IDBI Bank revamps core banking

When IDBI Bank decided to go in for a retail banking initiative it felt the need to upgrade its technology to offer a wide variety of products and services. With Finacle, it has been able to achieve just that, says Abhinav Singh

Technology is a key point that lets a company differentiate itself from the competition. IDBI Bank’s implementation of Finacle (a core banking solution from Infosys) has helped it achieve this. The bank, which began with an equity capital base of Rs100 crore in November 1995, was earlier catering primarily to corporate clients. In 2001, the bank decided to focus on retail banking and framed a new strategy.

According to Sanjay Sharma, IDBI Bank has seen its retail banking business grow many times over after deploying Finacle

IDBI Bank realised that its 53 branches and 79 ATMs (automated teller machines) across India would not suffice. The need of the hour was to have a technology platform that would seamlessly scale up and let the bank reach its customers through multiple delivery channels. Scalability was a very important factor that needed to be addressed due to an expected quantum leap in transaction volumes and customer accounts, which goes hand in hand with the consumer banking business.

The ability to offer seamless delivery channels was another factor as customer demand was not restricted to maintaining accounts with the bank. Customers wanted a unified view of their interactions with the bank through multiple delivery channels. To sum up, the need was to have a completely integrated solution, which would cater to consumer banking requirements and provide comprehensive business banking functionality for the bank’s existing corporate clientele.

The system that was

Before shifting to Finacle, IDBI Bank was using the Kindle banking system. However, in order to meet its new strategic initiatives and the specific thrust on retail banking, it needed a new core banking system. IDBI Bank wanted to have a solution that would not only be quick and easy to deploy but one that would also provide the bank with the flexibility to launch new products and services. Being fully aware that typical core banking implementations took as long as 8-12 months, the bank was keen on choosing a solution that gave it a time-to-market advantage. It needed to choose a technology partner with a track record of deploying core banking solutions significantly faster than the norm. Furthermore, along with the speed of implementation, a robust solution was required.

Evaluation

IDBI Bank went through a detailed and rigorous evaluation process of various core banking solution providers. The first round of short-listed vendors was based on the products being able to meet the exhaustive requirements of the request for proposal (RFP). The shortlisted solution providers were then asked to meet the exacting requirements of the test case scenarios laid down by the bank.

IDBI Bank was drawn towards Finacle Core Banking solutions due to its new generation technology and the use of Web technology. With features like straight through processing, 24x7 banking and e-Xtensibility tool kit, Finacle Core Banking proved beneficial to the bank. Besides this, Infosys had a track record of rapid deployments.

This was proved when Infosys deployed the Finacle Core Banking solution in a record five and half months across the entire bank without a single extension to the agreed project time lines.

Quick roll-out

The implementation project started in January 2001 with the training of the project team that comprised of 25 members, both bankers and technical folks, from Infosys and the bank. The bankers were those with a strong inclination towards banking software and before coming to the implementation team they were exposed to the banking software. The core team was sent for training at Infosys, Bangalore for 45 days. During the training sessions the team got acquainted with the product set-up and categories. The quick roll-out of the solution in all the branches of the bank was a big challenge. After its return to Mumbai, the project team imparted training about the product to 600 employees of the bank at IDBI’s training facility at Belapur in Mumbai. These 600 employees were trained in batches of 30-35 people with training for each batch lasting for a week. The training sessions took up 21 weeks. The Finacle roll-out in branches started on May 2, 2001 with the first pilot branch of the bank in Mumbai going live on the same day. From this day, every week saw the product being deployed at seven to eight branches. By June 18, all the 53 branches of the bank had gone live on Finacle.

Scaling up with new products

Finacle Core Banking has helped the bank scale up to handle over 300,000 transactions a day from 750,000 customer accounts at 92 branches with seven extension counters and 291 ATMs. IDBI Bank has emerged as the third largest private bank in India in terms of distribution of branch networks, number of ATMs and product distribution. Sanjay Sharma, head IT, IDBI Bank says, “After deploying Finacle Core Banking, IDBI Bank has seen its retail banking business grow many times over. By seamlessly interfacing to multiple delivery channels of the bank, the solutions offers our customers a unified view of their relationship with the bank, thus helping us achieve customer satisfaction. We have also been able to reduce our end-of-day processing time by more than 80 percent.”

The Finacle Core Banking solution has also helped the bank increase its retail portfolio in a short timeframe by enabling rapid roll-out of new products and services. Sharma adds, “The scripting feature lets us roll out new products very quickly. Family account and gift cards, debit cards and three pin account are some of the new products we have launched post-implementation.” The implementation has also resulted in process centralisation. As a result of this centralisation, the back-office processes of the bank’s branches across the country have been centralised at Delhi, Chennai and Mumbai. IDBI Bank intends to introduce new modules in the near future, including the channel financing module, fund transfer pricing module and co-operative bank infrastructure module.

abhinav@expresscomputeronline.com

Hardware and software

* Servers: Two Sun E10K servers and three Sun 4500 servers host the Web, database and application server software. * Storage: T-3 storage boxes from Sun. The storage management software is from the vendor. * Networking: The bank’s wholly-owned data centre is located in Mumbai. 64 Kbps leased lines connect branches across the country. VSATs are used where leased lines are unavailable. The network is built around a mesh topology so that branches are connected to one main centre and there are alternative arrangements in case a link goes down.