technology components. This paper explores the need for technology changes that must be made to enable banks in India to modernise. Further this paper explores how banks need to update their software and infrastructure in order to facilitate business and operational transformation.
The IT Vision of Reserve Bank India
The Reserve Bank of India has issued an Information Technology Vision Document 2011-2017 which outlines a road map towards the transformation of Indian banking sector which is knowledge driven with an integrated and more inclusive approach. Factors resulting in the accomplishment of the objective of a knowledge based organisation include the need for data to conform to internationally accepted standards and usage of business intelligence from data warehouse. This will form the basis for development of optimal Management Information Systems (MIS) with effective Decision Support Systems (DSS).
In addition, the document sets the priorities for commercial banks for moving forward from the core banking solutions to enhanced use of IT in areas like MIS, regulatory reporting, overall risk management, financial inclusion and customer relationship management. It also conquers the possible operational risks arising out of adopting technology in the banking sector which could affect financial stability and emphasizes the need for internal controls, risk mitigation systems.
Further, RBI has identified various factors which would result in improved IT Governance, with specific strategies centred on effective project management, evolution of well-defined information policies as well as information security frameworks, contrasted with better vendor management and outsourcing practices. Incentive would be provided to reviewing of IT processes aimed at holistic processing leading to better alignment between business objectives and IT.
The Technology Implications
The main challenges facing banks today is that banks have to modernize their business strategies and operating models. We will now explore the technology implications of that modernization imperative, in particular how banks must review their software and IT architecture, and update it where necessary, so that it can be an enabler of the modernization program.
There are five areas of banking operations where it is essential for banks to review their technology assets to ensure they are up to date and fit for purpose:
• Attracting and engaging customers,
• Managing risk
• Transforming business operations
• Optimizing operational efficiency
• Simplifying IT infrastructure