Banks bet big on technology to boost efficiency, curb fraud

Both international and Indian banks are fast adopting information technology (IT) to improve efficiency, curb fraud, cut costs, comply with regulatory changes and take their products to the market faster. For customers, the increased IT adoption by banks offers greater convenience, safety and accuracy in monetary transactions. “A bank wants a real-time, unified view of the customer. And the customer wants a unified experience of the bank,” says Sriram Srinivasan, senior vice-president and global banking business head at Wipro Technologies. “Customer-centricity is a key driver. How do you get the right focus, the right services for the business that customers give banks?” Bank customers have various channels of interaction today—automated teller machines (ATMs), the Internet, call centres, branch offices and even mobile phones. A simple text message can effect a financial payment as reliable and secure as with a few mouse clicks on a Web portal. Akhilesh Tuteja, executive director at consulting firm KPMG India, who works on technologies for the banking sector, identifies the several dimensions in which IT is changing the sector. “One is clearly customer service. The second is reducing the cost of doing business. The cost of processing a cheque leaf is several-fold over the cost of an electronic fund transfer.” The third dimension is risk management. Cellphone text alerts on credit card transactions have dramatically brought down fraud. On the banking side, analytics available today are capable of preventing even seemingly innocuous but fraudulent transactions. If a credit card is swiped in Bangalore and an hour later in Malaysia, a bank’s IT system will block the transaction. “It knows that you can’t get to Malaysia from Bangalore in an hour,” says Tuteja.  good part of the banking system in India has gone in for integrated core banking, the platform that offers a unified view of customers. A key challenge lies in standardizing how data is captured. A misplaced initial in a name can compromise a unified view of a customer. A big bet for the future is the creation of so-called digital wallets on mobile phones. Tuteja notes that a convergence of several factors is facilitating such a adoption: “The communication devices, the security on these devices, integration of banking IT infrastructure, and the regulatory framework and guidelines from RBI (Reserve Bank of India) are all in place.”