BANKING INDUSTRY

RESEARCH REPORT
ON

ROLE OF INFORMATION
TECHNOLOGY IN BANKING SECTOR

Report submitted for the requirement of

MASTER OF BUSINESS ADMINISTRATION

(U.P. TECHNICAL UNIVERSITY, LUCKNOW)

SUBMITTED TO: SUBMITTED BY:

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ACKNOWLEDGEMENT

I would like to thank our respondents for cooperating with me and

elsewhere for their help and assistance in the compilation of this
work. The survey was conducted in Delhi and NCR region.

Finally to for his valuable inputs and

guidance, he provided at every stage of research process,
charting the course towards its successful completion.

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TABLE OF CONTENTS

ACKNOWLEDGEMENT

TABLE OF CONTENTS

ABSTRACT

INTRODUCTION

CHAPTER 1-PROBLEM IDENTIFICATION

CHAPTER 2

2.1 INTRODUCTION

CHAPTER 3

RESEARCH METHODOLOGY USED

3.1 INTRODUCTION

3.2 RESEARCH DESIGN

3.3 PRIMARY DATA

3.4 SECONDARY DATA

3.7 CAUSAL RESEARCH

3.8 QUESTIONNAIRES

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CHAPTER- 4

METHOD DATA ANALYSIS

4.1 FIELD WORK

4.2 CROSS TABULATION

4.3 PRIMARY RESEARCH

4.4 SAMPLE QUESTIONNAIRE

CHAPTER 5

FINDINGS AND ANALYSIS

5.1 ICICI BANK

5.2 STANDARD CHARDERED BANK
5.3 SBI
5.4 HDFC
5.5 PNB
5.6 CANARA BANK

CHAPTER 6

CONCLUSION

BIBILOGRAPHY

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ABSTRACT
Regulation and technological improvements are responsible for the vast majority of
innovations in banking over the past quarter century. The introduction of personal
computers and the proliferation of ATMs in the 1970s captured bank management’s
attention. The regulatory changes in the 1980s fueled much of the industry’s growth, then
downsizing as bankers focused on amassing market presence which resulted in significant
merger activity. Recent technological improvements are at the root of bankers’ focus as
well as a target for their significant investment dollars today. In fact, according to recent
projections, bankers and their financial service company brethren will spend almost $7
billion this year on CRM and increase that by 14 percent each year for the next several
years.

Looking at this CRM phenomenon in light of the drivers of banking innovation since the
1970s, one might wonder if CRM itself is the innovation, or (conversely) the technology,
once again.

Much is being written about CRM. Bankers at all points of the CRM spectrum are
looking for a way to quantify their return on investment — either what it actually is or, if
just starting out, what it should be and over what period of time should the value be
realized. Ironically, the answer to this question may lie in a simple review of a few known
quantities generated from historical innovation.

Look, for example, at ATMs. What drove many bankers to invest in ATMs was the
promise of reduced branch cost, since customers would use them instead of a branch to
transact business. But what was discovered is that the financial impact of ATMs is a
marginal increase in fee income substantially offset by the cost of significant increases in
the number of customer transactions. The value proposition, however, was a significant
increase in that intangible called customer satisfaction. The increase in customer
satisfaction has translated to loyalty that resulted in higher customer retention and
growing franchise value.

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Guess what? Internet banking, a product of the 1990s, shows similar characteristics.
Again, bankers invested believing that the Internet was a lower-cost delivery channel and
a way to increase sales. Studies have now shown, however, that the primary value of
offering Internet banking services lies in the increased retention of highly valued
customer segments. Again, the intangible called customer satisfaction drives the value
proposition.

Now we explore CRM. CRM is not another ATM or Internet bank. It is not a checking
account, a stock or a mortgage. In fact, CRM is not anything a customer should even
know about! You will never sell your customer your CRM, will you? So, one can
conclude that CRM is not tangible. If it’s intangible, can it be expected to produce a
tangible return? Probably not, or at least not with any direct financial value exclusively
linked back to the investment in CRM.

Is CRM another innovation, or the result of innovation? I think both. CRM is primarily
driven by the innovation of technology, but unlike other technological innovations, CRM
has power to help bankers quickly and directly improve customer satisfaction. CRM is an
added dimension to ensure that what the customer expects is consistent with what the
bank is prepared to deliver. One expert in bank CRM initiatives recently said that CRM is
an approach that is less focused on providing the right services to the customer than
attracting customers who are the right fit for what the bank has to offer. Further, the
primary value of CRM is its potential as a customer retention tool. People are starting to
measure CRM in terms of increased customer satisfaction rather than ROI.

So how much of a return can you expect from your CRM investment, and when can you
expect it? Refer to your reasons for continuing to offer ATM and Internet banking
services. The answer for CRM is the same.

A strategy and technology solutions provider focused on helping financial services firms
become customer-centric, announced that they will now offer a specialized version of

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Microsoft Business Solutions CRM, CRM for Banking, to specifically support mid-
market retail banks that want to capitalize on profitable customer relationships.

CRM for Banking provides the banking industry with a comprehensive solution for
managing customer relationships. By working closely with retail and commercial
financial institutions, CRM for Banking has been designed to support the unique business
needs of banks, including:

• Cross-selling across multiple products and departments

• Referral management

• Service request management, routing and escalation

• Company, client and household profiling

• Approved / not funded loan tracking

• Interface with core transaction system

CRM for Banking enables retail and commercial banks alike to create a single source of
information that makes it easier to sell to, market to, and service customers across
multiple channels and lines of business.

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INTRODUCTION

The financial sector is 10 years behind the times in its approach to management - partly
because banking systems are supposed to be too complicated to provide real-time
information. Not so, says Steve Boyle. The latest thinking in information processing could
save the banks billions every year.

Information is the basis of the banking system. So changing the banking infrastructure is
a huge concern for the financial sector. Many who were marked by failed attempts at
wholesale change in the late 1980s have until recently seen the replacement of core
systems as too large a project to contemplate.

Back-office processing activities are not a priority in the thoughts of a bank's business
executives.

But if traditional processes start to break down and threaten competitive advantage, a
bank can quickly be left behind. Any delay in systems administration can have serious
consequences. But the pressure is to leave things well alone. Back-office processing
activities are not a priority in the thoughts of a bank's business executives. Short-sighted,
perhaps.

Left too long, this attitude will lead to a systematic failure to keep up with business
requisites and check-list complexity. The need to increase competitiveness across the
banks has left most businesses no choice but to decide on some form of replacement.
Then comes the question of performance. Banks must consider their current needs and
find a solution that will meet those needs head on. They also need to bear in mind current
business and technology trends and how these might shape their core banking
requirements over the next 20 years.

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Perhaps the biggest issue to consider is the real-time concept in banking infrastructure.
Real-time management is a strategic technology, which includes the real-time capabilities
of customer, product and channel data, and how this can be used to provide real-time
business information.

Businesses are coping with increasing financial uncertainty and battling to retain
demanding customers. Real-time capabilities are now becoming an important
competency.

Real-time management offers huge advantages for banks operating multiple branches or
multi-disciplinary units. A real-time management system can operate globally on one
single, integrated, real-time banking platform. It gives the capacity to access and
manipulate data easily, efficiently and quickly.
No longer is the bank at the mercy of a series of time-delayed management reports.
Instead it can see the progress of important operations as they happen. Problems can be
identified before they become critical and efficiencies can be garnered into greatly
improved margins.

All fine in theory. But is it achievable in practice? Perhaps there are lessons to be learned
from change management techniques.

For example, Deutsche Bank recently underwent the biggest outsourcing project in its
history. The bank had plans for a sweeping upgrade of its data processing systems which
could save the business €880m over 10 years. If it failed, it had the potential to bring the
bank to its knees.

Real-time management techniques were introduced to ensure the project was brought in
under budget and before the deadline. The project was so successful that the same
techniques are now being applied throughout the bank to corporate real estate, trans-
continental data transfer, private banking and the integration of a recent acquisition.

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These new techniques, allied with the huge increases in available processing power, have
set up an environment where real-time approaches are a real possibility.Because real-time
techniques have been so successful in the area of change management, organisations such
as Deutsche Bank are increasingly looking to access all data in real-time. Traditionally,
systems were built up in-house with no common data structures. Core banking systems
today allow most data to be kept in one place.

This helps the bank to move from a higher level of risk assessment to dealing with it at a
lower level, in real-time. This means far greater accuracy, which can benefit the bank in
terms of regulatory compliance. Greater accuracy can free capital for investment in other
areas.

With the removal of end-of-day processing, banks can truly adopt the concept of access to
real-time transactional data. Having customer information stored on a historical
information file means data is almost always out of date. Having real-time management
systems makes way for real-time data, enabling a real advantage over competitors.

Having the right tools means banks have the option of running analytics in a real-time
operating environment without affecting the performance of operational systems.

The model enables banks to work with a single source of truth, which will provide the
organisation with a number of business benefits. Improved customer service, more
accurate risk management and seamless access to banking services and information are
just some of the advantages of the real-time model.

The philosophy behind real-time management has been around for many years but now
the technology exists to make it possible. For banks looking at replacing the systems that
are constricting their business activities, achieving real-time business intelligence could
well be the answer.

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CHAPTER 1
PROBLEM IDENTIFICATION

Customer relationship management - Holy Grail or unholy mess? For many companies,
it's a bit of both. Given the attention on CRM over the past couple of years, you could be
forgiven for thinking you are well behind the curve. In fact, ICICI has found the reality is
almost always different.

With CRM, many companies (and the majority of CRM vendors) get very focused on the
'C', rather than the 'M'. Although the customer is a key part of the equation, they are not
king. It is true that without customers you cannot survive but the secret is in having the
right sort of customers.

Many companies get caught up in the numbers game ("We have more customers than
you"), neglecting the one word that needs to be in the sentence - "profitable".

1. Effectiveness of information technology in banking sector.

2. Customer satisfaction with the use of information technology.

3. Growth in banking sector with the use of IT.

4. To find out the customers expectations/requirement for success of banking

sector.

5. Trends for the future.

The above-mentioned issues and objective are just a broad guideline to the researchers,
these objectives are enforceable to change especially after conducting the secondary and
exploratory research, which might answer some of these questions and put forward some
new issues.

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CHAPTER 2
INTRODUCTION

About Banking industry

Definition of the Industry

In India the banks are being segregated in different groups. Each group has their own
benefits and limitations in operating in India. Each has their own dedicated target market.
Few of them only work in rural sector while others in both rural as well as urban. Many
even are only catering in cities. Some are of Indian origin and some are foreign players.

All these details and many more is discussed over here. The banks and its relation with
the customers, their mode of operation, the names of banks under different groups and
other such useful informations are talked about.

One more section has been taken note of is the upcoming foreign banks in India. The RBI
has shown certain interest to involve more of foreign banks than the existing one recently.
This step has paved a way for few more foreign banks to start business in India.

With the advancement of technology and the birth of competition, banks are in the race of
becoming the best in the country. With an eye upon customer satisfaction policy they are
providing best of the best services with the minimum hazards.

Banks like ABN AMRO introduced banking with a coffee. It made a tie-up with one of
the best coffee bar in the country, Barista and remained open till late evening for
customers with a setup of a coffee bar in the premises.

Few banks have introduced world ATM card to make travellers across the globe more
safe and secure. What else. Internet and Phone Banking is the call of the day for banks.

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In this race towards the best, we have selected top 20 banks in the country from all
segment. It is not the ranking of banks but only for general information about the top
banks in India.

Easy Banking

This section is fully dedicated to the Tech Banking. A decade before, it was tough to
belief that banking secctor will be at a finger tip. Now its possible. A mobile hand set
with a connection is the only instrument needed to make a gateway to your banking
transaction, the latest innovation of technology.

