Syndicate Bank saves its way to success

A centralised banking system has helped Syndicate Bank save crores of rupees

S SRIRAM says that time was the biggest challenge

"WE were looking for a solution to improve the productivity of the bank and its customers. It was never about an IT process," declares B S Murthy, general manager, IT, Syndicate Bank.
The bank had two alternatives:

• Implement core banking by carving out a small area in existing branches while keeping the existing branch automation system intact so that only new customers would get into the core banking set-up.
• Go in for a wholly-centralised system.

Turnkey project

KPMG interacted with the bank's business council at this stage. The decision was taken to go in for a core banking system (CBS) where the bank would totally migrate to the new system as it was felt that splitting into two systems would pose too many accounting issues.
"We had 72 vendors bidding for the contract," says Murthy. That number came down to a dozen, and from that to six, then three. A detailed evaluation procedure was laid down before selecting Flexcube from i-flex.
"From the start we were clear that only one consortium would be responsible for the entire project." The IBM-i-flex consortium was picked for the CBS deployment. "It was a turnkey project, including core banking, ATM, telebanking, Internet banking and cash management. We worked with i-flex, HMA, Servion and CashTech on this project," says Sriram. At the peak of the project, between IBM and i-flex, there were 25 project executives interacting with the bank.

Multicity pilots

The project began in August 2001. The first branch went live on December 15, 2001. "The first branch went live in three-and-a-half months. We had to go live in that time with all the basics. We identified seven critical bits of customisation and went live with i-flex core banking. Time was the biggest challenge, as it normally takes six to eight months," says S Sriram, associate partner at IBM Business Consulting Services.
Pilots were undertaken at six branches in six weeks by January 2002. The first was in Mumbai, which accounted for two of the six pilots; Delhi accounted for another two while Bangalore and Manipal had one each. "Branches from different cities were picked out deliberately to ensure uniform technology adoption across the country, while WAN issues were ironed out in the pilot itself. Normally, pilots are undertaken in a single city," says R Narasimhan, senior relationship manager, i-flex solutions.
After this came the launches of new delivery channels. ATMs were launched in February 2002. The telebanking launch went live in July 2002, followed by Internet banking in January/February 2003.
The core team consisted of 20 to 30 people. The core team was trained by i-flex and IBM-the training included product training and IBM AIX training. The bank organised training on Oracle. The core team began training end-users and so the acceptance level was higher. Training in setting up servers and other similar tasks is being given to bank employees; Syndicate Bank is keeping all these functions in-house. There are plans to decentralise the helpdesk operations by setting up a helpdesk in Delhi, in addition to the Bangalore operation. "The biggest challenge is to retrain 3,000 officers. We have a 45-seat set-up in Manipal that is dedicated to CBS training. We run 42 programmes in a year, accounting for 1,800 officers," adds Murthy. There is a second training set-up in Delhi.

Single window

For customers, the big boost has been the introduction of ATMs. Murthy cites the example of an ATM that was installed at the Central Railway Workshop in Matunga, Mumbai. 4,000-plus employees at the railway workshop now use this ATM, and thanks to it they no longer spend an hour or two visiting the nearest branch.
The bank also captures a greater amount of information about its customers today. "Data enrichment has been done to enable cross-selling. We collect more details about a customer than we used to," says S R Vijayakumar, the bank's deputy general manager, IT.
Existing business processes were revamped through a BPR (business process engineering) exercise that involved doing away with the 'Maker Checker' concept that was part and parcel of the old branch automation set-up.
The bank is now in a position to offer a single-window facility to its customers. Staffing requirement went down by as much as 40 percent, driving down space requirements. The deployment of a CBS has helped the bank launch a number of new products. Its global debit card has been a smash hit, with the bank signing up 1,50,000 customers in 11 weeks. Other new products and features introduced include any-branch banking and telebanking.
The bank's helpdesk generates a branch- and zone-wise report of the number of new accounts at all the branches every fortnight. This is then faxed to zonal heads. "Earlier, there was a lag in this process, it used to take a month for the information to reach the head office for consolidation. Today we are in a position to send the July statement on August 3," says Murthy.
The system also returns a list of non performing assets (NPAs), and the credit department is the first to know of these. This makes monitoring and response a lot faster.