Srinivas Muppaneni
Group CIO,
State & Central Cooperative Banks of Andhra Pradesh

Technology Powers Banking Operations

The age of digitization and move toward the adoption of new technology have transformed the way banks do business today. Information technology (IT) has played a vital role in shaping India’s banking scenario. Banking technology is today directly influenced by the spread of smartphones and extensive availability of 3G and 4G networks. Advances in technology have also created newer customer expectations, multi-channel structure, and progressive product offerings in the banking industry.

Banks today have the onus of being proactive in technology, making themselves available to customers anytime and anywhere, and staying ahead of the competition. Interestingly, these factors also serve as the basis for emerging trends in the banking industry of 2017. Banking technology is emerging as synonymous with the concept of everyday banking.

Technology Trends in Banking

Significant shifts in the business environment, economic volatility, changing customer and staff expectations, and the adoption of new technology make it increasingly challenging for banks to navigate technology strategy alternatives and prioritize technology investments.

Every company should have a visionary approach to become a high-performance business in this ever-changing climate by conducting a comprehensive analysis of how technology trends will impact businesses in the next three to five years. The vision helps businesses discern, anticipate and adapt strategically to the shifting risks and opportunities that lie ahead.

Business capabilities need to be essentially elastic, capable of flexing to adjust to any level of economic volatility, and able to catapult an organization to unprecedented levels of performance. Behind such elasticity are four major technology trends: data and decisions; mobility; convergence of collaboration, communication, community, and content; and Internet computing. In addition, every organization should see three factors that could significantly accelerate or decelerate the adoption of these trends in the banking industry: the millennial generation, cyber security, and sustainability.

This paper presents a review of the technology vision for banking by exploring how each of these technology trends and influencing factors will impact banks in the coming years. In particular, we discuss how these trends will affect the four main areas of a bank’s operations: the corporate core, manufacturing, the hub, and distribution.

The millennial generation, loosely defined as those individuals now between their mid-teens and late twenties. The millennial generation represents young people who have grown up in a milieu of email, multi-player games, MP3 music, digital cameras, mobile phones, social networks, and other trappings of the digital world.

Because of comfort with technology, the millennial generation as a workforce will have greater expectations about the availability of technology and its use in the workplace. Company reputations are continually being shaped and reformed by new generations and changing workforces. These reputations will greatly affect an organization’s ability to sustain its competitive advantage in the coming years.

Millennial generation customers are key to future sustainable growth. Banks will need to target millennials with a truly differentiating approach, including innovative new advertising formats, tailored offers pushed over new remote channels, and new packages relevant to millennials’ needs and their innovative communication means. Bank’s Virtual Wallet is targeted at millennials as an online banking and money management site that combines checking, short-term savings, and savings for long-term growth. It features interactive payment and money management tools, such as bill pay, a planning calendar, wish list, and a slider tool to seamlessly move money between accounts.

Cyber Security and IT Risk

Already, the security and availability of IT systems, networks, and data assume critical significance in terms of ensuring business continuity. It is by no means a stretch to say that Internet computing increases security risks in many ways. However, it could be argued that risk actually is reduced by Internet-based and cloud computing because organizations increasingly can entrust their systems and data to providers for whom managing IT is a core competence.

Banks need to secure data and protect identities, address threats and vulnerabilities, and meet stringent compliance demands while reducing costs and increasing profitability. Integrated security solutions can increase the speed, efficiency, and quality of business processes for direct improvement of a company’s bottom line.


While the dramatic drop in energy prices in the latter half of 2008 has made energy conservation a lower priority than last year, longstanding and widespread concern about global warming and climate change continue to influence many companies’ policies and regulations.

Transparency and sustainable performance is growing in importance for banking senior leaders, consumers, investors and employees. Climate change has already started to impact the business of banks. Supply chain reviews and in particular, assessment of banks’ IT energy efficiency, are resulting in a reduction in costs and higher productivity for banks. And with direct regulation on carbon emissions and sustainable lending practices expected in the medium term, many banks are committing to sustainable development programs and launching green products.

Here are a few anticipated trends that are likely to take the Indian banking industry by storm in 2017.

Diligent multichannel network. Exploring and uncovering multiple channels of communication to customers and other banking partners will be critical for banking industry growth in coming years. Banks should invest wisely to understand customer analytics, as this can help derive efficient channels to engage with customers.

Proactive social engagement. Engaging with customers on social media platforms and other social networks fosters customer trust and confidence. One of the most important needs in banking technology for the future – social media engagement – allows customers to regard the bank as a go-to source anytime.

Re-engineered workforce. Synchronizing the advantages of technology with the skills and capabilities of the workforce is a significant attempt to maximize operational efficiency and workplace safety.

Smart banking. Smart banking involves tapping software intelligence at every stage of banking from decision making to exploring innovative opportunities. Proactive deployment of relevant banking technology is critical.

Tapping the potential of the Internet. In 2013, India’s online user base crossed 200 million and thereafter, it has been growing by leaps and bounds. Despite the rise in Internet usage, the Indian banking industry has been rather slow in terms of online penetration. Online users and banking customers have moved from desktop to handheld gadgets, thereby increasing the need for responsive websites and mobile friendly banking elements.

In order to rise above the competition, banks will be expected to make a clear customer-centric proposition and define capabilities that include digital innovation, a vision for the future, appropriate investment choices, and scalability to work towards the goal.

Internet for Greater Business Agility

The Internet is rapidly becoming the focus of more and more IT-based business capabilities for many good reasons. First, it reduces cost. For instance, virtualization and cloud computing typically lower infrastructure, maintenance, and energy costs. Internet computing also provides elasticity, scalability, and greater business agility such as near real-time risk calculation results, and infinite computing capacity on demand.

Significant advances in Internet websites will enable improved and personalized experiences for customers and staff. Across the common processes of the bank (such as pricing and customer management), the focus of Internet computing will be putting in place the technical capabilities to make planning and knowledge available across multiple distribution channels and improve the staff experience.

At the production infrastructure layer of the bank, virtualization will prevail as companies work to reduce costs and increase flexibility.

The Way Forward

The very innovations that drive business growth and value also create first order cyber risks. Innovative technologies such as chip-based cards and SMS-based OTPs have helped the banks to implement security controls to mitigate traditional cyber risks. However, as the technology has evolved, attack vectors have also become more sophisticated. Questions are now being raised on technologies that were previously thought as secure. We are only as secure as our weakest link. Looking at cyber threats in isolation severely limits our ability to understand the complete impact of cyber risk. There is a need for enhanced cyber-risk-assessment framework and testing methodology to continuously detect and protect against evolving cyber threats. While being secure is more important than ever, there is a need to also be constantly vigilant and resilient in face of evolving cyber threats.

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