Apart from the Mobile Banking, including of SMS Banking, Net Banking and ATMs are
the major steps taken by the banks in India towards modernisation. With all these devises
and systems, there is a complete freedom to experience.

Check your account, transfer your fund, make payments and what more, do anything of
everything what has been followed in physical banking since ages. But this time no
standing for hours in front of cash counter and no time boundation in withdrawing your
own money.

Automated Teller Machine (ATM)

The first bank to introduce the ATM concept in India was the Hongkong and Shanghai
Banking Corporation (HSBC). It was in the year 1987. Now, almost every commercial
banks gives ATM facilities to its customers.

The first bank to cross 1,000 marks in installing ATMs in India is ICICI. SBI is following
the concept of 'ATMs in Quantity'. But Private Sector Banks have taken the lead. ICICI,
UTI, HDFC and IDBI counts more than 50% of the total ATMs in India.

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Public Sector Banks are also taking the installation of ATMs seriously for Indian market.
They are either setting up their own ATM centres or entering into tie-ups with other
banks. The Corporation Bank has the second largest network of ATMs amongst the
Public Sector Banks in India.

The Indian banks have also come up with a 'Swadhan' scheme. Under this scheme, the
banks can use each other's ATM at a cost, usually Rs. 35 extra from their customers.

Mobile Banking In India

"The account that travels with you". This is needed in today's fast business environment
with unending deadlines for fulfillment and loads of appointments to meed and meetings
to attend. With mobile banking facilities, one can bank from anywhere, at anytime and in
any condition or anyhow. The system is either through SMS or through WAP. (Check out
for SMS Banking under different head)

Mobile Banking is the hottest area of development in the banking sector and is expected
to replace the credit/debit card system in future. In past two years, mobile banking users
has increased three times if we compare the use of either debit card or credit card.
Moveover 85-90% mobile users do not own credit cards.

Mobile banking uses the same infrastructure like the ATM solution. But it is extremely
easy and inexpensive to implement. It reduces the cost of operation for bankers in
comparison to the use of ATMs.

Using compact HTML and WAP technologies, the following operations can be conducted
through advanced mobile phones which can is further viewed on channels such as the
Internet via the Channel Manager.
• Bill payments
• Fund transfers
• Check balances

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Any many more which is also available in SMS Banking

In countries like Korea, two SIM Card is used in mobile phones. One for the telephonic
purpose and the other for banking. Bank account data is encrypted on a smart-card chip.
About 3.3 million transactions were reported by Bank of Korea in 2004.

SMS Banking
Businesses are in move. So is to be your money. You may have to thank the banks which
are providing banking at the send-of-your-sms. The technology is at its highest level to
move your money while you are on the move. If you are having non-WAP enabled
mobile handset, you can use the facility of SMS services. The following operations can
be easily used by the service provider:

• Balance enquiry
• Last three transactions
• Cheque payment status
• Cheque book request
• Statement request
• Demat - Free Balance Holding
• Demat - Last two Transactions
• Bill Payment

The SMS facility brings peace of mind to customers and opens doors to many more
technological possibilities and innovative services. It is very similar to how an ATM
works.

To use ATM, a card is necessary and to use SMS service, a mobile phone is needed. In
both the cases, secret number is necessary to access.

SMS banking is also very much safe. First, one authenticates the mobile number with the
authentications key. Second, the customer uses secret Mobile Personal Iddentification
Number (MPIN).

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A new concept has been developed by Bank of Punjab Ltd. They call it "Mobile Wallet".
With the support of this technology, a customer can make payment and receive payment
of account of buy/sell (merchants) through SMS.

Net Banking

Net Banking is conducting ones banking or bank account online through a computer and
a net connection. The system is updated immediately after every transaction
automatically. In other words it is said that it is updated 'on-line, real time'. Through
netbanking one can check the status of his/her account, place queries and also can be
facilitated with a wide range of transactions simultaneously.

In India, the regulatory body has not yet sanctioned virtual bank, in abroad there are
banks like EGG Bank or NET Bank, which only have a virtual presence without any
physical branches.

Net Banking has three basic features. They are as follows:

• The banks offer only relevant informations about their products and services to
the mass.
• Few banks provide interaction facility between the banks and its customers.
• Banks are coming up with arrangements of utility payments, like telephone bills,
electricity bills, etc.
The current statistics show that hardly 10 per cent of Indian customers uses the
internet for banking. Among all the facilities provided, the maximum of them uses
only for checking balance or requesting for a cheque book. Very few customers uses
the advance interactive services provided by the banks.

According to HDFC and ICICI Bank, 17 per cent of ICICI customers use the Internet
for banking and 10 per cent of HDFC customers prefer it.

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Cost of installation of services

For basic features, the cost for providing such services to the banks come around Rs
40 lakh to Rs 50 lakh. For the third level service or sophisticated services, the
investments mount to the tune of Rs 4 crore to Rs 5 crore. These investments is just a
fraction if compared to the operations of the bank using physical infrastructure.

Services provided by Net Banking

Queries
• Check Balance
• See Statement
• Inquire about cheque status
• Ask for a Statement
• Ask for a Cheque Book
• Inquire about Fixed Deposit
• Inquire about TDS details
• See Demat Account
• Update profile
Transactions
• Stop a Cheque
• Pay Bills
• Ask for a Demand Draft
• Transfer funds between your accounts
• Transfer funds to a third party
• Request for a new Fixed Deposit
• Shop Online
• Pay Bank Credit Card Dues

Advantages of Net Banking

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It removes the traditional geographical barriers as it could reach out to customers of

different countries/legal jurisdiction. This has raised the question of jurisdiction of
law/supervisory system to which such transactions should be subjected.
It has added a new dimension to different kinds of risks traditionally associated with
banking, heightening some of them and throwing new risk control challenges.
Security of banking transactions, validity of electronic contract, customers' privacy, etc.,
which have all along been concerns of both bankers and supervisors have assumed
different dimensions given that Internet is a public domain, not subject to control by any
single authority or group of users.
It poses a strategic risk of loss of business to those banks who do not respond in time to
this new technology, being the efficient and cost effective delivery.

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CHAPTER 3
RESEARCH METHODOLOGY USED

This chapter aims to understand the research methodology establishing a framework of

evaluation and revaluation of primary and secondary research. The techniques and
concepts used during primary research in order to arrive at findings; which are also dealt
with and lead to a logical deduction towards the analysis and results.

RESEARCH DESIGN
The researchers propose to first conduct a intensive secondary research to understand the
full impact and implication of the industry, to review and critique the industry norms and
reports, on which certain issues shall be selected, which the researchers feel remain
unanswered or liable to change , this shall be further taken up in the next stage of
exploratory research. This stage shall help the researchers to restrict and select only the
important question and issue, which inhabit growth and segmentation in the industry.
These set of questions are then proposed to be studied under a descriptive research setting
finally leading to formation of hypotheses and testing under causal research.

PRIMARY DATA

New data gathered to help solve the problem at hand. As compared to secondary data
which is previously gathered data. An example is information gathered by a
questionnaire. Qualitative or quantitative data that are newly collected in the course of
research. Consists of original information that comes from people and includes
information gathered from surveys, independent observations and test results.. Data
gathered by the researcher in the act of conducting research. This is contrasted to
secondary data which entails the use of data gathered by someone other than the

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researcher information that is obtained directly from first-hand sources by means of

surveys, observation.
Primary data is basically collected by getting the questionnaire filled by the respondents.

SECONDARY DATA
Information that already exists somewhere, having been collected for another purpose.
Sources include magazines, various web sites, and subscription services. Data that have
already been collected and published for another research project (other than the one at
hand). There are two types of secondary data: internal and external secondary data.
Information compiled inside or outside the organisation for some purpose other than the
current investigation. Data that have already been collected for some purpose other than
the current study. Researching information which has already been published. Market
information compiled for purposes other than the current research effort; it can be internal
data, such as existing sales-tracking information, or it can be research conducted by
someone else, such as a market research company.
Secondary source of data used consists of books and websites

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CHAPTER- 4
DATA ANALYSIS

Based on the type of data collected and the target segment with the appropriate statistical
methods, inference should be made. The response set of one variable is compared with
another set of variable to ensure a detailed analysis of data.

We have used the SPSS software to analyze our data accurately. After the respondents
had filled in the questionnaires, the data was entered into the software and the analysis
was made thereby.

FIELD WORK

Fieldwork plays an important role in collecting the data .As our sample size was
determined to be 6 and we were a 6-member team, we decided to divide the work equally.
Some important points which each member kept in mind while doing the fieldwork.- To
make the respondents comfortable before questioning him by introducing our selves as
students of Amity business school and ensuring the respondent that all information
collected is only for academic purpose and will be kept confidential Ensure that we fill
the questionnaires our selves Not to lead a person into any preconceived notion Not to
influence the respondents answers in any way/form. Use simple language, so that the
technical language does not intimidate the respondent.

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PRIMARY RESEARCH

The primary objective of this chapter is limited to expressing its research results,
analysis and interpretation of the gathered data. The following chapter presents
details review of the data collected and its relevance in drawing inference. It
hence stands the valuator of the hypothesis generated in the earlier chapter.

PILOT TESTING

The first stage of the data gathering study was our “dummy run” – a pilot study.
This helped the researcher to throw up some inevitable problems of converting
the design into reality. An experiment or a survey can and should be piloted on a
small scale in virtually all circumstances. We soon made changes to the
questionnaire like reduce the number of questions to reduce time, also provided
income under brackets instead of asking for absolute figures.

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CHAPTER 5
FINDINGS AND ANALYSIS

ICICI Bank Limited (ICICI Bank)

ICICI Bank Limited (ICICI Bank) is a trendsetter in the use of banking technology in
India. Since 1999, ICICI Bank leverages comprehensive datacenter availability and data
protection solutions from Symantec. Using Veritas Storage Foundation and Veritas
Cluster Server, the bank is achieving 99.9 percent application availability and 99.99
percent uptime for its server infrastructure. The bank relies on Veritas NetBackup and a
full range of agents and options for data protection. The solution is delivering tangible
results, including a 50 percent reduction in the time to rebuild corrupted servers and 25
percent annual growth in data volume without any increase in staffing resources. Seeking
greater adaptability, the bank recently turned to Symantec for an enterprise licensing
agreement that lowered software infrastructure costs by as much as 20 percent.

A leader in banking technology

ICICI Bank seeks to be at the forefront of technology usage in the financial services
sector. Information technology is a strategic tool for business operations, providing the
bank with a competitive advantage and improved productivity and efficiencies. All the
bank’s IT initiatives are aimed at enhancing value, offering customer convenience, and
improving service levels.

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ICICI Bank (NYSE:IBN) is India's second largest bank and largest private sector bank,
with assets of USD 43 billion as of September 30,2005. ICICI Bank offers a wide range
of banking products and financial services to corporate and retail customers through a
variety of delivery channels and through its specialized subsidiaries and affiliates. Areas
include investment
banking, life and non-life insurance, venture capital, and asset management. Specifically,
ICICI Bank is a leading player in the retail banking market and has over 14 million retail
customer accounts. The bank has a network of 600 branches and extension counters and
2,060 ATMs.
ICICI Bank is growing rapidly, in part through its online service offerings, and is
considered a technology trendsetter in the Asian banking industry.Boosting Datacenter
Availability for Largest Private Bank in
It is the first bank to offer Internet banking services in India. It is also extending online
banking to rural communities via kiosks.

