CTOs Harbingers of Hi-Tech Banking

hitech_bankingThe role of CTOs in the banking ecosystem has never been as critical and powerful as it has evolved into in the present times. The scope of their responsibilities has widened and they are now looked upon as the business facilitators rather than being just the tech experts to their organisations, writes Sandeep Datta of Elets News Network (ENN)

In the times of smartphone-weilding consumers constantly looking for convenient banking services and the threat perception from cybercrime groups and even state actors, the role of Chief Technology Officers (CTOs) is turning out to be more critical than ever

EVER-EVOLVING BANKING SYSTEM
Over the past 10-15 years, there has been a noticeable shift from traditional to channels-based banking. While introduction of ATMs gave customers anytime access to their money, the cards-based banking unleashed a revolution by enabling cashless transactions.
Affordable technology infrastructure, like inexpensive but powerful computers and other handheld gadgets and higher Internet bandwidth at a low cost, have facilitated easy access to banking products and seamless banking transactions. Call centres and phone banking services have furthered the customer convenience.
By directing banking transactions through different electronic channels and offering customers direct access to their accounts, banks can now offer quick service and transparency as well.
Introduction of mobile banking, primarily through SMS, was another milestone. Launch of smartphones brought about a revolution of sorts in the banking world. As the number of mobile phone users in India grows rapidly, banks are exploring the feasibility of using the ubiquitous device as an alternative channel for delivery of full-fledged banking services.

ROLE OF CTOs
In such scenario, the role of CTOs or Chief Information Officers (CIOs) acquires an altogether new dimension– apart from being the technology experts, they are also the present-day business facilitators for their organisations. A section of banking industry experts, meanwhile, feels that today’s disruptive landscape holds a big opportunity even for small institutions with the right technology to compete and swiftly achieve a scale on par with the Goliaths of the sector. Hence, a large institution’s CTO carries even a bigger challenge to enable the firm protect its market share and grow as well.
“In addition to ensuring the best technology for the firm, if the CTO is able to leverage recent developments and create technical options for both — existing businesses as well as for new businesses, it will help fulfil a critical mandate of that role,” says K G Subramaniam, DirectorTechnology, Barclay’s Bank.
“In particular, the CTO would need to partner with the business development in incubating new businesses for the firm that exploits technology breakthroughs, giving an invaluable head-start and thus mitigating the risk of being left behind,” he adds.
As the banking industry is in the midst of an IT revolution, banks are now becoming a one-stop supermarket. The focus is shifting from Mass Banking to Class Banking with the introduction of value-added and customised products.
According to Samuel Joseph, CTO & CGM, ExportImport Bank of India, technology allows banks to create what looks like a branch in a business building’s lobby without having to hire manpower for manual operations.
“The branches are running on the concept of 24X7 working hours, made possible through the use of tele-banking, ATMs, internet banking, mobile banking and e-banking. These technology-driven delivery channels are being used to reach out to maximum number of customers at a lower cost and in most efficient manner.”
With technology becoming backbone of almost every business from IT to services, the role of CIOs/CTOs has drastically changes, redefining their engagement in companies’ affairs from functional to strategic business.

The role of Chief Technology Officers or Chief Information Officers acquires an altogether new dimension – apart from being the technology experts, they are also the present-day business facilitators for their organisations

CHANGING BUSINESS NEEDS
In recent times, it has been observed that technology is at the cusp of witnessing one of the biggest disruptions of present times like mainframe, client server, internet and cloud. These disruptions are fast changing the business landscape.
To be aligned to the new scheme of things, CTOs/ CIOs are expected to understand the business quite well to drive revenues. For a bank’s CIO, it is critical to run the application in a fashion that it ensures more revenue generation.
In their new avatar, the CTOs/ CIOs have to define technologies that are relevant to meet future demand, strategise to deploy these technologies for optimum benefits and look for competitive differentiation.
As the tech industry is also viewed as being all about how one could do more with less, this is what the CIOs/ CTOs are expected to play in their newly defined role.
From a financial institution perpective, Anup Purohit, Chief Information Officer, Yes Bank, feels that the role of a CIO is quite diverse these days. “They have to get the best of the technologies and, at the same time, understand the business very well, and then marry them together in a manner that finally adds value for both businesses as well as customers.
“It is indeed a demanding and challenging role. We – as CTOs or CIOs – always sit in a hot chair and have to be always alert 24×7 and ensure that we – if not ahead of the trends – at least don’t lag behind in our business,” Purohit observes.
Defining the role of CTOs, Rakesh Kumar, General Manager – IT, Punjab National Bank, says that “we act as a catalyst for business development of the financial institution by aligning technology in line with the business goals in multiple ways”.
“He (CTO) brings in operational efficiency through automation of various manual processes and thereby improving customer convenience and satisfaction, which leads to business development.”

  EVOLUTION OF INDIAN BANKING SECTOR

  • The nationalisation of major private sector banks in 1969 made banking accessible even to the unbanked population of the country, though the banks had emerged in India as an institution in the late 18th century primarily to cater to the needs of the ruling Britishers.
  • The economic liberalisation in the early 1990s ushered in the era of privatisation. During this time, many new private banks—the modern-day tech-savvy banks—were born. Also, a few foreign banks commenced their India operations
  • All these banks were quick to leverage emerging technologies, to woo customers and win them over with their tech-aided faster services. It helped infuse a sense of urgency in the public sector banks as well as the older private sector banks to jump onto the technology bandwagon. It completely reinvigorated banking operations in India.
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