Treasury

International

PANEL DEBATE: BANKING TECHNOLOGY:

CHALLENGES AND OPPORTUNITIES

V ChandrasekharChief Technology Officer

Bank of Baroda

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Panel Questions1. What are the key technology challenges facing

Indian banks today/over the next five years?2. Which one technology will make a critical difference

to your business over the next one – five years?3. What new technologies will drive innovation in the

sector in the future?4. What impact will regulation reforms, such as Basel

II, IAS, Cyber crime, AML have on banking information technology?

5. What are likely spending trends in banking IT over the next five years?

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Presentations

• ”Service Orientated Architectures In Banking” - Mr. Koen Van den Brande, President, Product group - Polaris Software Lab

• “Linux in Banking And Financial Services” - Mr. Sachin Dabir, Head, Enterprise Sales, Red Hat India Pvt Ltd

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Key Technology Challenges for Next Five Years

• Alignment of IT and Business• Mindset Issues – From being organisation centric to customer

centric / risk culture , importing of best practices• How to Drive Down Costs in a Public Sector Environment • Cost of change is much more than cost of technology• Managing Size, Scale and Complexity of IT Systems – find

needed skills / specialisation and retain them• Data as an Asset – Silo Data / Poor Quality / Incomplete / Data

Migration / Reference Data Issues• Integration of legacy and state of the art systems• Re-Position the Bank - Branding, Premises, Marketing • M&A

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One Key Technology that will make the difference in your bank

• From Decentralization to Centralisation• CBS

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New Technologies that will drive innovation in next Five Years

• Multi-media Communications– Will make relationships less plastic

• Robust Authentication Technologies– Single Sign on– Uniform look & feel

• Electronic Payments– Micro-payments– Internet– Mobile– Smart Cards– Smart Phones

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Impact of Basel II, IAS, Cyber crime, AML on Technology

• DWH• Information Life Cycle Management• (Network) Storage• Strong Analytics• Emergence of Robust Financial Services Model• Trusted Computing• Security Management Tools• STP – Internal / External• Financial Reporting

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Likely IT Spends in Next Five Years

• The BFSI sector accounts for the largest share of the domestic IT market

• IT spending by the BFSI sector increased by 18 percent to Rs. 60 billion (US$ 1.24 billion) in 2002-03.

• PSBs Currently at 2%• Will have to reach 15 to 20%• IT spends on security will increase• IT spends on compliance will increase• Emergence of Network Computing, On demand Computing and

Multi-Core CPU technologies will radically alter IT architecture / implementations / software / hardware costs and licenses and hence TCO and IT spends

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Gap

• 1970 –80 – ALPM• 1990s – TBM• 2000s – CBS• We need to close 30 year gap

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Technology • Technology is cost to every one and

distinction to none• Brings in level playing field• It is people ( service, innovation and

competency) that brings in differentiation not cost , market segmentation or product

• Technology can be a competence creator or destroyer

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Infrastructure

• Infrastructure and application are inseparable

• New applications require new infrastructure

• Every new innovation comes with new investments and new issues of change

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Great Technology Quotes• IBM – There is market for only for 5

computers – Watson 1943• Dec – There is no reason to have computers

at home – Ken Olsen 1977• MS – 640K memory ought to be enough – Bill

Gates 1981• British Post – Americans need telephones.

We don’t. We have enough messenger boys.

Treasury

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Thank You