State Bank of India (SBI) is aggressively trying to
become tech-savvy in order to ward off competition and
to ensure customer retention.
largest commercial bank in the country has recognised
technology as a tool to make it more customer-focussed,
to ensure customer retention and to enhance customer acquisition,
especially in the retail space.
has appointed McKinsey to help streamline the business
model to ensure it is competitively aligned to meet the
current business objectives. SBI is beginning to bridge
the gap between itself and the private and foreign banks
on the customer orientation front.
a report by leading broking firm Merrill Lynch: "Absence
of a fully-integrated technology platform is a key hurdle
for SBI today in achieving complete efficiencies that
many of the private banks have. Now SBI has recognised
that technology is a key enabler to have a competitive
edge over private players."
were apprehensions in the past about SBI's ability to
implement its technology plan successfully. "But,
we believe those are overplayed. SBI's technology rollout
is now fully under way. SBI, in our view, is ahead of
any other government bank in implementing its technology
platform," says the Merrill Lynch report.
has already set up 1,700 ATMs, majority of which are networked.
These include almost 600 ATMs of its seven associate banks.
will also be networking about 500 branches by the end
of FY04. SBI is simultaneously developing its 'core banking
solution' that, among other things, will provide full
connectivity to almost 2,000-2,500 branches, across the
top 80-100 cities. SBI has also computerised almost 4,100
of its branches and all branches are expected to be computerised
will also be able to do real-time transaction processing
and has an integrated customer database that should significantly
help SBI's cross-selling efforts, the report said. "Given
a customer account base of 70 million, any success at
cross-selling could potentially lead to significant revenue
SBI will also be able to leverage the technology platform
for enhanced risk management and loan pricing. The technology
platform is likely to be completed in 18-24 months (by
bank is implementing the technology project in phases
and by the end of FY04, it is expected to see about 500
branches fully interconnected, covering almost 30-35 per
cent of its business. It also plans to computerise all
its branches (though not interconnected).
when complete, the technology platform will cover only
about 2,000 branches and limited to the top 80-100 cities
that, in our view, is adequate for SBI to provide
stiff competition to most of the private and foreign players,"
the reports sums up.