26 June 2017

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Securing the Banking Transactions

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When we say that technology has deep penetration among all the Indians, we usually refer to some key social changes. The way we communicate, the way we shop and the way we use our financial transactions. These social changes especially with regard to IT penetration have made our day to day life’s utility processes quick and comfortable.

 Now, coming over to Indian banking industry, that is in the midst of IT revolution. A combination of regulatory and competitive reasons have led to increasing importance of total banking automation in the Indian Banking Industry.

Information Technology has basically been used under two different avenues in Banking. One is Communication and Connectivity and other is Business Process Reengineering. Information technology enables sophisticated product development, better market infrastructure, implementation of reliable techniques for control of risks and helps the financial intermediaries to reach geographically distant and diversified markets. One of the largest beneficiary segment for such automation is the micros, small business segment of India.

In a recent development, Datacraft, one of the leading independent IT solutions and services company, has been awarded an IT security infrastructure and datacentre upgrading project by Lakshmi Vilas Bank (LVB).

LVB is one of the most established banks in South India and has a network of 273 branches, one satellite branch and eight extension counters, spread over 16 states and the union territory of Pondicherry.

However, the bank has very dynamic focus towards the MSMEs of south Indian region and is proactively looking at serving its customers at the best possible way and get as closer as possible.

With further expansion in the plan, LVB has called upon Datacraft to upgrade its IT security infrastructure and datacentre. LVB realised that its existing infrastructure needed a complete overhaul.

“We have recently doubled our presence in other states and it was very critical to keep our IT infrastructure, expansion ready,” VS. Reddy, managing director for LVB stated. RBI (Reserve Bank of India) guidelines also call for end-to-end data security for all financial transactions and we wanted to ensure that the IT network backbone had the capacity to cope with increased demand. While emphasizing on this point, Mr Reddy also said, “We were looking for a fault-tolerant, resilient, and highly available infrastructure which involved switching and routing, and security for all our branches. In addition, it needed to accommodate future technology advancements with increasing customer base calling for the need to upgrade the datacentre.”

However, recognizing the value that Datacraft has bought for his bank, Mr Reddy also added, “Datacraft had the requisite experience in the financial services sector and an in-depth understanding of deploying advanced Cisco solutions to implement this next-generation datacentre solution.”

The solution and the contract between the bank and IT solution provider required Datacraft to design and implement the datacentre upgrade as well as to provide ongoing support to ensure a high level of operational performance. As reliability and scalability are a challenge, MPLS-based network was deployed for all core connectivity, and using ISDN as a fallback.

“The Datacraft team adopted a consultative approach to identify the gaps in the existing network and security infrastructure, and provide a modular solution to fix the gaps by re-architecting the existing infrastructure. This has resulted in significant financial savings for the client,” said Sunil Manglore, CEO of Datacraft India.

“Our expertise in addressing the specific needs of the financial services industry is evident in the success of this project and the work done for other major banks in the country. Working closely with Cisco and other vendors, the team put together a solution that served to enhance LVB’s  over all business efficiency” he concluded.

In view of this, technology has changed the contours of three major functions performed by banks, i.e., access to liquidity, transformation of assets and monitoring of risks. Further, Information technology and the communication networking systems have a crucial bearing on the efficiency of money, capital and foreign exchange markets.

Now since the slowdown phase is getting over, and the market seems to be coming back on track, it is critical to build an the infrastructure which is customer friendly. The banking segment is on the same track and technology has a great role to play in this.


The modernisation of Indian banking:

In the five decades since independence, banking in India has evolved through four distinct phases. During Fourth phase, also called as Reform Phase, Recommendations of the Narasimham Committee (1991) paved the way for the reform phase in the banking. Important initiatives with regard to the reform of the banking system were taken in this phase. Important among these have been introduction of new accounting and prudential norms relating to income recognition, provisioning and capital adequacy, deregulation of interest rates & easing of norms for entry in the field of banking.

Entry of new banks resulted in a paradigm shift in the ways of banking in India. The growing competition, growing expectations led to increased awareness amongst banks on the role and importance of technology in banking. The arrival of foreign and private banks with their superior state-of-the-art technology-based services pushed Indian Banks also to follow suit by going in for the latest technologies so as to meet the threat of competition and retain their customer base.

 

 

Last Updated ( Thursday, 07 October 2010 02:18 )  

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