‘Information technology is at the core of how you do your business and how your business model itself evolves.’
-SATYA NADELLA
Technology has become the way of banking in this convenience-oriented, value-driven era that is powered by knowledge. This has changed the customer-banker relationship in the last two decades at an accelerated pace with the introduction of CBS. Customers have now become the customers of the bank rather than the branch, which was the age-old notion when it came to the customer-banker relationship. With the expansion and diversification of alternative delivery channels in the form of Internet banking, mobile banking, ATMs and digital payment platforms, the customer-banker relationship has transformed. Now, accounts can be opened without visiting the branches and the majority of the younger generation never visits branches for standard, routine or repetitive transactions, which are now taken over by technologically driven diversified alternative delivery channels in a smooth and efficient manner. Even standard retail loan products, such as personal loans, vehicle loans, housing loans and property loans, are highly standardized and are taken care of by system-driven processes, by collecting data from various sources, such as income tax, goods and services tax (GST), bank transactions, registrar of companies, etc.
Banks have also started processing loans for MSMEs through system-driven processes, such as PSB 59 (PSB loans in 59 minutes) and Jan Samarth (national portal for government- sponsored schemes), which have been extended to agriculture and retail loans too. We have seen a 360-degree change in the role of technology in banking operations since the days when it was limited to routine, repetitive and standard transactions. In the last decade of the twentieth century, technology was used as an enabler for banking operations. Now, human resources are enablers and technology has assumed a dominant role with an increasing number of transactions coming within the ambit of straight-through processing. I remember an observation of a very senior banker who jokingly remarked that we are in the business of banking too, which shows how deeply technology has penetrated into the operational domain of banking and how every banker is now supposed to have basic knowledge of technology.
RRBs are late entrants in the field of technology because of their limited business volume with low profitability and the high cost of technology in the initial stage. Poor infrastructural facilities in rural areas were also one of the reasons for the delay in technological adoption. With the amalgamation of RRBs, they became bigger in size and improved profitability, which enabled RRBs to adopt technology. All RRBs are now on the CBS platform. Our bank also migrated to CBS in 2011, though the sponsor bank manages and supervises the data centre, which collectively takes care of all three RRBs. For the management of routine operational issues, the bank has deputed IT officers at the data centre and they also serve as a link between the sponsor bank’s data centre and our bank for the management of IT-related issues.
(Excerpted from Banker by Chance, Leader by Choice by Shiv B. Singh)