A loyal Symantec customer for six years and counting

The bank set the stage for its technology ascendancy in 1999 when it consolidated its IT
operations to a new data center in Mumbai. Pravir Vohra, Senior General Manager of
ICICI Bank’s Technology Management Group, was a key decision maker in the planning
for the new data center. “We took a hard look at the bank’s requirements well into the
future,” he says. “High availability for our customer-facing applications was on the top of
the list. If my customers cannot transact, nothing else matters. An outage can be highly
detrimental to the bank’s reputation.” As a result, the bank’s internal applications needed
to meet high availability requirements. And all banking data had to be protected and
recovered in case of disaster. In building the bank’s Mumbai datacenter, Vohra looked
first to establish relationships with suppliers that could solve a whole class of problems,
not just those suppliers who offered point solutions. “To build a worldclass infrastructure,
we needed world-class software to manage our applications and storage,” explains Vohra.
“We standardized on Symantec products for our data center because they have a well-
deserved reputation as being best in class. Also, Symantec supports all major platforms,

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so we can deploy a single set of tools across the entire infrastructure, simplifying
administration and reducing training costs.” An additional decision factor was
Symantec’s broad range of services, from consulting to onsite education.

Targeting high availability for the end user

To meet its datacenter availability goals, ICICI Bank runs its customerfacing services and
key enterprise applications such as Finacle Core Banking (Infosys), FinnOne Retail
Loans System (Nucleus Technologies), CTL Prime Credit Cards Processing System
(Card Tech Limited), and SAP on highly available servers. The data center has several
Sun Fire 15K, E6900, E2900, and E6500 enterpriseclass servers and various Sun Fire
mid-range servers—25 in all— running the Solaris 9 Operating System. ICICI Bank
deployed Oracle 9i database and Oracle Real Application Clusters (RAC) to provide a
robust database component for its enterprise applications, while other applications such as
Internet Banking and Customer Relationship Management use Microsoft SQL Server
2000 Enterprise Edition. The FlashSnap feature of Veritas Storage Foundation allows
ICICI Bank to lower its total cost of ownership through more efficient use of its storage
infrastructure. “The data for the Finacle application is stored on a new HP Storage Works
XP 12000 disk array,” Vohra relates. “We make periodic point-in-time copies of the data
so that we can restore the database in case there is a corruption. While the HP
StorageWorks XP 12000 the entire infrastructure, simplifying administration and
reducing training costs.” An additional decision factor was Symantec’s broad range of
services, from consulting to onsite education.

Targeting high availability for the end user

To meet its datacenter availability goals, ICICI Bank runs its customerfacing services and
key enterprise applications such as Finacle Core Banking (Infosys), FinnOne Retail
Loans System (Nucleus Technologies), CTL Prime Credit Cards Processing System
(Card Tech Limited), and SAP on highly available servers. The data center has several

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Sun Fire 15K, E6900, E2900, and E6500 enterpriseclass servers and various Sun Fire
mid-range servers—25 in all— running the Solaris 9 Operating System. ICICI Bank
deployed Oracle 9i database and Oracle Real Application Clusters (RAC) to provide a
robust database component for its enterprise applications, while other applications such as
Internet Banking and Customer Relationship Management use Microsoft SQL Server
2000 Enterprise Edition. The FlashSnap feature of Veritas Storage Foundation allows
ICICI Bank to lower its total cost of ownership through more efficient use of its storage
infrastructure. “The data for the Finacle application is stored on a new
HP Storage Works XP 12000 disk array,” Vohra relates. “We make periodic point-in-
time copies of the data so that we can restore the database in case there is a corruption.
While the HP StorageWorks XP 12000 continues to innovate, so we continue to stay at
the edge of data protection technology without having to work at it.” As data volumes
grow at a rapid rate for ICICI Bank—currently 300 gigabytes a month—the bank is
challenged to backup increased data volumes without extending its backup window.
“With round-the-clock operations, we only have a few hours during the night to complete
our backups,” he says. “Fortunately, we’ve been able to accommodate a 25 percent
annual growth in data volume with no additions to our staff, thanks to the scalability of
NetBackup.” ICICI Bank has supplemented its NetBackup installation with database
agents for Oracle, Microsoft SQL Server, and SAP. These backup agents
take advantage of the unique features and structure of each database to minimize
disruptions to the applications that use each database while ensuring complete protection
of the information.

Shared Storage Option leverages tape library

In 2003, lengthening backup operations began to encroach on production time, affecting

application performance. The NetBackup Shared Storage Option came to the rescue.
It allows ICICI Bank to gain more efficiency from its HP StorageWorks ESL 712E
robotic tape library by virtualizing the tape drives into a common resource pool that can
be shared by multiple backup jobs. Even with the efficient usage of the tape drive
infrastructure, it can still take a long time to recover a file from tape just due to the

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inherent nature of tape drives and tape retrieval speeds.To address that problem, Vohra
ordered an EMC CLARiiON 720 virtual disk library, a disk-based backup system that
significantly reduces the time needed to restore a file and enhances backup speeds by a
factor of four times. Will the VTL force ICICI Bank to change its backup software? “Not
at all,” Vohra responds. “Once again, Symantec’s heterogeneous platform support gives
us the flexibility to adapt the IT infrastructure to our evolving needs without changing our
software tools. NetBackup has builtin support for disk-based backups, so we don’t have
to buy anything else.

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New Standard in Service for Standard Chartered Bank

Key Benefits:
1) Enhanced the customer experience
2) Improved the daily work experience for employees
3) Made channel distribution more effective

“Oracle’s Siebel Finance encapsulated best practice CRM from a banking

perspective,” said Parker. “It gave us the firepower we needed to reach our goal of
becoming the preferred partner of our customers.” – Steven Parker, Head of Customer
Sales and Service for Consumer Banking, Standard Chartered Bank

In Hong Kong, where Standard Chartered Bank PLC generates approximately one-
third of its revenues, the banking environment has changed rapidly in recent years. This
has forced financial institutions to become more nimble and creative with customer
offerings--or to pay a high price for failing to do so.

Beginning in the mid-1990s, the Hong Kong Monetary Authority (HKMA) deregulated
interest rates on short-term time and savings accounts, as well as demand deposit
(checking) accounts. Interest rates became highly competitive, but parity products made it
much more difficult to attract or retain customers based on rates alone. At roughly the
same time, virtually all of Asia was impacted by the “Asian Economic Crisis,” a major
economic downturn that sent property values plummeting by up to 60%. Sales volumes
slowed to a trickle, creating fierce competition among banks for a smaller number of
loans. This squeezed margins razor thin, as financial institutions fought to retain their
customers.

There was also a considerable amount of industry consolidation, as financial institutions

merged or acquired other banks that were a good fit. Even Standard Chartered got into the
act, acquiring the assets of Chase Manhattan Bank’s Hong Kong-based retail banking

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business. The many mergers and acquisitions worldwide further fueled competition from
larger institutions with deeper resource.

In Standard Chartered’s , it also forced the bank to deal with the staff issues that often
arise as two corporate cultures are blended together.To take advantage of this demand,
bank sales staff had to transform from strictly order takers into financial planners or
investment consultants. Again, Standard Chartered had the added challenge of integrating
many disparate products and channels following its acquisition of Chase’s retail business
in Hong Kong.

The final major development over the past few years--and one that was unique to Hong
Kong--was that in the period immediately prior to Hong Kong’s return to Chinese
sovereignty, several hundred thousand wealthy customers left the city for a time to live in
Australia or Canada, before deciding to return once things were stable.

For all of these reasons, banks throughout Hong Kong began to emphasize higher
service quality in their dealings with customers. Standard Chartered Bank knew that to
stay ahead of some of its more agile competitors and retain its best customers, it needed
to reinvent itself in the area of service. The company turned to Oracle [Siebel] to address
these many challenges.

“In the past, it was fine to have relatively standard products and sell them in standard
ways--and the ample margins would ensure a profit,” Parker remarked. “We decided that,
strategically, the ground that we needed to play on was brand assurance, customer focus,
and quality service.”

The bank recently moved swiftly and decisively to develop and implement a sweeping
change program called Customer One. Designed to achieve market differentiation and
enhance employee satisfaction, the ambitious business transformation strategy sought to
strengthen the bank’s brand identity and help the bank become more customer-focused
and performance-oriented.

Replies to customer queries and service requests were often delayed, especially if the
requests required bank officers to search for information across databases created and
maintained by various bank departments or business units. More importantly, without a

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360-degree view of customer information, Standard Chartered’s banking officers were

unable to capitalize on day-to-day opportunities to cross-sell and up-sell additional
products and services based on unique needs or desires.

“With rising customer expectations, we needed to have the means to understand our
customers better,” Parker noted. “We had to find a way to provide more timely responses,
to tailor advice to meet individual requirements, and to help guide customers in
considering various products that would suit their particular requirements.”

Programmed for Change

Oracle’s Siebel customer relationship management (CRM) solution was at the core of
the bank’s Customer One change program.

Launched in 2002, Customer One involved no less than a complete reengineering of

the bank’s sales and service processes within its consumer banking segment. As Parker
and his team saw it, the bank was starting from a position of a “transaction handler,” with
staff members being largely reactive, product-focused order takers--with a very short-
term view. The goal of Customer One was to shift the mindset, then shift the philosophy--
enhance the customer experience by becoming a proactive, customer-focused relationship
seller, ultimately transforming the bank into the right partner for its customers.

Staff members are expected to be responsive to the intentions of each customer--

understanding and anticipating needs. Bank representatives don’t simply sell products and
services, but rather are in the business of providing financial solutions that facilitate a
long-term view of customer requirements.

For example, using a Siebel CRM feature called micro marketing, the professional staff
or branch personnel could conduct a search to determine which customers might have
investments in Japanese unit trusts. The bank might then contact these individuals if it
offered a Japanese guaranteed fund or similar insured product. Branch managers also
have instant access to automated sales performance reporting, giving them visibility over
how their staff is performing and what sales are. Standard Chartered can use this
information to better allocate human resources and to improve sales and service.

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 BANKING INDUSTRY

“Oracle’s Siebel Finance encapsulated best practice CRM from a banking perspective,”
said Parker. “It gave us the firepower we needed to reach our goal of becoming the
preferred partner of our customers.”

The bank also expected Customer One to help improve the daily work experience for its
employees. The tremendous amount of manual processing required to open accounts and
meet service requests had resulted in growing employee dissatisfaction, underscored by
an attrition rate that peaked at 30 to 40% annually.

At Standard Chartered Bank, the Customer One change program is viewed as an

essential part of a journey to make the bank more customer-oriented and relationship-
focused--resulting in a higher standard of service and a winning strategy in a challenging
marketplace. To Parker and other top managers at the bank, that journey has just begun.

Banking on Measurable Results

The transformation of the consumer banking sales and service environment at Standard
Chartered Bank branches in Hong Kong and Singapore has been remarkably successful.
From the beginning, the bank made it a priority to establish a number of quantifiable
measures of the program’s impact within the bank. In India also it is one of the successful
banks.

“Our key goals included improving the customer experience,

improving the staff experience, and making channel distribution
more effective,” Parker commented. “We’ve seen very good
increases in all three areas.”

For example, staff satisfaction, which once languished at 56%,

increased to 78% within two years, a solid gain of 39%.
Standard Chartered’s staff saw considerable improvement in the
efficiency of processes (some tasks were streamlined by as
much as 60%), their use of technology, and the ability to be
more professional in doing their jobs.

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 BANKING INDUSTRY

The rise in staff satisfaction helped drive down costly and

disruptive turnover by more than 50%. All of the bank’s branch
managers thought that the change program was a success.

