Rajesh Chakrabarti
It was a party with a difference. The evening of February 7 saw the sprawling grounds of Brabourne Stadium teeming with the who’s who of the financial world and the leading lights of Indian industry. Shekhar Kapur and (I am told) Juhi Chawla added glamour. Even the FM tweaked his schedule to attend. The occasion: ‘Technology in Concert’, SBI’s celebration of its successful rollout of Core Banking Solution (CBS), creating the world’s largest core banking network.
Not so long ago, it was virtually impossible to be able to access one’s bank account from anywhere other than the branch to which the account belonged.
Today, someone with an account in Arunachal Pradesh can easily transact upon it in Andhra Pradesh. A car loan payment can be automatically processed from a savings account and funds can be transferred across the country and remitted from abroad instantaneously. ATMs work ‘anytime, anywhere’.
All this comes from adopting Centralised Online Realtime Environment Banking or core banking. At its heart, it means connecting all the branches of a bank in a hub-and-spoke model with an IT centre so that bank records become accessible anywhere throughout the entire bank, regardless of the origin of the account. Now a customer belongs to the bank, not to a specific branch. Distance disappears. Costs fall sharply. New products become possible. Relieved of back office work, branches can focus on marketing and customer service. A bank’s basic business model now requires a complete revamp. Technology changes everything.
Most new private banks started off with core banking. But for public sector behemoths like SBI, switching to core banking involved every change management challenge in the book and more. Processes had to be aligned with the new technology to derive optimum advantage. Employees had to be trained and their mindset had to be oriented towards the paradigm shift that core banking brings in its wake.
There was, of course, no way around it if SBI wanted to stay competitive. The exercise started in 2003 with TCS as the lead technology partner for domestic branches and Infosys for foreign branches. Many others like Cisco, Microsoft and Datacraft were involved in a critical partnership of mind-boggling scale.
The journey was far from smooth. By mid-2006, the rollout was bogged down with problems. The day-to-day experience for both customers and employees became a trying one. Coordination between branch servers, IT centres, local hardware, software and connectivity was...