has been facilitating and playing a proactive role for fostering IT implementation in banks by:
1. Providing basic common requirements for IT use by the banks. This comprises the network such as the INFINET with the certification authority services, and common critical applications / systems such as ECS, EFT, PDO-NDS, CFMS, RTGS, PKI, SFMS, INFINET, and the National Financial Switch.
2. Further, RBI guides banking sector by providing guidelines. Reserve Bank’s Vision Document on Payment Systems and Financial Sector Technology are such examples.
With ‘IT for efficiency and excellence' being the vision, the corporate objective in the RBI vision document reads as, "Enabling banks to leverage on IT for better customer service, improved housekeeping and overall systemic efficiency".
We are fortunate to have with us today Mr. G. Padmanabhan, Chief General Manager - in - Charge, Dept. of Information Technology, RBI, who has more than 25 years of experience in bank regulation and supervision.
I thank Mr Simen Munter, Chief Operating Officer of HSBC Bank and his team for supporting Bank Tech Summit as the Knowledge Partner.
I am also thankful to large number of senior bankers who have taken time from their busy schedule to participate today in Bank Tech Summit.
RBI’s Vision on Technology in the Banking Sector- Opening address by Mr. G. Padmanabhan, Chief General Manager - in - Charge, Dept. of Information Technology, Reserve Bank of India at the Bank Tech Summit... Read More
Press Coverage of Banknet India's Bank Tech Summit... Click Here
Banknet India's Bank Tech Summit on 22nd September 2005 was attended by 300 participants from more than 100 banks and IT companies from India, US, UK, Australia, France & Singapore. 20 Prominent Speakers included- Mr. G. Padmanabhan, Chief General Manager - in - Charge, Dept. of Information Technology, RBI, Mr Simen Munter, Chief Operating Officer of HSBC Bank ... Read More
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