From NAS boxes to wireless technologies to RFID to new apps, innovations in technology are making over the face of Indian banking. Bank branches now resemble cozy retail stalls and sport cutting-edge features. KTP Radhika walks into the new age bank branch to track this transformation
Till a few years back, Indian bank branches wore a melancholy facade and had an impatient air. Long queues decorated their periphery. Customers waited for tellers who would do everything behind a counter. It was, in sum, a place straight out of a neo-realist movie. That’s not the case anymore. Today’s highly evolved branches look like modern retail stores, all thanks to the widespread use of information technology and the Indian banking industry’s yearning to change. Today, financial service companies bank on the latest technologies to meet a slew of needs from taming the competition to retaining their customer base.
With the arrival of foreign banks and private banks stepping up their efforts in the past decade, competition in India’s banking sector has increased manifold. Spoiled for choice when it comes to picking a financial services provider, consumer expectations have risen. This, along with growing competition, has led to an increased awareness among banks on the role and importance of technology in branch level banking. These revolutionary changes at the branch level delivery channel began with Automated Teller Machine (ATM) technology. Innovations in IT storage, wireless technologies, new applications etc. are equipping bank branches to take the next big leap.
Branch needs
Historically, a branch formed the front line of the customer relationship. Rakesh Sinha, Director-Banking & Capital Markets, Microsoft India, said, “A decade ago, the branch was the only touch point. Even now, as other channels open, it remains the face-to-face touch point for a customer. Therefore, at the branch level, technology should help provide the best possible service to customers.”
That said, the deployment of IT solutions and applications depends a lot upon the size, need and location of a branch. The CIO of a bank has to look at these aspects while going in for solutions for the bank’s branches. “The business needs of a bank branch differ from location to location. At the typical branch of a large bank, lots of traffic comes for trivial work such as withdrawing and depositing cash, updating passbooks, checking account balances, etc. So a teller typically ends up answering these queries,” said CVG Prasad, CIO, ING Vysya Bank. “At the same time, he also has to meet his target in terms of cross selling products such as loans and credit cards. These productivity needs should be addressed by the CIO while deploying branch-level solutions.”
Echoing these sentiments, Rajnish Khare, Head – Remote Banking, Standard Chartered Bank, said, “Innovative technological solutions will definitely improve productivity, increase net-profit margin, help in providing faster service and in acquiring customers.” Apart from this, it will also bring down the cost of service for the branch. For this, a branch should have applications to manage data, servers and storage, personal computers, CRM, network infrastructure and so on. “Apart from data management and storage needs, a bank also need tools for collaboration, workforce management and unified communications to run efficiently,” Khare added.
On the server side
At present, banks in India are running the third generation of computerized applications. Johnson K Jose, Assistant General Manager, IT Department, Federal Bank, explained, “Banks started with the Automated Ledger Posting Machine (ALPM), which was a standalone system. Then they migrated to a Total Branch Automation (TBA) system, which runs in a client-server environment.” Each branch had a server that ran TBA software and clients used to access the server to carry out daily transactions. As the demand for transacting from anywhere increased, banks gradually migrated to Core Banking Solutions. As core banking technology spread, the importance of a server at each bank branch lost its relevance. Moreover, all new applications are developed using the latest Web technology, which does not have any client components to be installed at the branch. This paved the way for using thin Network Attached Storage (NAS) boxes in the place of large file servers. Prasad of ING Vysya Bank stated, “There is a lot of local data that a branch needs to access daily. So far, the tradition was to set up file servers to store this data. However, then you need backups at the individual server level, at each branch, on a periodic basis.” Also, a branch ends up employing operational staff for this activity.
“Now, the trend is changing. Bank branches are moving from file servers to NAS boxes,” said Prasad. NAS helps replicate the data to a central location from where backups can be taken simplifying procedures. Replacing servers with NAS at the branch level also facilitates safekeeping of the files that are relevant to a branch. Unlike file servers, NAS boxes accommodate a greater number of users and support policy-based access to information. Sridharan Mani, Director & CEO, American Megatrends India, commented, “NAS provides data protection against drive failures and accidental file deletion or virus attack with support for RAID storage and snapshots. Also the capacity can be expanded based on the need, unlike file servers, where the capacity for expansion is limited.”
Deploying NAS boxes also helps minimize operational cost and reducing power consumption. Subhashini Ramakrishnan, Chief Technology Manager of Dax Networks, said, “The foremost advantage with NAS is that it saves a huge amount of power when compared to traditional servers. Our NAS boxes consume only a twentieth of the power that a traditional server eats up. This offers huge savings on operational expenses for a branch.” Advanced NAS boxes also reduces WAN bandwidth consumption.
