Technology would dominate banking activities and lead to the growth of the sector, according to a new report by the Confederation of Indian Industry and PricewaterhouseCoopers.
The report, however, cautions while banks have traditionally relied on technology solutions, including the biometric card and the customer relationship management (CRM) software, use of the telephone, mobile platform, automated teller machines, internet and televisions, with the emergence of technologies like cloud computing and social media, they should now “institute fundamental technological changes”.
Banks need to evolve from using the conventional modes of reaching out to customers through emails or attractive websites and, instead, use blogs and other online communities, the report says. These include cloud computing, software as a service (Saas), social media and Green IT initiatives.
Various businesses are adopting technologies such as cloud computing. About 70 per cent of IT resources captive in maintenance and operations are looking at a greater utilisation of these technologies in other business areas, thus maximising efficiency and building economies of scale. Adoption of cloud computing across the Asia-Pacific region (excluding Japan) would rise in 2010, according to Industrial Design Centre. The spending on IT cloud services is estimated at $42 billion by 2012.
According to Gartner, by 2012, about 20 per cent of businesses worldwide would own no IT assets, while India-centric companies would represent 20 per cent of leading cloud aggregators globally.
Banks and insurance companies are usually seen to struggle with the burden of huge data centres equipped with great degrees of computing power, most of which is under-utilised. Cloud computing, the report says, can provide answers to optimum data centre utilisation, and speed and cost efficiencies. Thirty-seven per cent of banks expect to deliver 10 to 25 per cent of IT services over the cloud in the next two years. According to a Datamonitor report, only six per cent of retail banks use social media to deal with customer queries, while one per cent plans to use it between 2011 and 2012.
The use of social networks by banks, however, still has a long way to go before it matches the popularity of mobile technology. About 33 per cent of respondents felt social media could be used for community-building and marketing and promotion, while only 22 per cent felt social media could be used for product research and customer service. Other areas where social media could be useful include alumni engagement, recruitment and relationship management.
For banks, the use of social media would lead to improved marketing, capturing consumer perceptions, brand building and increased product research. It would also help establish a relationship with customers. Such platforms also offer transparency to bank transactions. Convergence of voice, data and video, other social networking features, makes this space more attractive.
SaaS, a software distribution model in which applications are hosted by a vendor or a service provider and made available to customers over a network, typically the internet, can ensure all locations use the correct application software version. Banks can benefit through the use of this software, since the format of the information being recorded and conveyed is accurate. The model helps reduce management burden for corporate applications and increases their availability to locations. It provides improved efficiency, lower risk and relevant return on investment.
Green IT is the optimal use of information and communication technology for managing environmental sustainability of enterprise operations and the supply chain, as well as those of their products, services, and resources. According to Symantec’s 2009 Green IT Report, 97 per cent respondents in a survey said they were discussing a green IT strategy, while 45 per cent had already implemented green IT initiatives.