On the customer side, the bank has seen dramatic

improvements. Sales conversion rates have soared by 56%. In
addition, the cross-sell rate among the highly desirable, affluent
customer segment-- which is critical for increasing customer
retention within this key group--climbed by 18%. Not
surprisingly, Standard Chartered Bank has seen its retention rate
among its best customers increase by 6.5%.

“To this point, our return on investment is already two to three

times the amount we spent on the entire change program,”
Parker declared. “From the start, we never focused on reducing
staff or cutting cost”. Their objective was to improve
customer interactions and increase revenue, and we have
managed to do a great deal in that regard.

Throughout the change program, the CRM solution provided by

Oracle [Siebel] has played a key role for Standard Chartered
Bank, deployed in both the bank’s branches and call centers.

The staff has a great tool in Oracle [Siebel] In the call center,
they’ve been able to make things much more efficient and
provide a more streamlined customer experience. In the
branches, the environment is completely different today. The
staff has a single view of the customer and can be more
proactive. Leads or service requests can be processed seamlessly
across all channels.

The bank is clearly sold on what CRM can accomplish in

elevating service levels above those of its competitors.

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 BANKING INDUSTRY

“We’ve come a long way, and we are delighted that we’ve been
able to transform the way that our staff serves customers,”
Parker noted. “We can be much more professional--build real
relationships and assist our customers in ways that we didn’t
even dream about in the past.”

Continuous Improvement

Although the formal change management program has now run

its course at Standard Chartered, the bank has grown it into an
ongoing operational process, with the goal of “out-serving” the
competition. To support continuous improvement, the bank has
established a Customer Experience organization, which
consolidates all of the process and design teams focused on
improving customer sales and service that implemented the
Customer One program. In addition, Standard Chartered has
established its own customer council, which is tasked with
helping front-line staff continue to streamline processes,
improve customer management, and further develop the
extensive capabilities offered by the Oracle’s Siebel CRM
platform.
Among the near-term focuses for enhancements are:

 �Installation
 of more “triggers”--Adding pre-approval and
pre-attrition indicators that alert the staff to opportunities or
potential problems raised by significant declines in customer
satisfaction

�Better-aligned incentives--Offering staff members larger

bonuses and other rewards that motivate them to push their
service performance higher, maintain their training, and
improve their interactions with customers

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 BANKING INDUSTRY

�Improved technical performance--Fine-tuning of the

application to speed response times and make the solution
even more usable by bank staff

With straight-through processing, the loan officer simply types

the data onto the screen and inputs the customer’s criteria, and
the system does the rest--scoring the loan and calculating
counter-offers as needed. With existing customers, many of the
screens are pre-filled with name, address, and so on. This has
reduced the personal loan application process from 30 to 40
minutes down to about five minutes.

Implementation Process

The implementation of this ambitious change program involved

several elements:

Deploying CRM
The bank initially rolled out Siebel Finance to more than 900
front-line and back-office staff across 90 retail branches and two
large call center facilities in Hong Kong and Singapore. Siebel
CRM, including Siebel Finance, provides Standard Chartered’s
staff with a 360-degree view of customers across the primary
consumer product lines and channels, such as branches or
automated teller machines. This enables employees to view a
customer’s history, products and services used, and preferences.

The powerful application also provides a solid platform for

analyzing data to use in customer management; lead and
opportunity management; targeted mail and phone campaigns
promoting specific products and services to precisely selected
groups of customers; sales tracking; and reporting.

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 BANKING INDUSTRY

Establishing New Business Processes

Standard Chartered Bank recognized that using its CRM system
properly would require additional work for its already
overloaded staff. The bank addressed this by simplifying and
automating a wide variety of tasks to free up time for the staff to
attract and serve customers better.

One of the innovations was adapting “straight-through”

processing that the bank already used for opening accounts to
other tasks such as issuing ATM cards or even handling loan
applications. Previously, if a customer requested a replacement
ATM card, for instance, a form had to be completed and
processed manually. In addition, the customer contact person
often had to follow up with back-office processing staff to make
sure that the card was sent.

“Now, using CRM automation, once the service request is keyed

into the computer, the order goes straight through to our legacy
systems, and the card is automatically mailed to the customer,”
Parker said.

Straight-through processing offers even bigger benefits in

streamlining loan applications and credit scoring.

“On the customer side, the bank has seen dramatic

improvements. Sales conversion rates have soared by
56%. In addition, the cross-sell rate among the highly
desirable, affluent customer segment-- which is
critical for increasing customer retention within this
key group--climbed by 18%.”

“The way that it used to work was a customer would fill out a
paper form,” Parker explained. “The loan processor would do

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 BANKING INDUSTRY

some credit scoring on the spot, but more manual processing

was required after the bank closed its doors for the day.”

The most time-consuming, energy-draining phase of the process

came once the scoring was completed.

Introducing Customer One to the Staff

With its complexity, the multilayer change program was not
something that would be easy to integrate into the bank’s
workflow, nor to get employees to adopt. Here again, Standard
Chartered Bank recognized the challenges--and opportunities--
and moved to introduce Customer One with exceptionally
intelligent and imaginative training and support.

The first phase was called “Customer Voice,” where Standard

Chartered helped its staff see what customers really thought
about the bank.

They showed our employees videos--presented from our

customers’ perspective--of how we were providing service at
that time,” Parker remembered. “Once we’d done that, we
presented a series of workshops that we called ‘Creating the
Future.’ Here, we demonstrated prototypes of how we would use
Oracle’s Siebel CRM solution to improve product delivery and
service quality.”

“The rise in staff satisfaction helped drive down costly

and disruptive turnover by more than 50%”

The bank gave employees plenty of opportunity to gain hands-

on experience with the prototypes, so that people could learn
how to be solutions providers rather than order taker sand
appreciate productivity gains and work quality improvements

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 BANKING INDUSTRY

made possible by Customer One and the supporting Siebel CRM

platform One of the most impressive training tools that Standard
Chartered created was “A Day in the Life of CRM.” Used in
the training workshops and focus groups, “A Day in the Life”
provided an outline of what a typical day would be like once the
CRM solution was in place. Employees learned how easy it
would be to maintain customer contact diaries, review calendars
and the latest internal and external news developments, generate
progress reports on sales in the pipeline, and maintain organized
lists of leads and opportunities.

Once the change program was implemented, the bank supplied

in-branch coaching to all employees using the system, as well as
refresher classroom training and Web-based instruction for those
who needed it.

Standard Chartered Bank PLC is a 150-year-old bank with more

than $120 billion in assets and 30,000 employees in 50
countries. It is one of the largest banks to target emerging
markets in Asia Pacific, South Asia, the Middle East, the United
Kingdom, and the Americas.

Standard Chartered Bank (SCB) previously used OnLine

Transaction Processing (OLTP) system, which facilitated and
managed transaction-oriented applications. "The system was
reliable but provided little scope for in-depth customer analysis,
which is the key to survive in the fiercely competitive financial
marketplace. It answered the financial queries and generated
reports at a broad portfolio level, which included total earnings,
debt situation, interest income, cost, fee income, and profits,"
said Sedjwick John Joseph, Head-Business Intelligence Unit,
SCB.

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 BANKING INDUSTRY

The bank realized that it needed to go a step further and deploy a

solution which it can use to analyze the huge volumes of data
captured by its OLTP systems. The idea was to search for
crucial nuggets of information from the vast amounts of
transactional data at its disposal to get the right information, to
the right executive and at the right time. This information can
help a bank take critical business decisions in the dog-eat-dog
financial world.

The bank's IT team looked at the business requirement in detail

and deduced that the organization needed a data warehousing
and analytical solution that would help analyze customer data to
enable fact-based decision making in areas ranging from
acquisition and risk management to cross-selling and portfolio
management. After evaluating a number of vendor offerings,
SCB decided to use a suite of products from SAS. It went for the
SAS Customizable CRM Solutions

SCB has over 2.2 million retail customers and over 1.3 million
credit card customers nationwide. It claims to be the first to
launch initiatives like a Global Credit Card and a Photocard in
India. Its products and services include cash management,
custody, lending, foreign exchange, interest rate management,
and debt capital markets for corporates. And credit cards,
personal loans, mortgages, deposit taking activity, wealth
management services to individuals and medium-sized
businesses, and mutual funds to retail customers

Standard Chartered Bank uses SAS

Customizable CRM Solution.

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 BANKING INDUSTRY

SAS feels that a company has to adopt a truly customer-centric

approach to manage its business. It means that fundamental
decisions on strategy and resource allocation must be based on a
detailed and accurate understanding of customers and the overall
market. It feels that customized CRM solutions can provide
access to the information you need to come out on top.

The customizable CRM solution can:

Integrate information from multiple sources, eliminate data

errors and redundancies, tailor data for efficient access and
analysis, and reduce the complexity of data management.

Anticipate customer expectations and predict customer behavior

like, propensity to purchase, lifetime profitability, and credit
risk.

Allow to cross-sell and up-sell. It can help identify the best

candidates for purchasing particular combinations of products
and services, and focus the marketing efforts on a more
receptive audience.

Combine business rules and analytic models to accurately

segment and profile customers, and construct a personalized
strategy for each group.

Deliver customer intelligence into front office systems to enable

smarter customer interactions through various channels.

Combine behavioral insights derived from analytics with

attitudinal data obtained from online and offline customer
surveys.

Findings-

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 BANKING INDUSTRY

The graph below shows the Market share of the Nationalized

and Private Banks in India and the share of Standard Chartered
Bank…

Market Share

Private/Foreign Standard
Banks Chartered Bank
4% 1%

Nationalized
Banks
95%

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 BANKING INDUSTRY

42
 BANKING INDUSTRY

SWOT ANALYSIS

SWOT Analysis of Standard Chartered:

Strength:
Standard Chartered has completed 150 years This is because it is
giving tremendous support of its customers in India and abroad.
1. Standard Chartered operates in Asia, Africa, and South
America (global coverage).
2. In India SCB has been marked as the second most
profitable MNC after HLL.
The first four cash withdrawal per month from a non-
SCB ATM are free of cost.
3. The Cannought Place branch of SCB is opened 365 days
& 24 hours.
Weaknesses:
1. Its all branches and ATM’s are less in number which,
sometimes brings constraints in its success
2. The term and conditions having accounts are too long
and too complicated
3. The bank is not paying proper attention on its publicity
and promotion.
Opportunities:
1. By reducing it’s A.Q.B (Average Quarterly Balance), it
can create monopoly in the market.
2. The bank can get good amount of business from west
and north Delhi.
3. The RBI relief bonds which bank provides are very good
& safe investments.
Threats:

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 BANKING INDUSTRY

1. The entry of private players like HDFC, IDBI etc are

also possess competition for the bank.
2. ICICI bank is posing a tough competition for SCB. It is
becoming the favorite bank of many people
3. The amount with which saving bank account can be
opened is too high for a middle income group family and
because of that only a few people are able to have an
account with the bank

GENERAL FINDINGS:

• ATM Facility is more widely used by customers belonging to

Private/Foreign Banks as compared to Government Banks.

• Customers value Efficient Service over every other aspect, this

is far more important than the number of ATM machines, Staff,
Décor of Bank.

• Reputation of Bank is most important when it comes to choosing

especially a Private Bank.

• The general perception is that Private Banks provide better

services as compared to a Government Bank.

• People realize that Private Banks are as safe as compared to

Government Banks.

• Advertisements and Freebies can be used to attract more

customers.

• The Biggest competitors of the Bank are ICICI Bank and HDFC
Bank

• ATM Facility is most popular way to transact with the Bank.

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 BANKING INDUSTRY

• The Number One Reason of people choosing Standard

Chartered Bank is the Brand Name/Reputation of the
Bank.

Hence it should be careful that the Brand name and

Goodwill the Bank has earned is not diluted.