Another advantage of a NAS box is that it helps expedite data retrieval. In traditional set ups, network congestion can cause an additional half hour of latency in data retrieval from the central storage, while NAS boxes provide faster access to data thanks to the local storage facility. Vinod Ganesan, Director Sales, India, Hitachi Data Systems, elaborated, “Our NAS boxes, coupled with our content platform, help reduce data traffic and expedite the retrieval of data. NAS boxes that are deployed locally at the branches have a capacity of four terabytes and act like bottomless storage. The inbuilt intelligence on these devices tracks the most frequently accessed files and keeps only those in the local storage area. The rest is shifted to the central site and the central content platform links the data.” This also acts like a backup, which can be preserved and retrieved for complying with regulations. It also has a small footprint at the branch and the management required reduces.
Advanced apps
Modern bank branches are employing more automation and self-service technologies to offload work from the staff. Banks have started to adopt systems and new kiosk solutions such as e-Lobby, which are expected to transform branch level banking. BVR Sarma, CEO, Greater Bank, explained, “The e-Lobby kiosk is connected to the core banking system and gives real-time service for the various functionalities on the kiosk.” e-Lobby will help customers visit the lobby at their own convenience as there will be no banking hours for performing transactions. Most banking functions can be done at one kiosk. The customer does not have to run around different counters for different functionalities. “This will also reduce teller inquires significantly and bring down the man hours used in data entry and record handling, giving the banking staff more time to interact with customers.” added Sarma.
As technology evolves, more legacy applications are being replaced by new generation applications in branches, which are increasing productivity, profit and, above all, customer satisfaction. Security and regulatory compliance are two big concerns for banks. Desktop virtualization will help reduce these challenges. Jose of Federal bank said, “Virtualized PCs present multiple benefits at the branch level. This can improve the security posture of the organization, prevent unnecessary data leakage and reduce network vulnerabilities while promoting the culture of allowing the use of bringing your own device (BYOD) to work—owned and managed by the user.”
According to experts, innovative technologies can stimulate customer engagement with employees. Innovative wireless technologies now enable branches to recognize and better personalize their relationship with customers when they enter a branch. As bank branches grow bigger, they also need better surveillance solutions to provide enhanced security. Ramakrishnan of Dax said, “Today, most banks have off-site ATMs. Most of these operate on VSAT and GPRS systems. Our alert management module can work on a GPRS connection and alert the central site on events. With support for up to 2,048 cameras on a single platform and with up to 64 channels on a single screen, the video management software can be used by medium to large-scale installations.”
Radio-Frequency IDentification or RFID is another technology that bankers are looking at for branch level banking. Prasad of ING Vysya said, “RFID will bring a great change at the branch level as it will ease customer identification.” Once this system flourishes, customers’ account information will be readily available as they enter the branch and tellers can provide enhanced personal services. But, as customers are also becoming familiar with new technologies, ensuring unbreakable security is the biggest challenge. “Information needs to be imparted to the right customer at the right time. Enforcing tight security will create unnecessary hurdles for the user to access information and slow down the application. Therefore, we have to strike a balance on ensuring the secrecy of information and providing easy access to customers,” said Jose of Federal Bank.
Tomorrow’s branches
Given the pace with banks are deploying cutting-edge technology, branches of the future will embrace digital signs, self-service kiosks and other visually interactive technologies to improve the banking experience and communicate more effectively with customers. Cloud-based solutions also help here. That said, these are just starting points. “Branches are the place where a lot of data is generated and the data is characterized by three Vs namely velocity (at which data is generated), variety and volume. We have a vision of ‘one platform for all data’. We are working on next generation solutions for bringing the information to the Cloud to manage it efficiently and easily. It will look at how you deploy intelligent data mining applications, which discover and reuse the data faster to create additional business opportunities,” said Ganesan of Hitachi Data Systems.
The revolution in mobile technology will do a lot for banks. It enables customers to carry out transactions via cellphones or tablets. The Reserve Bank of India is revising a few norms around mobile banking, and this is expected to give a fillip to the category. “You will have a lot of m-commerce that will happen on your mobile phone. Banking CIOs and telecom service providers will join hands to deliver next generation solutions. Mobile networking is going to pioneer new business delivery mechanisms for banks, which will in the future do away with the branch concept in totality,” said Ganesan. “A bank branch as a front-end will diminish,” he concluded.