Syndicate Bank saves its way to success

A centralised banking system has helped Syndicate Bank save crores

of rupees
S
"WE were looking for a solution to improve the productivity of the SRIRAM
bank and its customers. It was never about an IT process," declares B says that
S Murthy, general manager, IT, Syndicate Bank. time was
The bank had two alternatives: the
biggest
• Implement core banking by carving out a small area in challenge
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.