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Development Credit Bank is seeking to integrate a range of applications into its core banking framework and is simultaneously experimenting with Wi-Fi and mobile technologies.
 Mumbai-based Development Credit Bank (DCB) believes that its business strategy will be led by the retail segment. Recently, DCB selected Nucleus Software’s FinnOne solution for its retail banking operations. This solution will be implemented across all of DCB’s 72 branches in the country.
"It is an end-to-end solution that will take care of the entire workflow. We plan to go live within a period of 80 days,” says Parag Patankar, EVP and Chief Operations & Technology Officer at the bank.
The adoption of FinnOne indicates DCB’s move toward ramping up its loan origination, loan management and collections operations within the retail-banking sector. With this implementation, the bank plans to streamline its retail assets division by ensuring anytime, anywhere access and ease in operations for its sales, credit and operations teams. Currently, the bank has around 6,00,000 retail customers.
Improving the business
Consumer banking has been the core focus of the bank since its inception 75 years back. As of 31 March 2006, DCB’s deposit base was Rs 3,124 crore and advances were over Rs 1,867 crore.
The bank has been using Finacle’s CBS since 2004. This runs on a three-tier IBM AIX architecture. The entire roll-out process took 89 days. Recently, it went for a successful upgrade to the latest version of Finacle (7.0.11) in a period of four months; the upgrade was executed by a 20-member team from DCB and Infosys.
Using Finacle has assured the bank of continuous support from the vendor and also helped in enhancing some of its business functions. The migration to 7.0.11 has helped the bank to improve features like cheque processing, loan management processing, automation of returns, and more.
“The migration has given us an advantage in terms of our business functionality. Going forward, we would look at solutions that support Finacle,” says Patankar.
In October last year, all the branches were initiated in using Voice over Internet Protocol (VoIP) communications on a voice and data network. This helped the bank to reduce costs. “The payback period for VoIP should be realized within one year. We intend to use VoIP for our customers who want to reach our helpdesk,” informs Patankar.
Expanding by the rules
Regulatory changes in the banking industry is another factor that is driving the IT initiatives. The bank already has an anti-money-laundering system in place where all daily transactions are recorded. It has also purchased a credit assessment module from Crisil.
"The Crisil module will allow us to create our own rating model for corporate governance," states Patankar. Parallel testing of the FinnOne and Crisil solutions will begin from Q1 2007-08. This would continue for at least
3-6 months to ensure that data across business processes is synchronized.
The bank currently has 101 ATMs deployed across the country. Out of these, 59 are onsite (deployed within branch premises) while the remaining are offsite.
All the ATMs are connected to a centrally-controlled switch. The bank has also entered into an alliance with Cashnet and National Financial Switch (NFS), and has a bilateral tie-up with HDFC for ATM transactions. NFS is an interbank network in the country managed by Euronet India. The ATM link between DCB and HDFC is established via a leased line. With the help of these alliances, DCB has been able to provide its customers access to 11,000 ATMs across the country.
The central switch acts as a message-based interface. All ATM transactions finally reach this switch which is integrated with the CBS.
Connectivity
The network at DCB is primarily terrestrial and all the branches are connected via terrestrial links. A majority of the bank ATMs also ride on terrestrial links.
The connectivity links follow a hub-and-spoke model. The bank also tries to achieve redundancy by using ISDN lines from different service providers so that a failure on a leased line can be taken care of.
"The network and bandwidth are sufficient to meet the applications we now have. As applications increase, we might invest in additional bandwidth or look at data compression solutions at the router-end without increasing the bandwidth," says Patankar.
The primary data center is located at TISL’s (Tata Internet Services Limited) premises at Andheri in Mumbai; hosting around 100 servers. The disaster recovery (DR) site is with NSE-IT, Chennai.
The bank has a business continuity plan in place with a tier-2 DR solution that supports all critical applications. A tier-2 site already has the necessary hardware installed; it can be made available to support the vital applications of the primary site.
“As of now, we are offering support for all our critical applications through our DR site. We have a mechanism in place to ensure that we are able to operate out of different premises in the event of a disaster,” explains Patankar.
Today, the bank replicates to its DR site some applications which it has defined as critical. Some of them are replicated on a day-end basis while others are replicated only during year-end. In the next 12-15 months it plans to replicate all the applications from the primary site. The DR site is capable of supporting 50-60 percent of the total number of transactions that occur in a live scenario.
On the data center front, the connectivity speed varies from 2 x 4 Mbps to 2 x 8 Mbps. The speed from the data center to the hub level is between 2 x 2 to 4 x 4 Mbps.
Road ahead
As the bank tries to explore new opportunities, it wants to ensure that its IT systems are strengthened. DCB plans to standardize the OS and server environment, and will certainly evaluate Windows Vista along with XP as a choice for OS.
It is also carrying out experiments with Wi-Fi technology and wants to be sure there is no security risk involved in using it in a branch environment. “There are solutions which provide you access within a certain radius, but what if someone outside the branch premises can access the network?” asks Patankar.
DCB is also exploring the use of handheld devices within the branch because they would provide faster access to some of the non-managerial transactions.
There has been a lot of talk about White Label services and how the banking sector can benefit from them. In such a scenario, a third-party would set up the ATM infrastructure and network support for the banks.
Today, the total cost for setting up a single ATM costs anywhere between rupees eight to ten lakhs. The ATM machine accounts for 50 percent of the total cost. The rest is spent on supporting infrastructures like VSAT connectivity, uninterruptible power supply, wiring, air conditioning, real estate etc.
The banks would benefit as there would be less spending on the infrastructure even while they would get more visibility. However, the Reserve Bank of India has still not approved their use.
“We will progress on this technology only when we have clarity on it from the regulators,” says Patankar.
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