• The Bank has been very successful in enlarging

its customer base during the last couple of years.

• The Bank is also involved in marketing activities which

serves as a medium of advertisement for the Bank. These are as
follows:

1. Extended happy hours at certain pubs in Delhi for

the Bank’s account holders.
2. Gift Vouchers on making utility payments, such as
cell phones, electricity and MTNL bills.
3. Free Gifts like T-shirts/watches to its customers.
4. Free add-on cards for relatives.

• Customers who are more profitable to the Bank

(High Value Customers) are provided special facilities.
Priority Banking is meant to serve these high value
customers.

• The Bank prides itself with the ability to provide

differentiate products in the crowed market of saving
accounts. Bank offers free insurance , special co-branded
debit cards (Smart fill Debit Card) which makes it’s product
unique.

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 BANKING INDUSTRY

• The level of service in terms of delivering whatever is

promised, fast response in case of problems, is the most
important benefit that the customers seek, from the Bank
they have a Savings Account with.

• Network reach and visibility of a Bank is a very important

criterion for the customer while opening a Savings account.
We can also conclude from our analysis that network reach
in terms of Branches and ATMs is directly proportional to
the market share in case of Private Players.

• In case of a new customer, if a bank approaches it first for

opening a Savings account with them, then there is a good
chance for the bank of getting many future businesses from
the deal.

• Aggressive Marketing is the key to increasing the market

share in this area, since the market has a lot of potential both
in terms of untapped market

46
SBI and its CRM technological involvement
SBI has seen a shift in transactions from branches to alternate channels such as automated
teller machine (ATMs) and internet. Transactions in branches are now down to 60% as
against five years ago when almost all transactions were done through branches. SBI,
with its network of 5,700 ATMs, is the single largest network in Asia Pacific. The large
crowds that we witnessed at branches at the beginning of the month are now coming
down. Bank was now looking at providing a facility where demand drafts can be ordered
through an ATM. Branches are also witnessing a reduction in transactions because retail
loan processing has been centralised. With transactions moving outside branches, the
bank with a network of over 9,100 branches is looking at converting branches into
relationship centres. It has outbound marketing team of over 150 of which 30 are
dedicated for selling home loans.

Database Solutions: Niche Features and Website Integration

Two types of implementation scenarios exist for SBI DataWeb Database

Solutions.Thefirst is a complete CRM (Customer Relations Management) solution. The
price point and ease-of-use will make these solutions a real possibility for our target
market, rather than a excessively expensive product with more features than they would
ever use. The second scenario for implementation is a "fill-in-the-holes" of your current
IT landscape. SBI Database Solutions are delivered in a modular format. One or many
modules can be purchased. These modules share data with SBI DataWeb Websites to
provide a complete web-to-desktop IT solution. Unique features have made the current
SBI DataWeb Database Solutions attractive to people in our target market that need to
meet specific needs. A complete list of these unique features is in the SBI DataWeb
product document.

System Drawbacks

When SBI computerized its branches in the early 1990s, it set up individual LANs at the
branches, rolled out the new Bankmaster system, and trained the staff on its use and
maintenance. The branches were not networked, and each had its own database. The
Bankmaster system was customized to meet the particular requirements of each branch.
Over the years, the branches further customized these individual systems and built a
myriad of applications and processes to supplement the existing functionality. In essence,
each branch did its own front- and back-office operations, which led to little consistency
across the organization.

Processes within the branch were effective but still highly manual and paper based. There
was little straight through processing and thus little insight into inefficiencies and where
errors might be hiding. A major drawback to this system was the time consuming nature
of accomplishing a variety of simple tasks, from closing the booksto servicing customer
requests. In addition to these business issues, there were challenges on the technology
front. For example, development work, application maintenance, and upgrades often
occurred at the branch and could not be managed centrally.

Implementing the Solution

SBI has a history of adapting to change. From the computerization of the early 1990s to
the current project, rarely has the bank enjoyed a period when the status quo has been
acceptable. In addition, the bank is very top driven. The current chairman, Arun Kumar
Purwar, is known as a passionate and dynamic leader and a strong advocate of
technological innovation. His support has been a key factor in the success of this project.
Following the signing of the contract with TCS, teams from both organizations were
formed. The first job of the bank’s team was to come up with a gap document, which was
presented to the TCS team. This allowed TCS to begin the necessary development work,
as significant customization was required. While the core solution was from FNS, the
final solution is more accurately a hybrid, incorporating millions of lines of new code
from TCS.

Solution Customization

As part of the arrangement with FNS, TCS got the rights to modify the source code as
necessary. Before the customization could take place, however, a few significant changes
had to be made. One example relates to some of the fundamental fields within the FNS
application. The sizes of the bank number, general number, and user number fields were
in adequate to meet the needs of SBI. While this issue sounds trivial, it required TCS to
go through the entire code, assess the impact, and make sweeping changes to the base
FNS code including architectural components. Once these technical changes were made,
TCS had to undertake the functional customization. This was a reflection of SBI’s own
policies, practices, and products. Two examples are worth noting. At SBI, a majority of
transactions have to be authorized by another officer (maker/checker concept) or
individual within the bank; thus, each transaction must go through two people before it
takes effect. This simple policy required massive customization, and the challenge was to
meet this requirement while keeping the network load low. The second example relates to
the bank’s requirement that the branches be able to continue to function, albeit with a
limited transaction set, in the event of a network outage or connectivity not being
available to the host. In the event of a problem, the branches operate as normal and
transactions are stored in a local server to be posted to the central server once
connectivity is restored. The solution is also optimized to operate across a variety of
network solutions including leased lines, dial-up lines, and VSAT. Additional
modifications were made in specific business areas to handle the volumes and
complexities of the branch-based cash, check, and clearing operations. Changes also had
to be made in terms of defining new products and in the interest calculation, as well as to
the foreign exchange operations, because of the specific reconciliation requirements of
SBI. Many of the changes eliminated manual entry at the branches and streamlined
processes. For example, the bank wanted to provide a batch facility to process
transactions, which was not necessary with the previous system. A final change to note
related to reporting. The core banking system provides for the generation of reports at the
end of the day, but some branches required online reports or delivery before the end of
the day. In some cases, individual branches were allowed to generate custom reports,
enabling them to function more autonomously.

The Implementation

As of December 1, 2005, 6,611 out of 13,984 branches (47%) were running on the core
banking system. Of these, 2,549 are SBI branches, while the remaining 4,062 come from
the associate banks. Four of the associate banks. State Bank of Patiala, State Bank of
Travancore, State Bank of Indore, and State Bank of Saurashtra are now completely on
the new core banking platform. For the initial rollout, SBI Group runs eight separate
databases with eight instances of the core-banking platform. The long-term vision is to
merge these onto a single platform, ideally with a single database, although the technical
feasibility of having nearly 14,000 branches on a single database is still to be determined.
Before we discuss the process of bringing branches onto the core system, it is important
to note that the implementation team also had to build interfaces to a myriad of systems.
These include everything from the State Bank Electronic Payment System (STEPS) to
standalone systems such as those for diamond financing operations in some branches.
Building interfaces, however, is only one part of the implementation process. The main
body of work relates to bringing SBI Group’s vast network of branches onto the core
system. To do so required the adoption of a factory approach, employing an assembly-
line process to facilitate the rapid migration of branches.

Change Management

Although SBI is in the early stages of its business process-reengineering project, there is
still a transformation under way because of the core project. In anticipation of this, TCS
and SBI dedicated significant resources to a change management program, with a major
focus on staff training and education. Since the role of the branch is being fundamentally
overhauled, it is important to bring the staff and their respective unions on board as much
as possible. From a work activity perspective, the migrated branches are quite similar to
the originals, although the new system is more user friendly and the "single window"
allows for better customer service. However, a degree of control has been taken away
because operations such as day-end processing and the validation process have been
taken out and sent to the data center. Staff roles have had to change in line with these
changes, as individuals become focused exclusively on banking tasks as opposed to the
multiple hats they wore in the past. For example, end-of-day closing and related IT
activities are no longer managed at the branch. A centralized business model will bring
changes to the organization, but it is too early in the BPR process to define the full scope
of these changes.

BUSINESS BENEFIT DESCRIPTION

Technology  A large, scalable technology infrastructure for the
future
 Standardization of platforms
 Ability to easily introduce new applications such as a
planned payment gateway
 Improved IT governance
Process  Streamlining of processes across the group and a
significant reduction in manual activities
 M
 ultichannel, centralized view of accounts and
transactions across customer relationships
(This "single view" of the customer will be available once
the planned deduplication process
is completed.)
 Broader range of products and faster time to market
 For corporate customers, an interface to the ERP
system and also direct interfaces to the SWIFT and
RTGS systems (The system also provides the ability
 to view the online status of corporate transactions.)
 Improved customer response time and a single-
window concept within the branch
 Reduction in processing time, errors, fraud, and
corruption

Overall  The SBI Group now has a single platform for group-
level consolidation of SBI and its associate
banks.
 A common platform allows the group to realize
synergies and economies of scale.
 Customers can build loyalty to SBI as an integrated
entity, as opposed to their branch. This
anytime/anywhere banking makes SBI a formidable
competitor because of its enormous domestic reach.
 SBI branches are now channels and focus on value-
added activities around sales and customer service.
Noncore tasks and processes have been removed, and
new services such as the Grahak Mithra meeter-
greeter have been introduced to assist customers.
 FUTURE OUTLOOK

It is too early to make any clear determinations about the future of SBI. For the remainder
of 2005 and 2006, SBI will be focused on the rollout. Ensuring success is crucial for any
and all future objectives. That stated, the bank has indicated a number of other priorities
that will occur concurrent with or following the completion of the core rollout:-

 BPR- Business process reengineering is part and parcel of the core banking project
and will drive further process changes. BPR will likely extend beyond the life of the
core project and will complement the technology overhaul.

 New solutions- As part of the project, SBI is implementing a new trade finance
solution. Going forward, the bank has indicated interest in HRMS, a payment
gateway, and data warehousing.

 International branches- SBI is in the process of rolling out an international branch

banking solution to its overseas network. This is an Infosys solution and will help the
bank further its interests abroad. SBI will also address other areas, but these are some
of the more salient. Beyond technology and business concerns, the bank will also
have to contend with staff and union issues. Although natural attrition, voluntary
retirement, and reduced hiring have helped pare down staff numbers, the bank will
eventually require employees with the skills and training necessary to operate in this
new environment. Managing this transition will be difficult in the highly politicized
labor environment of India, and it will be an interesting test for the bank. On a
positive note, the transformation of SBI will make the bank a far more formidable
player, both domestically and internationally. It will be better prepared to fend off
competition from local and foreign players and will face no technology limitations if
it adopts an acquisitive strategy. SBI has taken the early steps toward becoming the
local champion its size and market position have ordained it to be.
HDFC BANK

The new number one bank is HDFC, the new private sector bank climbing up a notch
from number 2 last year. The bank has made steady progress up the listings, from an
inconspicuous number 12 in 1996-97 to number one in 2002-03. The thrust on retail on
both sides of the balance sheet continued to gain momentum, thereby allowing the bank
to grow as well as to expand margins. Moreover, despite the shift to NPA recognition
norms of less than 90 days, the bank NPAs as a percentage of net advances is 0.4 per
cent.
Simply the Best

Quality is a recurring mantra at HDFC BANK, which is evident in its earnings,

deposits base, credit profile, and growth rate. That's why it's India's Best Bank.

Quality may be one of the more abused buzzwords in the corporate world of product and
service delivery, but then when you're talking about India's number one bank, it's easy to
see the correlation between the top dog status and the quality mantra-which is a recurring
theme amongst the bank executives, whether they're talking quality credit, or quality
deposits, or quality earnings or, to sum it all up, quality growth. That's one big reason
why the stock markets adore this counter, which is evident in the unabashed praise equity
analysts are willing to shower on HDFC Bank.

