technology for the future banking

1. Workshop on The Future of Banking organized by HMA & ISB (October 30, 2004) Vepa Kamesam Former Deputy Governor, RBI Currently Chairman, IDRBT/BRBNML

2. Technology and Banking The Quintessence Nature of Banking harmonizes closely with Technology – Banking Technology Information Storage Processing Transmission Tasks Common to Both

3. Pervasive Branch Network Global Operations Complex Credit Calculations Innovative Risk Management Mass Transaction & Items Processing Banking and Technology

5. Focus aspects of Commercial Banking now are: Core Banking (CBS) ATMs Card Management Any Branch Banking Document Management Risk Management Resource Management MIS & Intranet CRM Corporate Network Electronic Banking POS Terminals and Cash dispenser BANK’S BUSINESS BANK’S BUSINESS RAISING DEPOSITS LOANS & MISC. SERVICES

8. Technology Differentiation Fades Gradually….

10. Elements of Technology as a Differentiator Scalability & Flexibility Efficient utilisation, mgmt Process enabling Utility to customer Support Skills For Long-Term Differentiation

12. POS Terminal and Cash Dispenser POS Terminal Connected to Cash dispenser

13. Electronic Banking ATM Head Office Branch Banking Branch 1 Branch 2 Branch 3 Branch 4 Branch 5 Branch 6 Branch n

17. Technology and Banking Supervision THE RBI RESPONSE Offsite Supervision & Monitoring OSMOS COSMOS (Non banking Financial Companies / Development Financial Institutions) UBD Soft Credit Information Bureau (A joint venture between Housing Development Finance Corporation Ltd., State Bank of India, Trans Union International Inc. & Dun & Bradstreet Information Services India Pvt. Ltd.) Will be covered in detail by Speaker Dr. T.V. Gopalakrishnan

21. IT and Payment and Settlement Systems Demateria-lisation Of Securities Delivery Versus Payments Payment Versus Payment Continuous Linked Settlement Electronic Dealing Platforms Real Time Gross Settlement Central Counter party Secured Netting Systems

22. RBI INITIATIVES IN PAYMENT & SETTLEMENT SYSTEMS Compliance with BIS Core Principles RTGS CFMS NEFT PKI-based Security SFMS Clearing Corporation of India IDRBT PDO-NDS & SSS NFS/IBPG INFINET

25. Financial Networks INFINET Gateways and Integration with Other Financial Network Services G1 - SWIFT Network G2 - Reuters Network G3 - Stock Exchange Network G4 - Inter Banks/FIs G5 - Shared ATMs G6 - Clearing Operations Network G7 - Internet Corporate Network Inter Banks /FIs Network Shared ATMs Network Clearing Operations Network SWIFT Network Reuters Network NSE Network G1 G1 G2 G2 G3 G3 G1 G2 G3 G1 G2 G3 G1 G2 G3 G4 G4 G4 G5 G5 G5 G6 G7 Internet

26. Structured Financial Messaging System Branch-1 Bank-1 Gateway Bank-2 Gateway Bank-n Gateway Branch-2 Branch-n Branch-1 Branch-2 Branch-n Branch-1 Branch-2 Branch-n Central Server at IDRBT ……… ..…………….….. ……… ..…………….….…….. … … … … … … …… .…… …… .……

27. PKI Hierarchy CCA IDRBT CA RA Subscriber IDRBT CA Repository RA RA Subscriber Subscriber Subscriber Subscriber Subscriber

28. IP Address:202.138.123.68 Subnet Mask: 255.255.255.254 Location: Mumbai CashNet NFS CONNECTIVITY with Existing Consortiums & Individual Banks National Financial Switch & E- Payment Gateway ISDN Primary Link Backup Link Broad Band VSAT Bank 1 Bank N ISDN MITR Location: Chennai BANCS & Cashtree Location: Mumbai ISDN Leased Line ISDN ISDN Leased Line Bank 2 Leased Line Leased Line ISDN Leased Line INFINET

30. CFMS Settlement Accounts IFTP Strip & Store Processes IAS SSS Intra Day Liquidity RBI Payments and Actg. Entry Interface INFINET NSS Participant’s Interface Participant’s Interface Participant’s Interface Real Time Gross Settlement

36. Technology Vision of the RBI Centralised Database Management System Enterprise Knowledge Management System Integrated Accounting System Integrated Government Accounting System Currency Operations System Desk Top Decision Making Capability Desk Top Analytical Capability Desk Top Transactional Capability Securities Settlement System Integrated Establishment System Offsite Supervisory Systems Integrated Forex Management System Human Resource Information System

38. Pre-requisites for Technology Planning for Disasters Business Process Re-engineering Human Resource Empowerment

45. How to Ensure Security??-A Framework Assess Detect Respond Protect

46. IDRBT’s Solutions for Security Risk Management (SRM) Risk Assessment Gap Analysis IS Audit Awareness by Training Policy & Procedures Development Implementation SRM for Banks PKI INFINET

48. The future will be not be more of the same… … we need to be ready.. Thank You