As compared with other nationalised or private banks, Co-operative banks may not be having big budgets to build the infrastructure which will comply with RBI norms as well as implement all banking channels and modern banking practices like Unified Payments Interface (UPI), net banking, mobile banking, online banking, e-banking, ATM banking, and all other modern banking practices. Slowly, but surely, India’s cooperative banks are now emerging out of technological challenges. Nikunj Patel, Chief Technology Officer, Mehsana Urban Co-Op. Bank Ltd explains the major overhaul to modernise legacy systems and sought to adopt a tier 1 core banking solution and a robust infrastructure to power and expand the core business
How has technology reshaped the Co-Operative Bank ecosystem in recent times? What are the factors driving the digital transformation of the Co-Operative Bank sector?
Technology has been the primary enabler of significant innovation in the last few years across all sectors. Banking sector as a whole has been an active participant in the technology race trying to achieve efficiency, improved customer service and data security. In this endeavour, cloud and related technologies have been able to achieve significant results for the sector globally and co-operative banks are no exception. Especially in the last few years, technology-driven solutions including mobile and online banking have become a norm and a primary customer requirement. In such a scenario, moving without these options would push the sector back by decades and might also make the customers choose other banks.
Automation and digitization of any kind have also been at the top of priority list for the entire banking sector. Technologies such as AI/ML, digital assistants, and digital chat systems have been able to facilitate deeper automation and streamline many processes for efficient customer service. Additionally, the most important aspect of technology’s acceptance for co-operative banks is greater accessibility which is imperative to ensure financial services are reached to those who wish to access it. The entire digitization effort by the banking sector is primarily driven by amplified importance driven by the customer and also the significant cost savings that can be ensured with cloud.
Highlight the key technology enablers that are accelerating the disruption being witnessed in the Co-Operative Banks?
Amongst the rising usage of technology, one of the primary technology enablers for the sector is cloud computing. For the sector, it has been the basis of all innovation and customer centric advancements, With its many benefits, the technology has allowed the entire sector to be a step ahead and move beyond the traditional IT setup which can be costly. It has also allowed access to scalability and which has ensured that the banks are able to respond to customer demand effectively. Having an efficient cloud strategy in place can also ensure that these banks ensure innovation aligned with the various regulations. Additionally, with cloud, co-operative banks are also able to develop sector specific solutions and get a competitive advantage in the ever evolving landscape.
What are some of the technology initiatives undertaken specifically over the past two years that helped your bank to navigate through unprecedented times?
Over the past 2 years, we saw a 10X increase in transaction volume, and significant demand in mobile banking and United Payment Interface (UPI) therefore we decided on a major overhaul to modernize our legacy system & sought to adopt a tier 1 core banking solution and a robust infrastructure to power and expand the core business. We are looking at flexibility and scalability to match resources to unpredictable demands, and the infrastructure has to be secure and compliant with RBI’s strict regulatory requirements.
How has Cloud as a platform been beneficial for the Co-Operative Bank? Cite examples where Mehsana Urban Co-Op. bank has been leveraging emerging to automate the processes?
Cloud has been a unique enabler across sectors including co-operative banks considering every organisation needs agility and the power to scale with better efficiency. Cloud aims to provide all this and more at lower rates if utilised smartly. The primary goal remains to ensure improvement in customer experience and with cloud, banks are able to offer digital banking services that are able to add much higher satisfaction amongst the customer base.
We purchased a quarter rack X9M for our production environment and a base rack for DR. License-included subscription models empower us with a full set of industry-leading capabilities to improve efficiency and performance, and accelerate speed to market. Compared to other on-premises deployments, the bank is expecting 30% in performance improvement, and reduce the TCO by 40% over the next 4 years. We are also planning to automate our data backup policy.
Could you share how Oracle has helped in your digital transformation journey. What are the areas where Mehsana Urban Co-Op. bank leveraged Oracle’s solution
Over the last 2 years, we witnessed a 10X increase in transaction volume and also witnessed a significant demand in mobile banking and United Payment Interface. With a fast-growing operation and ambitious expansion plans, we wanted to revamp our legacy system with new technology and enhance our offerings along with that double the number of branches across multiple states within the next few years. Additionally, we had many compliance requirements from the Reserve Bank of India.
After evaluating multiple options, we chose Oracle Exadata cloud @customer to host our new CBS for its unique hybrid cloud infrastructure, allowing us to deploy within our data Centre while delivering extreme performance, scalability and security. We are able to take advantage of Oracle Exadata cloud @customer’s ’ flexibility, enabling us to easily deploy resources to match unpredictable demands without a huge upfront CAPEX investment.
What are some of the challenges of being a Co-Operative bank and how technology is helping in overcoming these challenges
Co-operative banks have to follow norms set by the RBI and their respective state governments. As compared with other nationalised or private banks, Co-op bank may not be having big budgets to build the infrastructure which will comply with RBI norms as well as implement all banking channels and modern banking practices like Unified Payments Interface (UPI), net banking, mobile banking, online banking, e-banking, ATM banking, and all other modern banking practices. Due to this, they have been on the back foot in growth. Therefore many co-op banks are adopting cost-effective ways out like hosting software as a service model or migrating their applications to public cloud or Hybrid cloud to spare the high costs needed in setting up the infrastructure. Cloud computing is serving as a transformative digital solution that facilitates banks with ease in scaling the infrastructure up or down, data analytics and data storage. It benefits the industry with utmost flexibility, enhanced agility, higher scalability to meet ever changing consumer demands, and better operational efficiency.
Migrating our core banking application on ExaCC is our first step to leverage the hybrid cloud technology, we are planning to shift our all applications databases to ExaCC after successful implementation of current project. This step will help us in consolidation of all our databases in single machine. It will save lot of operational and manageability efforts. In future we are planning to use same infrastructure for data analysis using AI & ML to expand our business. Great part about ExaCC machine is it supports these capabilities.