"It is a unique bank, in a sense that it is focused not just on growth, but on quality
growth,". One of HDFC Bank’s most notable features is that it's still one of India's fastest
growing banks, even after reaching a balance sheet size of Rs 30,000 crore. And there's
little reason why this trend won't be maintained. The growth isn't just reflected on the
retail side-which grew by 131 per cent during the quarter-ended September 30, 2003-but
is amply visible on the wholesale front as well, which has been growing consistently in
the 10-15 per cent range. ''With the expected economic recovery that growth rate should
accelerate now. As its overall market share is still at low levels (around 2 per cent), this
optimism seems justified.
If you're still wondering what ''quality growth'' means, it's just that HDFC BANK has
been growing rapidly without compromising on asset quality. To be sure it scores high for
its low net NPAs and loan loss cover. This is because of the strict risk control
mechanisms in place, one amongst them being an internal rating model. ''We have our
own rating system based on the S&P 500 rating model and lending is done. Though
HDFC BANK decided to adapt the new NPA recognition norm from the second quarter
of the current year as against the regulatory deadline of March 31, 2004, its net NPAs are
still low at 0.37 per cent. ''Our general loan loss provisions are also around 0.90 per cent
against the regulatory requirement of 0.25 per cent

India-based HDFC Bank is on a growth path, adding about 100,000 customers per
month--a 30 percent growth rate each year--and today has a base of more than 8 million
customers. Executives attribute this success to a focused acquisition strategy, led by a
rapidly expanding branch network across a wide geographical area and a strong sales
force.

The bank is among the top players in just about all the business segments it participates
in, and its performance and use of IT have been acknowledged through awards by
publications in India and overseas, says Ajay Kelkar, HDFC Bank's vice president of
marketing. Although the bank was succeeding at acquiring new customers through its
branch and sales channels, it was just as important to strengthen relationships with
existing customers. "We believed that the traditional ways of identifying customers and
reaching out to them were not effective enough. The bank also realized that it was more
cost-effective to sell to its existing base of customers instead of going out to attract new
customers. Cross-selling would also help the bank control attrition levels." The biggest
challenge when HDFC Bank started on this journey was leveraging its internal customer
base by segmenting it and improving returns on campaigns, according to Kelkar. "The
[idea] was to begin analytical marketing with a focused effort toward launching
campaigns at greater velocity," he says. What this meant was the solution had to be easy
for the marketing team to learn on the job and it had to be scalable across marketing
goals, technology, and users.
Minimal coding was one of the most important criteria, so the bank selected Unica's
Affinium Model and Affinium Campaign tools, which allow users to employ the
Universal Dynamic Interconnect technology and drag-drop facilities of the system to
manipulate content from multiple databases. The tools also allow simultaneous build-and-
launch campaigns. The entire implementation took about three months, including system
integration tests. "The Unica model provided the edge to create robust models in the
initial stages of launch as the data knowledge aided the building of models."
Within the first three months, the bank saw a 60 percent reduction in the customer
acquisition costs on the cross-sell of products to existing customers. Then the company
employed life cycle--based campaigns for credit cards using a scorecard built in Affinium
along with a multiwave campaign and achieved a 30 percent incremental activation
increase. About 10 days after a new cardholder is approved, inactive members are
identified. They are segmented into distinct groups and sent targeted offers via their
preferred channel--email, direct mail, or SMS (short message service). HDFC Bank
increased campaign volume by more than 200 percent in the first six months and by 500
percent in FY 2005.
The bank was able to increase its campaign volume through the automation process and
its ability to leverage the template and reuse all the pieces. Giving customers something
relevant will help differentiate the company's campaign from the countless other ones
they receive on a daily basis. The bank knows the customers want this particular card and
is leveraging this knowledge to the benefit of both parties, says Kelly Fiedler, Unica's
director of solutions and customer marketing. "Customers recognize [that the bank
understands] them and their needs, and provides the right solution for them at the right
point in time. What's really impressive is its vision, its goal of increasing profits through
deeper, stronger customer relationships."
The Payoff

By using Unica's Affinium products HDFC Bank:

� achieved an incremental credit card activation rate of 30 percent;
� boosted incremental customer retention by 4 percent;
� increased campaign volume by more than 200 percent in the first six months of
deployment and by 500 percent in FY 2005.

HDFC Bank which started in 1995 with its technology platform already in place. When
TimesBank merged with it, HDFC Bank had to integrate the latter's systems, customer
base, reissue cards and cheque books and completely transfer the processing to its own.
This bank is talking centralised processing, 24X7 real-time availability and Web-enabled
open systems. That means offering customers the ability to transact via the branch, the
ATM, telephone, the Internet, and the mobile phone. All these channels are integrated
with the bank's own host systems.
The integration meant several modifications in existing processes, says C.N. Ram, Head-
IT, HDFC Bank. ``Generating and sending PINs to customers, sending cards, ensuring
adequate operational procedures to address customer complaints, setting up courier
arrangements, monitoring calls..., all had to be set up anew when implementing the multi-
channel system.'' We also needed to set up MIS systems that would enable the business to
study the profile of customers, generate timely reports and help senior management take
appropriate decisions.''
HDFC Bank uses iFlex's Microbanker and Finware for its core banking operations. It
plans to transfer to their new ``Universal Banking Services'' package as soon as the
acceptance tests currently under way are completed. The bank also uses their
Internet banking software.

It all adds up For a bank, the IT activities span three segments:

Back-office, which enables all transactions. For instance, a transfer of funds will involve
recording the transfer request, debiting and crediting the account appropriately and the
transformation by telex or demand draft. The back office enables the core activities of
banking transactions.
Distribution of the bank's products and services in the market. That is, enabling customer
interaction through the Internet, ATMs, the mobile phone...
HDFC's corporate customers need not visit the bank for many of their transactions either.
PC-based corporate banking lets authorised personnel in corporates open letters of credit
or pay suppliers and integrate the transaction with the ERP system.
The third sort of automation enables the business intelligence and CRM aspects of a
bank's business.
HDFC Bank can analyse channel profitability. Say, determine which type of customer
access which channel the most, and evaluate the cost-benefits of offering a service to
customers.
``For cash management, we use a package from a Pune company called CashTech. Our
Depository systems run on software provided by Mumbai-based Kalpataru. For loans, we
have chosen to go with Nucleus Software,'' Ram says.
To provide round-the-clock service and support to its customers, HDFC Bank has Unix-
based systems from Sun Microsystems as hosts for its banking software. It is in the
process of moving the application to a mainframe-class Unix machine (the E10000 from
Sun) in the near future, according to Ram.

Many other systems run on Intel-based Compaq or IBM hardware with Microsoft NT or
Windows 2000 as the Operating platform. The systems are run on a centralised basis with
the branches accessing them via telecommunication lines (leased lines from the DoT).
All departments within the organisation were automated simultaneously, Ram says:
``Since we work on a centralised database, the addition of new branches and new cities
made very little impact on the day-to-day operations of the other existing branches.''

HDFC Bank says it buys packages that meet a substantial percentage of user requirements
and the remainder is undertaken as customisation. For instance, the core functions
undertaken by the financial systems are: customer set-up and accounting, transaction
processing, general ledger, interface with other accounting systems for payroll, vendor
payments etc.

For other features such as CRM and datawarehousing, HDFC Bank intends to look at
other packages. HDFC Bank has been using automated banking solutions ever since its
inception. ``We have spent close to Rs 80 crore on bank automation in hardware,
software and systems. Our bank is highly technology-leveraged and IT is very strongly
woven into the fabric of our day-to-day operations,'' Ram says. ``The bank is now looking
to consolidate its technology platforms and create opportunities to sell its products and
enhance customer service levels
PNB’s IT-enabling journey

Punjab National Bank used a two-pronged strategy to IT-enable itself and support
present and future business needs. And along the way it picked up valuable information
and experience.
Punjab National Bank's (PNB's) come a long way since March 2000, when IT systems
were deployed only at 500-odd branches, and was very disparate. Only 35 percent of the
bank's business was computerized and a number of small software packages ran on
standalone PCs. Now in 2003, PNB has 101 branches on a WAN, deployed a core
banking infrastructure, and runs 175 networked ATMs. It has also deployed a reliable
security infrastructure that helps it conduct transactions within its branches without
worry. The journey doesn't end here, but along the way the bank's picked up valuable
knowledge and experience.

The beginning:
In March 2000, the penetration and use of IT was not very high at PNB. The bank used
seven different software, which ran on 13 different flavors of UNIX, on standalone PCs.
The 500-odd branches were not networked and only 35 percent of the bank's business was
computerized.The overall expertise in IT among users was low. The Central Vigilance
Commission (CVC) issued a directive to the bank to computerize at least
70 percent of its business by December 2000. This prompted the bank to work out a
strategy to tackle the daunting task in the short period of time.
ANALYSIS:
A SWOT analysis was performed and it produced the following results:

Strengths:

· The bank personnel would be able to readily embrace the use of IT.

· An existing pool of qualified knowledge-based personnel would contribute largely to

the IT initiatives.

· The financial position of the bank was very sound. There would not be any constraint of
funds to facilitate IT initiatives.

· The bank wasn't bound to too much legacy systems and equipment.

Weaknesses:

· Different Unix OS flavors in different branches.

· Different standalone financial applications on PCs at different branches.

· Lack of interoperability due to disparity in systems.

· Limited expertise on the software packages currently deployed. This increased

dependence on vendors.

· Systems audits were pending.

· Most branches did not have a proper LAN in place.

There was almost no WAN connectivity. The bank realized that there was a lot of
opportunity to create a stable IT infrastructure which would fuel future growth. But there
was also the need to honor the CVC deadline to computerize at least 70 percent of its
business within December 2000.The bank now has around 4,000 branches.

Action

PNB hired a consultant and devised a two-pronged plan of action. The plan comprised:

1. A short term goal - To meet the CVC deadline of 70 percent computerization.

2. A long term goal - To create a dependable core banking infrastructure and build a
nationwide network to connect different branches to the core infrastructure.

MEETING THE CVC DEADLINE:

In order to meet the CVC deadline the bank decided to deploy simple IT infrastructure so
that it could computerize 70 percent of its business within the deadline. The IT team
decided to implement an application, which could run on standalone PCs across its
nationwide branches. The application vendor would have to provide nationwide support
since the in-house IT team could not provide support at all branches.

PNB chose a product from a company called Nelito. It was a DOS-based, 'Partial Branch
Automation' application. Standalone versions were chosen since there weren't LANs in
place, and deployment of LANs at branches would take so long that the CVC deadline
couldn't be met. The interface was simple in design, and thus easy for the bank personnel
to use.

HARDWARE AND TRAINING:

The bank selected two hardware vendors and the application software was embedded into
the hardware to make them 'plug-and-play' capable. Nelito's package was deployed at one
branch at a time. And after each successful implementation at a branch, it was replicated
at a newer branch. Internal training sessions for the bank personnel were conducted with
the help of 14 training institutes. The source code of the product was tweaked to facilitate
deployment. The IT team was specially trained to re-architect the source code, and make
any modifications, improvements, value additions, and enhancements. Deployment at the
selected branches was over by December 2000.The bank requested CVC for an extension
of the deadline and was granted time till March 2001. By March 2001, 70.60 percent of
the bank's business was computerized.

LONG TERM STRATEGY:

In the long-term, PNB wanted a technology that would consolidate all its business
resources and sustain the bank's future growth. It also wanted to create its own network,
which would play a vital role in its success. Three consultants were appointed to review
technology options for long-term adoption. The verdict of the consultants was to deploy a
centralized core banking architecture.

