Creativity and Innovation in Indian Banks Essay Example

implementing IT initiatives such as adopting core banking solutions (CBS), automating branches, and centralizing operations within the CBS.

In the past decade, banks have transformed into technology-driven organizations. They have moved from a manual, limited-scale environment to a global presence with automated systems and processes. It is hard to imagine the difficulties faced by the sector before the reforms, when even a simple deposit or withdrawal of cash would take a whole day. The introduction of ATMs, mobile banking, and online bill payments has almost eliminated the need for customers to physically visit a branch.

Branches are evolving from transaction processing points to relationship management hubs, resulting in increased productivity and operational efficiency for banks. This transformation has also led to improved risk management through centralized information and real-time access to critical data for decision making. As technology becomes more prevalent in banks, there is a shift towards computerizing regional rural banks (RRBs).

Indian banks are using decision-making and business intelligence software to improve their IT infrastructure. This has helped them become a major player in the global market by recognizing the importance of adopting new technologies for expanding their business. The banking system in India has transitioned from being mainly focused on domestic operations to becoming a prominent global entity in the financial services industry.

The progress made can be credited to several factors. These include the implementation of economic reforms that have strengthened the banking sector, the utilization of new technology by banks to streamline their operations, and endeavors to enhance cost efficiency and offer convenient doorstep banking services to customers, resulting in higher profits. In the past, financial

products like mutual funds, insurance, and equity trading were unavailable in Indian villages. However, these services are now accessible through proxy banking using Internet kiosks and ATMs.

'Channel Migration' refers to non-branch banking, which enables customers to access a range of services in the modern banking system. This is facilitated by a central server that stores banking transactions and connects with all branches of a bank. However, India's technological systems lag behind those of the UK, USA, and Singapore, although they are more advanced than Russia and China.

With extensive connectivity, the banking industry has enabled real-time access to services from any location. Almost all scheduled commercial banks now offer various options such as internet banking, mobile banking, ATMs (automated teller machines), and phone banking, ensuring availability around the clock.

ATMs have revolutionized the banking industry, enabling customers to access cash and other services at any time. To ensure widespread accessibility, transactions are updated across all branches of a bank account. To shape the future of Indian banking, it is crucial to increase investment in technology platforms and prioritize comprehensive solutions offered by IT companies. These solutions include core banking products, vertical-specific CRM, and risk management software. The main focus should be on end-to-end solutions.

Indian banks are innovating various aspects of banking in the country, including service banking, ATMs, net banking, mobile banking, ECS/RTGS/NEFT, debit cards/credit cards, and CRM (customer service). South Indian Bank is an example of a bank that is taking steps to provide innovative services. For instance, they offer hassle-free and fee-free salary disbursal for corporates, firms, and individuals who have accounts with any of their 511

CBS branches. This service is particularly beneficial for employers as it allows them to disburse salaries to employees even if they work in areas where the bank does not have a physical presence.

The convenience banking product was launched by Dr. V. A. Joseph, Chairman ; CEO of the Bank, and Mr. M. P. Gopalakrishnan, President of CMS Trust. In his opening speech, Dr. Joseph stated that the product aims to benefit employers and employees alike and utilizes the bank's advanced technology platform which links all 511 branches and 26 extension counters through a Core Banking Solutions network, providing customers with anytime banking services. The GSSA accounts can be opened with no minimum balance required.

The Chairman and CEO of the Bank expressed that South Indian Bank is focused on providing personalized customer service utilizing the latest technology. The Bank received recognition for its technological capabilities by receiving the banking technology excellence award from IDRBT, a technical arm of RBI. Additionally, the Bank was acknowledged for its service quality by being selected as the best private sector Bank in India in the service quality segment in the Outlook Money - C Fore survey.

Dr. Joseph also mentioned the recent facility introduced by South Indian Bank for online booking of offerings through their payment gateway. This service is available to customers who are devotees of Guruvayur Sreekrishna Temple and is the first of its kind. NRIs also utilize this service to make hassle-free offerings for themselves or their elderly parents in India, ensuring transparency and security.

South Indian Bank successfully completed the SIBertech project on 26.03.07 in partnership with Infosys Technologies. They implemented a centralized Core Banking Solution,

which started in 2001, with the goal of providing personalized customer service.In his inaugural address, the Chairman confirmed his belief that the newly launched product would validate this belief.

This innovative convenience banking product offers several value additions that make banking for employers and their employees easy and comfortable. These value additions include a free International ATM-cum-Debit Card with no annual maintenance charges, online booking of offerings for Lord Sri Guruvayurappan without bank charges, free cash withdrawals from other bank ATMs (charges borne by SIB), free utility payment and e-commerce services, no stipulation on minimum balance, earning the usual SB interest along with many freebies, hassle-free operation of SB account during travel/temporary transfer/transfer, closure or transfer of account to another branch without any charge, free cheque leaves (subject to limits), and free fund transfer through RTGS/NEFT/Fast Money/DD. Customers of this feature-rich Savings Bank account can also open a Depository account and enjoy mobile banking facility provided by Indian bank.

The 'Golden Peacock Innovative Products/Service Award' for 2011 was presented to Mr T. M. Bhasin, Chairman and Managing Director of Indian Bank, at the World Congress on Total Quality in Bengaluru. The bank's efforts in empowering women through the promotion of self-help groups (SHGs) were recognized. According to a press release from the bank, this year alone, Rs 1,360 crore has been disbursed to 55,391 SHGs, resulting in a total exposure of Rs 2,336 crore and benefiting 175,390 SHGs.

The SMS Unhappy service offered by State Bank of India, the largest public sector bank in India, allows customers to lodge complaints by sending the message "Unhappy" to 8008202020. This innovative service was conceptualized

by Mr. Siva Kumar, Dy. Managing Director of SBI. The Happy Room team follows up with customers who use this service, gathering information about their complaints and forwarding them accordingly. Since its introduction, SBI has received a significant number of messages through this successful initiative.

Other banks have also begun to copy this service. SBI has launched a unique branch designed specifically for High Networth Individuals (HNI), where the minimum requirement to open an account is Rs 1 crore, and that too by invitation only. This branch provides exclusive banking services such as dedicated relationship managers, round-the-clock lockers, extended banking hours, doorstep pick-up and drop-off services, as well as offering customers luxury five-star amenities. So far, we have already opened 50 accounts.

According to Mr. Shiva Kumar, Chief General Manager of SBI, the bank is confident in opening another 150 branches by the end of the current fiscal year. These branches will include attractive features such as 24-hour open lockers and special dressing rooms for late night function goers. The SBI references mentioned include "Service Innovation in Banks for Sustainability" by Y. Ramakrishna, "Indian banking System: Epitome of continuous innovation" from 2008, "Process innovation in the Indian banking industry" from 2009, "Innovations in rural financial products and services" by Keertiman Sharma, "Outsourcing in the Indian banking sector: gaining momentum" from 2008, "Innovation in retail banking" by India PRWIRE, and "Solar power to enable banking and ATM facilities for rural India" by Vortex engineering. Additionally, there is a reference to a customer-oriented empirical evidence from State Bank of India by J U Ahmed in January 2011.

Y. Ramakrishna, in his article titled "Service Innovation in

Banks for Sustainability," published in the International Journal of Management and Business Studies (IJMBS) in April - June 2012, discusses the importance of service innovation in the banking sector for achieving long-term sustainability.