[sbinews] Technology Management

  • From: sbistcbangalore@xxxxxxxx
  • To: sbinews@xxxxxxxxxxxxx
  • Date: Sat, 13 Dec 2003 07:57:51 +0500

Technology is key, but efficacy depends on use 

TIMES NEWS NETWORK[ THURSDAY, DECEMBER 11, 2003 11:58:09 PM ] 
MUMBAI: Technology could well turn out to be a cost monster for banks if the 
players do not use it to make a difference. But at the same time bankers feel 
that technology needs to evolve radically to be a key differentiator in the 
coming years. 

Participating in a session on “Technology: Lifeline or Cost Monster?” at the 
Bank Economists’ Conference on Thursday, Deutsche Bank’s CEO Gunit Chadha said 
that banks were relying on technology to build business and have an edge over 
competitiors. 

“My best way of approaching technology is that by say ‘10 or ‘15, technology 
would not be a differentiator. It is a differentiator now. However, what you do 
with the technology now, will make the difference in the future,” said Mr 
Chadha. He felt that banks not thinking on these lines may well see technology 
becoming a “cost monster” in the years to come. 

Making an indirect reference to the growing commoditisation of technology, Raj 
Dosaj, senior director of Sun Microsystems said that banks were readily 
embracing tech solutions, but paying little heed to whether the same technology 
could be seamless across users. “We have completely customised technology to 
such an extent that the bank is an end user, the technology belongs to it. 
Customers are not asking this industry (tech companies) to change,” said Mr 
Dosaj. 

Recounting his IDBI Bank days, Mr Chadha said termed his relationship with his 
bank’s chief technology officer as “distrustful.” He said that each time there 
was a proposal from the technology officer, he would refuse it. “He would talk 
about things such as higher server capacity,” said Mr Chadha. The CTO ended 
more time convincing him about his ideas. Mr Chadha said that the bank was able 
to build a sound technology platform, which served its purpose of building 
business for the bank. The key issue was that in the coming years, everybody 
would have the technology, so what would differentiate you. 
 
 
On outsourcing, Mr Chadha felt that Indian banks should follow their foreign 
counterparts in setting up BPOs. “Citigroup has e-Serve, StanChart has Scope 
and HSBC and Deutsche also have their BPOs. Indian banks should consider this,” 
he said. 

Mr Chadha pointed out that the upsides in terms of cost savings from 
outsourcing were limited and banks needed to continuously evaluate the 
effectivness of outsourcing. 

SBI’s deputy managing director Ashok Kini said that his bank was in the process 
of conceptualising on what business areas the bank’s proposed IT company should 
focus on. “The plan would be finalised by March ‘04,” he said. 


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