CORE BANKING ARCHITECTURE:

On 30 March 2001, the bank used the services of Infosys for the deployment of Finnacle.
A core team was selected, which would be the heart of the project. Infosys trained 200-
odd personnel from a core team over six months. The core team modified and customized
the package according to its specific needs. It was then time to procure hardware. K.S.
Bajwa, Deputy General Manager, Information Technology Division, PNB, said, "It's a
standard international practice to procure hardware based on the type of software
applications that an enterprise has selected. This helps to match the specific computing
needs required by the software." PNB purchased servers, security infrastructure, and
storage equipment and decided to house it in its own central data center in New Delhi. A
lot of infrastructure from Cisco has been used to build the data center.

In April 2002 the bank rolled-out Finnacle in seven branches as a pilot venture. This was
done because the bank had seven different application packages, and it wanted to ensure
smooth migration of the data into Finnacle. By mid May 2002, all data from other
software was successfully migrated into Finnacle.
CULTURE AND TECHNALOGY ISSUES:

Issues were mostly cultural. Most staffers were used to working in a manual environment,
and some had worked in standalone environments. In the new networked environment,
personnel at the node/counter didn't actually 'see' the transactions updating in the various
account books.
This gave rise to a number of queries and suggestions from personnel. The bank
consulted IDRBT and RBI to verify the implementation success and it was reported that
the deployment was absolutely correct. Around six months later, the personnel felt that
the environment 'change' had done them good, and was used to working on the systems.
"There were a few integration issues when migrating to Finnacle, but the in-house IT
team was able to resolve them all. The pilot for the initial seven branches was a test-bed
for us.

SYSTEMS:

Before deploying the core banking architecture, PNB used servers which were NT-based,
from IBM, and from other vendors. The bankconducted benchmarking tests for Finnacle
on various server platforms. And it was satisfied with the performance of Sun's hardware
onSolaris. Sun's Fire servers, Solaris OS, and Oracle's RDBMS are now in use.

NETWORK DESIGNS:

Cisco has tied up with PNB to evolve the network design and implement a nationwide
network backbone to connect all its offices. Cisco will assist the bank in understanding
and implementing the various technologies associated with the project. The converged
network infrastructure will allow PNB to standardize the applications and software
needed to provide the banking services.
The network infrastructure will have a three-tier architecture. The network hub will be in
its data center. The various branches would beconnected to the data center using new-
world routing and switching technologies.
MOVING TO INTERNET BANKING:

PNB got a license from RBI to offer Internet banking services. Some of the RBI
preconditions were that the systems should be audited by an independent auditor, and an
independent and authentic agency must carry out penetration testing. The bank has
already had its systems audited by an external agency, and the penetration testing process
is still going on. In the process, PNB has developed the skills of its own personnel to take
charge of security on their own at a later stage. The bank will also recruit technically
trained staff to provide the necessary knowledge pool. With the Internet banking launch,
the bank will also strengthen its security policy.

STORAGE SYSTEM:

The bank has followed RBI's storage requirement guidelines. Provisions have been made
to store transaction data for around 10 years. In some cases, data is stored permanently.
Around 164 Sun enterprise class servers are used in a DAS architecture. The total
capacity is of multiple TBs.
The Sun hardware uses an in-built storage management tool. Bajwa feels that the bank
doesn't need a third-party storage management tool right now since the database is not too
large. However the bank is considering a storage management application from Veritas.

WAN AND CONNECTIVITY:

101 branches of the bank are on a WAN. The bank plans to put 500-odd branches on the
WAN this year, and in three years the WAN will have 2000-odd branches. The bank tried
a number of connectivity options. 802.11b wireless connectivity was installed in five
branches to begin with. "It was a comfortable experience, but suffered the inability to
interchange between the wired medium. Changing between mediums had to be
performed manually," said Bajwa.
The bank then explored the option of leased lines and used connectivity from MTNL and
BSNL. It also used Bharti's leased line between Mumbai and Delhi. The bank now uses
Reliance Infocomm's fiber optic backbone along with the leased lines in locations where
the optic fiber does not reach. However, the use of Reliance Infocomm's infrastructure
may be temporary. Bajwa says that his experience with BSNL's service is very
commendable.

NETWORK MANAGEMANT:

PNB has appointed HCL Com-net to carry out 24x7 monitoring of the countrywide
network. There's a live link between HCL Comnet's NOC and PNB's IT head office. The
network is monitored remotely and can also be viewed at the bank's IT facility, where a
separate monitoring system is used for the Base24 Switch. Reliance has set up a NOC at
PNB's premise to monitor its optic fiber network.

THE FUTURE:
These are some initiatives the bank wants to take in future:

· Set up a data warehouse and a data mart soon. It will take six months to achieve. IDRBT
has been involved as a consultant.

· It may need to set up a NAS and SAN to consolidate its storage.

· Disaster Recovery site may be built at Mumbai to create a replica of its data center. It
will take around six months to be functional.

· A call center will be set up as a CRM initiative, which uses information from the data
warehouse with the help of the Base24 switch.
KEEPING IT SECURE:

Security was especially important because the bank could afford no compromise. The
security architecture had to be robust, reliable, and scalable to meet current and future
needs. Cisco was chosen as the service provider who could meet these stringent
requirements. The bank uses a range of security products like Firewalls and IDSs from
Cisco for its security needs in its LANs and WAN. All data transactions between its
routers and switches are encrypted. It has appointed Ramco Systems as the security
integrator. The security integrator is responsible for the complete security infrastructure
and is answerable for any security breach or lapse. The bank will also appoint a security
administrator. Verisign will provide the necessary Public Key Infrastructure (PKI) to the
bank for secure transactions.

ADVANTAGE ATM’s:
PNB feels that ATMs offer many advantages over conventional branch-based banking
like low cost per transaction and customer convenience. To encourage this, the bank has
installed over 250 ATMs, out of which 175 are networked. A Base24 switch controls the
ATMs. The ATMs are connected essentially through VSAT links from Comsat Max.
VSAT links were chosen over leased lines because the bank felt that leased lines did not
provide 100 percent uptime, and VSATs were closer to that mark. "If a customer uses an
ATM and the line is not up, he/she will not be able to complete the transaction. The bank
can't take a chance with connectivity," said Bajwa. Comsat Max has signed an SLA of
maximum guaranteed uptime and dedicated bandwidth, to be increased whenever
required. PNB has formed a consortium of seven banks and has principally agreed to
share the ATM facilities amongst themselves. It will be available for public use soon.
A BRIEF PROFILE OF THE BANK

Widely known for its customer centricity, Canara Bank was founded by Shri Ammembal
Subba Rao Pai, a great visionary and philanthropist, in July 1906, at a small port in
Mangalore. The Bank has undergone various phases in its growth path over the last one
hundred years. The growth of Canara Bank was phenomenal, especially after
nationalization in the year 1969, attaining the status of a national level player in terms of
geographical reach and clientele segments. Eighties was characterized by business
diversification for the Bank. The eventful journey of the Bank was strewn with many
memorable milestones. Today, Canara Bank occupies a premier position in the comity of
Indian banks, emerging as the largest nationalized bank in India in terms of aggregate
business volume for 2006-07. With an unbroken record of profits since its inception,
Canara Bank has several firsts to its credit. These include:

� Launching of Inter-City ATM Network

� Obtaining ISO Certification for a Branch

� Articulation of ‘Good Banking’ – Bank’s Citizen Charter

� Commissioning of Exclusive Mahila Banking Branch

� Launching of Exclusive Subsidiary for IT Consultancy

The Bank has a pan India presence, with over 2600 branches across all geographical
segments. In view of the centrality of customer convenience, the Bank provides a wide
array of alternative delivery channels, including over 1600 ATMs, covering 590 centres,
over 1100 branches providing Internet and Mobile Banking (IMB) services and more than
1700 branches offering 'Anywhere Banking' services. Now more than 1500 branches of
the Bank offer advanced payment and settlement system under Real Time Gross
Settlement (RTGS) and National Electronic Funds Transfer (NEFT).

The growth story of Canara Bank in its first century was due, among others, to the
continued patronage of its valued customers, stakeholders, committed staff and uncanny
leadership ability demonstrated by its leaders at the helm of affairs. We strongly believe
that the next century is going to be equally rewarding and eventful not only in service of
the nation but also in helping the Bank emerge as a "Global Bank with Best Practices".
This justifiable belief is founded on strong fundamentals, customer centricity,
enlightened leadership and a family like work culture,

Vision

To emerge as a ‘Best Practices Bank’ by pursuing global benchmarks in profitability,

operational efficiency, asset quality, risk management and expanding the global reach.

Mission
To provide quality banking services with enhanced customer orientation, higher value
creation for stakeholders and to continue as a responsive corporate social citizen by
effectively blending commercial pursuits with social banking.

GOOD BANKING - OUR BANK'S CITIZEN CHARTER:

Ever since inception, This Bank has attached high priority to customer satisfaction. Over
the years, steps have been taken to come out with a number of innovative measures aimed
at achieving higher standards of customer satisfaction.

"Good Banking" - our Bank’s Citizen Charter is yet another endeavour in keeping with
the Banks traditional commitment to customer service. Ours is the first Bank in India to
distinctly articulate and adopt the code of Good Banking, which has been brought out in
the form of a booklet in the year 1993 and revised edition in 1994 and 2001. The revised
edition was made in consultation with the users and highlights our Bank’s commitment
towards customer satisfaction, thus ensuring accountability and responsibility amongst
officials and staff. This charter for customers not only explains our commitment and
responsibilities along with the redressal mechanism but also specifies the obligations on
the part of customers for healthy practices in customer banker relationships.

This is not a legal document creating rights and obligations. The charter has been
prepared to promote fair banking practices and to give information in respect of various
activities relating to customer service.

Booklets are available at all our Bank branches/offices. Details are available on the
Website of Indian Banks’ Association and NIC, Government of India also.
GRIEVANCE REDRESSAL POLICY

Introduction In the present scenario of competitive banking, excellence in customer

service is the most important tool for sustained business growth. Ever since inception our
Bank has attached high priority to customer satisfaction. Over the years, steps have been
taken to come out with a number of initiative aimed at achieving high standards of
customer satisfaction and complaint free branch network. Customer complaint is part of
the business life of any corporate entity. As a service organization, customer service and
customer satisfaction is the prime concern of the Bank. We believe that providing prompt
and efficient service is essential not only to attract new customers, but also to retain
existing ones. This policy document aims at minimizing instances of customer complaints
and grievances through proper service delivery and review mechanism and to ensure
prompt redressal of customer complaints and grievances. The review mechanism will
help in identifying shortcomings in product features and service delivery.

The Bank's policy on Grievance Redressal follows the under noted principles :

• Our customers will be treated fairly at all times

• Complaints raised by our customers will be dealt with courtesy and in time

• Our customers will be fully informed of avenues to esacalate their

complaints/grievances within the organization and their rights to alternative
remedy, if they are not fully satisfied with the response of the bank to their
complaints

• Our Bank will treat all complaints efficiently and fairly as they can damage the
Bank's reputation and business if handled otherwise.

• Our employees will work in good faith and without prejudice to the interests of
the customer.
In order to make Bank's redressal mechanism more meaningful and effective, a structured
system will function at Branches/Circle Offices/Head Office, which will ensure that
redressal sought is just and fair and is within the given frame-work of rules and
regulation.

This policy document will be made available at all branches. All the employees will be
made aware about the complaint handling process to ensure better customer service and
general awareness in the Bank.

