The adoption of technology by banks has provided them with enormous operational leverage provided the lenders are on the right side of the technological disruption, Sanjiv Chadha, managing director and CEO of Bank of Baroda (BoB), said. Chadha said that in last three years, the bank has grown its business by around 35-40%, but investments in the workforce and opening of new branches have come down.
“The usual link which was there in growing the business and footprint has broken for all time to come. There is enormous operating leverage that can be created if you get your act together,” he said while speaking at the 18th annual banking technology conference, expo and awards 2022, hosted by the Indian Banks’ Association.
Despite the improvement in operational efficiencies afforded by technology, the banking sector may face a technological divide due to the disruptive pace of change and to be on the right side of the disruption, banks need to be agile, look at stability and functionality, he said.
In order to improve its pace of implementation of technology initiatives, State Bank of India (SBI) has started to shift its focus from recruiting general cadre to IT cadre, Dinesh Khara, chairman of the bank, said at the event. The bank is also looking to partner with technology innovation hubs to minimise the time taken by the bank to bring a product in the market, he said.
“At entry level, 85% of the new employees who are joining us have the basic talent. We give them basic inputs as to what the bank is and giving the initial exposure. However, we are hiring people at senior and mid level also,” he said.
Highlighting the importance of technology in banking, P D Singh, CEO of JP Morgan Chase Bank, said that the lender spent $12 billion last year on technology, which is larger than the size of many IT companies.