It was a party with a difference. The evening of February 7 saw the sprawling grounds of Brabourne Stadium teeming with the who?s who of the financial world and the leading lights of Indian industry. Shekhar Kapur and (I am told) Juhi Chawla added glamour. Even the FM tweaked his schedule to attend. The occasion: ?Technology in Concert?, SBI?s celebration of its successful rollout of Core Banking Solution (CBS), creating the world?s largest core banking network.
Not so long ago, it was virtually impossible to be able to access one?s bank account from anywhere other than the branch to which the account belonged.
Today, someone with an account in Arunachal Pradesh can easily transact upon it in Andhra Pradesh. A car loan payment can be automatically processed from a savings account and funds can be transferred across the country and remitted from abroad instantaneously. ATMs work ?anytime, anywhere?.
All this comes from adopting Centralised Online Realtime Environment Banking or core banking. At its heart, it means connecting all the branches of a bank in a hub-and-spoke model with an IT centre so that bank records become accessible anywhere throughout the entire bank, regardless of the origin of the account. Now a customer belongs to the bank, not to a specific branch. Distance disappears. Costs fall sharply. New products become possible. Relieved of back office work, branches can focus on marketing and customer service. A bank?s basic business model now requires a complete revamp. Technology changes everything.
Most new private banks started off with core banking. But for public sector behemoths like SBI, switching to core banking involved every change management challenge in the book and more. Processes had to be aligned with the new technology to derive optimum advantage. Employees had to be trained and their mindset had to be oriented towards the paradigm shift that core banking brings in its wake.
There was, of course, no way around it if SBI wanted to stay competitive. The exercise started in 2003 with TCS as the lead technology partner for domestic branches and Infosys for foreign branches. Many others like Cisco, Microsoft and Datacraft were involved in a critical partnership of mind-boggling scale.
The journey was far from smooth. By mid-2006, the rollout was bogged down with problems. The day-to-day experience for both customers and employees became a trying one. Coordination between branch servers, IT centres, local hardware, software and connectivity was far from seamless. The CBS platform adopted for SBI was far from bug-free or perfectly customised. It added to employee woes as new problems were discovered each day?ranging from out-of-size passbook printers to branch server downtime?and vendors had to come up with ad-hoc patches to get around them. As many as 234 promotions and patches were developed between April and June 2006 itself. The service desk for the CBS rollout was flooded with over 1,51,000 calls that year.
The new chairman, OP Bhatt, took the gutsy and unusual step of suspending the rollout between September and December 2006 to address the problems. When the rollout resumed, it progressed at a much faster clip?over three times faster. By July 2008, all of over 11,000 SBI branches were on CBS, ahead of schedule.
The rollout journey that had started from SBI?s Hiranandani branch at Powai was an adventure in itself. At the Leh branch, for instance, the VSAT equipment had to be airlifted from Chandigarh by the air force. At the Minicoy Island branch, equipment had to be taken in an open boat and arrived soaking wet. In the Northeast, engineers had to walk for three days to reach some branches. The SBI team literally braved dacoits, Naxalites, cobras and panthers to connect the bank and its customers on time.
Today, core banking covers nearly 18,000 branches and offices and over 20,000 ATMs belonging to the State Bank family. It covers over 280 million accounts and handles over 46 million transactions each day.
Sunday evening was suitably spectacular. A video made for the occasion told the SBI connectivity story. A glittering panel moderated by Bhatt featured Mukesh Ambani, Sunil Mittal, S Ramadorai, TV Mohandas Pai, Jeffrey Sachs and Wim Elfrink, Cisco?s chief globalisation officer. It hailed India?s emergence as a world economic power and the role of technology in financial inclusion and poverty elimination, something the FM underlined in his speech as well. Steve Ballmer, John Chambers and Jeff Immelt conveyed their congratulations by video link. Fusion music, a laser show, superb choreography between man and machine, all made for a great show?an absolute dream for techies everywhere. All this on a display screen the length of a football field. Yes, size matters.
The author teaches finance at the Indian School of Business, Hyderabad