Internal Machinery to handle customer complaints/grievances

a. If the customer wants to make a complaint, we will inform :

o Where to make complaint

o How a complaint should be made

o When to expect a reply

o Whom to approach for redressal

o What to do if customers are not happy about the outcome

b. The Bank will inform customers where to find details of procedures for handling
complaints fairly and quickly.

c. If the customer complaint is received in writing, we will endeavour to send an

acknowledgement/a response within a week. If customer complaint in relayed
over phone at our designated telephone helpdesk or customer service number we
shall provide a complaint reference number and keep customers informed of the
progress within a reasonable period of time.

d. After examining the matter, we will send our final response or explain why we
need more time to respond and shall endeavour to do so within 30 days of receipt
 of complaint and will tell customers to take their complaint further if they are still
not satisfied.

BANKING OMBUDSMAN SCHEME

a. We have displayed on our website and in all our Branches a notice explaining that
we are covered by the Banking Ombudsman Scheme, 2006 of the Reserve Bank
of India . The copy of the scheme is made available at all the branches and will be
issued to customers at a nominal charge.

b. Within 30 days of lodging a complaint with us, if customer does not get a
satisfactory response from us and if customer wishes to pursue other avenues for
redressal of grievances, customer may approach Banking Ombudsman appointed
by Reserve Bank of India under Banking Ombudsman Scheme, 2006. Salient
features of the Banking Ombudsman Scheme, 2006 are displayed in the branch
notice boards and the scheme itself is displayed on our Website
www.canarabank.com. If customers face any difficulty our Staff will explain the
procedure in this regard.
Sensitizing the operating staff on handling complaints

Our staff will be properly trained for handling complaints. During all the Training
Sessions at our Apex Staff Training College and Regional Staff Training Colleges
, the importance of handling complaints is explained to all the participants and
they are trained to deal with customer complaints. Nodal Officer for the Bank will
ensure that internal machinery for handling complaints/grievances operates
smoothly and efficiently at all levels and he will be giving feed back on training
needs of staff at various levels to the Human Resources Department.
Key Benefits of CRM for Banking

• 360-Degree Client View: All customer information including preferences,

transactions, holdings, and communications history are captured and managed
within a single interface.

• Manage Leads & Opportunities: Define key sales cycle and status criteria in
CRM, and use the system to automate sales cycle activities, such as call lists and
plans, marketing activities, and follow-up actions or tasks required.

• Automate Team- and Role-based Processes: Use extended functionality and

features to associate permissions and access to critical data to specific members of
your organizations, and automate sales processes within the system.

• Generate Executive Reports: Create custom reports, summarizing sales and

marketing activity based on the specific needs of your management team.

• Regulatory Compliance & Security: Use Auditing and Field Level Security
Enterprise Modules to ensure your organization can maximize the sophistication
by which it shares and manages client data, while complying with industry
regulations and privacy legislation.
 IMPLEMENTATION OF CRM IN CANARA BANK
BY RED HAT ENTERPRISE LINUX

Canara Bank's TBA modernization project marks the largest deployment of Red Hat
Enterprise Linux in the Indian BFSI segment till date. Red Hat Enterprise Linux will
power mission critical banking services on approximately 1,000 servers and 10,000
desktops in Canara Bank's branches across the country. In migrating its TBA application
from a legacy Novell Netware environment to Enterprise Linux, Canara Bank has
managed to improve system performance by more than 8 times.

Challenges:
• Automate more than 1000 branches
across the country.
• Modernize branch automation.
• Retain existing hardware.
• Seamlessly migrate a custom designed TBA
package to the latest platform.

Solution:
Platform: Red Hat Enterprise Linux;
Software: Integrated Branch Banking Software (IBBS)

Benefits:
• Improvement in system performance
by more than 8 times.
• Significant TCO reduction by eliminating the need for purchasing new hardware and
software licenses
CONCLUSION

Moving from the legacy NetWare platform to Red Hat Enterprise Linux has opened up
significant opportunities for Canara Bank. With networking support now available, Canara
Bank is planning to deploy Red Hat Network Satellite to send updates for both IBBS as well
as the operating system to all distributed machines across the country. Enterprise Linux has
also made Remote Management and health monitoring of remote servers possible. With the
tremendous benefits provided by Enterprise Linux, Canara Bank plans to move its Anywhere
Banking and Internet Banking listeners to the Enterprise Linux platform. Enterprise Linux
has provided Canara Bank with the freedom and choice to develop a scalable growth plan,
which was not possible under NetWare's closed legacy environment. The power of Linux is
not restricted by hardware limitations, as it can run on different kinds of architectures. Canara
Bank has managed to save crores of rupees in new hardware acquisition costs, by using a
lightweight customize Linux distribution on its existing hardware.As part of its vision of
using technology to provide affordable banking services to the vast rural population of India,
Canara Bank has extended the performance and cost benefits of Enterprise Linux to its
customers. With a modernized branch infrastructure, Canara Bank hopes to serve customers
in a timely and efficient manner, reinforcing its image of being a customer savvy bank.
 CHAPTER -5

BALANCE SCORE CARD

 CHAPTER -6

CONCLUSION

Results obtained by extensive usage of customer data to develop and apply Relational
Marketing have convinced the Garanti Bank to proceed along the line undertaken. As lists
of customers eligible for four very important banking product/services are available, as
above described, the following actions are now being deployed:
1. Extension of promotions to a larger customer population by having sales
People in the branches contacting progressively 15,000 customers
2. Targeted campaigns through Internet and the call center for customers
Actively using one or both of these innovative channels for their banking operations.

The same approach is now being extended to small and medium businesses and to
commercial customers. Moreover the analytical and strategic CRM cycle is being
completed by developing an application analyzing customers' attrition and deploying
strategies to reduce it.
 CHAPTER- 7

Bibliography:-
We have taken help from different sites:-

1. www.sbibank.com

2. www.icici.com

3. www.pnb.com

4. www.hdfc.com

5. www.standardchartered.co.in

6. www.canarabank.co.in
 SAMPLE QUESTIONAIRE

CUSTOMER CARE

1. How often do you measure customer satisfaction?

a) On a regular basis (monthly/quarterly)
b) Less than every six months
c) Never/Don’t know

2. Do you operate a customer loyalty program?

a) Yes
b) No

3. Which of the following is a component of your customer retention/loyalty strategy?

a) Contact former customers to obtain information as to why they left
b) Communication tracking within all departments
c) Personalized marketing and sales campaigns
d) All the above
e) Don’t have one/Don’t know

4. How do you currently track and review all the communications you have with your clients?
a) Contact Management software (Please specify: _____________________________)
b) Create notes in back-office solution
c) Track e-mail messages only
d) Keep a separate database

5. Do you currently have a way of segmenting your clients?

a) Yes
b) No

6. Your customers can access their account, order and service information via: (Select all that
apply)
a) Telephone inquiries
b) E-mail requests
c) Fax requests
d) Service they opted/pay for
e) Internet/Wireless devices
f) Personal visits
g) Don’t know

7. In what type of database is your customer information stored?

a) One main data warehouse
b) Separate databases for sales and marketing
c) Three or more “functional” databases
d) Don’t have one/Don’t know

8. How often do you measure phone statistics (i.e. average call length, redundant calls, abandon
rates,
hold times etc.)?
a) On a regular basis (daily/monthly)
b) Less than every three months
c) Never/Don’t know

9. Do you provide access to vital customer and back-office data in multiple languages and
currencies?
a) Yes
b) No
c) Not necessary

10. Approximately how many employees are in contact with customers on a daily basis in your
organization?
a) 5-10
b) 11-25
c) 26-50
d) 51-100
e) More than 100

11. Do you have more than five employees responding to incoming interactions (i.e. phone calls,
faxes, e-mails, personal visits, etc.)?
a) Yes
b) No
 MARKETING

1. When was the last time your organization ran a targeted, direct mail campaign?
a) Less than three months ago
b) Three months to a year ago
c) Never ran one/Don’t know

2. Do you create your marketing collateral in-house or do you outsource the content and design?
a) Yes, we create it in-house
b) No, we outsource it
c) Combination of the two

3. How many approvals, including graphics and layout, do collateral generally go through?
a) 1-3
b) 4-6
c) 7-10
d) More than 10

4. How are these approvals performed or processed?

a) E-mail
b) Hard copy
c) Maintained on file server
d) Other, please explain: __________________________________________________

5. If you do write and design your own marketing collateral, describe your current approval
process.
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
6. What do you use to generate campaign/customer lists?
a) Internal database
b) Third-party list
c) Third-party direct mail service
d) MS Excel, MS Access or other database
e) Not applicable

7. Through what channels do you market your products? (Select all that apply.)
a) E-mail
b) Direct mail
c) Phone
d) Fax
e) Web site
f) Other, please explain ____________________
g) All of the above
8. Which of the following do you base your marketing campaigns on? (Select all that apply.)
a) Demographic and market information
b) “Life events” interaction history
c) Customer variables (e.g., purchase history, pricing and frequency of contact)
d) Don’t run them/Don’t know

9. How do you determine which campaigns are successful and which ones aren’t?
a) By number of responses
b) Increase in sales volumes during peak mailings
c) Sales are tied directly back to original mailer
d) We don’t at this time

10. Do you maintain a record of completed campaigns detailing specific activities performed (i.e.
budget/cost analysis)?
a) Yes
b) No
c) We maintain campaign information on a spreadsheet
d) We only have an overall picture

11. Do you distribute leads to your sales team/channel by territory?

a) Yes
b) No

11a. If “Yes,” is this process automated?

a) Yes
b) No
 SALES FORCE AUTOMATION

1. Do you maintain an outside sales force?

a) Yes
b) No
1a. If “Yes,” how many sales staff do you maintain during peak sales times?

3. Can your sales staff access information while out of the office?
a) No, they have no access to data while out of the office
b) They have limited access to data via dial-up modem
c) Yes, they have full access to data via dial-up modem
d) Yes, they have full access via Citrix server
e) Yes, we have wireless capabilities

4. Who in your company enters the sales orders and quotes?

a) Sales staff
b) Order entry staff
c) Mixture of both
d) Other, please specify _____________________
e) Does not apply

5. Does your sales staff need access to inventory information, including pricing and quantities on
hand?
a) Yes
b) No
c) Does not apply

6. How do you currently generate your sales forecasts and pipeline information status reports?
a) Manually
b) Export data to independent spreadsheet/database
c) Separate database
d) Data-mining
e) Does not apply

7. Who in your company is responsible for creating reports (i.e. financial, marketing, sales,
customer support, etc.)?
a) Individuals
b) Management
c) Mixture of both
d) Does not apply

8. Can you track leads back to the originator regardless of the lead source (i.e. employee,
campaign, tradeshow, etc.)?
a) Yes
b) No
 ENTERPRISE WIDE QUESTIONS

1. Do you require every customer-facing employee to answer the phone in a similar fashion (i.e.
use of
phone scripts)?
a) Yes, we require this
b) We have a script but it is rarely used
c) No, we have no such requirement

2. Do you train your customer-facing employees in human interaction skills?

a) Yes
b) No

3. Does everyone in your company have access to the same customer information? (i.e. Can your
customer service and technical support view the same customer interactions to prevent redundant
calls and provide consistency throughout the organization?)
a) Yes, all our major departments have access to the same information
b) No, communication could be improved

4. How often do your middle managers in Marketing, Sales, Customer Service and Support meet
to discuss inter-departmental communications and customer trends?
a) Monthly
b) Annually
c) Never/Don’t have time

5. How do you currently determine who your most profitable customers are?
a) Manually
b) Export data to independent spreadsheet or database
c) Accounts receivable and purchase history reports
d) Data-mining software
e) We don’t know