Technology To Drive Multi-channel Strategies Of Banks

Technology has become inevitable for Indian banks in order to support their multi-channel strategies. While internet baking is rapidly gaining acceptance, Mobile Banking (M-Banking) will be the next wave of multi-channel strategy, discussed the panelists at the recently held International Bank Tech Summit, in Mumbai. The summit organised by Banknet group had interesting sessions on the role of IT in managing risks, frauds and multi channel strategies.

While chairing the session on multi-channel strategies, K R Murali Mohan, general manager, head-Alternate Channels and Cards, IDBI Ltd remarked that secure and scalable bank channels will require robust technology support. Increasing the reach of channels to much larger geographies and creating awareness for alternative channels of banking among the rural population are some of the major challenges confronting Indian banks, noticed Murali Mohan. Conversion of legacy systems in order to adapt with the upcoming alternative channels will also play a decisive role in the growth of multi-channel business.

Umesh Jain, CIO, Yes Bank observed that banks are still not effectively aggregating and analysing the data which they generate on a regular basis. He mentioned that banks still lack an intelligent system to identify the right customers for their products. Presenting the case of M-Banking, Haridas Nair, senior director, emerging technologies, IT Solutions Group, Sybase Inc informed that mobile banking helps banks to provide personalised, easy, fast and effective services. Mobile penetration is much higher when compared to the Internet and while deploying M-Banking solution, banks need to remember that unlike Internet it will involve delivery clients, mobile network and carriers i.e. telecom providers. Nair recommended that all three channels of M-Banking i.e. Rich Clients, SMS and WAP, should use a consolidated back end.

Santosh Khanolkar, platform strategy advisor-BFSI, Microsoft Corp (India) presented a business approach based on Web2.0 initiative. He mentioned that it will enable banks to make their websites more interactive and participative, while these banks also need to be extremely cautious in securing the data transaction. According to government data, Indians were confronted with 215 more cases of phishing in 2006, an increase of 180% compared to 2005. Account takeover, application frauds, online CNP (card note present), phishing, pharming are some of the major threats, which banks are currently facing. Francis Castello, business manager - Authentication Services, Asia-Pacific, Verisign suggested that a layered security approach would help combat such issues.

The session on the role of IT in managing risk and frauds, discussed issues like Enterprise wide risk management system (ERM) and Anti money laundering solutions. K G Bhandari, senior vice president and head - Risk Management, IndusInd Bank described that in order to effectively manage frauds and risks, banks needs to have a multidimensional and pan organisational approach. The ERM provides a single view of the risks banks are exposed to and helps in monitoring various kinds of risks like credit risk, market risk and operational risk. He also mentioned that banks need to understand that not only are regulatory compliances cost centres, but they also ensure secure processes and infrastructure in general.

Ramnarayan Rajaraman, golbal head, Clients Services, InfrasoftTech cautioned that an AML solution should be based on logical data model which seamlessly adapts to core systems and analyses data through multiple dimensions. However, why would a bank need an AML solution, while core banking solution is able to provide all the transactional data. Rajaraman providing the reason explained that core banking does not have context sensitivity; it’s not adaptive to changing transaction patterns and is static in nature.