Use of technology in banking, its obstacles explained by top Indian bank CEOs

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Sanjeev Chadha, MD & CEO, Bank of Baroda, says that the usual link between business growth and physical footprint has been broken in the coming times. “The mobile channel is largely a bank for sourcing, distribution and servicing,” says Chadha.

Chadha gave the example that the public sector bank has increased its business by 35-40 per cent in the last three years, but the number of branches has decreased by 15 per cent and the staff has not increased at all. “This means that enormous operational leverage can be created through technology if you get your act together,” he added.

V Vaidyanathan, CEO, IDFC First Bank, says it is easy to grow credit, but the role of technology is to enable a seamless experience, reach out to the under-served and help build a quality portfolio.

“What we look at on the face is customer convenience, but there are other elements like risk and payback period,” says Dinesh Khara, chairman, SBI. Khara was among the panellists at the IBA Symposium on Banking Technology here today.

AK Goel, MD & CEO, Punjab National Bank spoke on the issue of technology making it ‘affordable’ for the masses. IDFC First’s Vaidyanathan pointed out that one of the biggest paradoxes of banking is that the poorer you are, the higher the interest rate you pay. “The big role that technology can and should play is by reducing the cost of operations at the bottom of the pyramid,” says Vaidyanathan.

PD Singh, CEO of JPMorgan Chase Bank, says the foreign bank spent more than US$12 billion last year, which is more than many tech companies its size. “That’s how important it (technology) has become,” says Singh.

The largest bank in terms of IT skills and talent has created a new cadre within the bank.

“We are also hiring IT talent from the market,” says Khara. In fact, SBI made a senior lateral recruit in Nitin Chugh, deputy MD and head of digital banking. Chugh previously served as the CEO of Ujjivan Small Finance Bank and as the digital head of private sector HDFC Bank.

Chadha says the technology partner can help you drive change in the organization, but embedding change doesn’t come easily. “This is where bringing in lateral talent and allowing it to grow is fundamental to that change,” believes Chadha.

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