Banks’ software does not match needs, says PwC
A new study states that the inability of vendors to develop software, which matches business needs is a big concern for Indian banks, reports M Rajendran.business Updated: Jun 26, 2007 04:04 IST
The inability of vendors to develop software that matches business needs and the difficulty in enforcing service level agreements (SLAs) remain major concern for banks in India, according to a new study by PricewaterhouseCoopers and the CII. Security and business continuity are also important issues, the study found.
More than 50 per cent of the 265 banks surveyed had software that did not meet their needs, the report titled 'Technology readiness of Indian banks' says.
“Technology in Indian banking has surely emerged from being "reactive" to” proactive" and the need of the hour is to enhance the foundation on which applications of the future can safely stand, if a bank is to lead through the next wave of growth in banking,” says the survey.
Public sector banks incurred an expenditure of Rs 10,676 crore on computerisation and development of communication networks between September 1999 and March 2006, according to the latest RBI report. It also mentions that more than 95 per cent branches of public sector banks at end-March 2006 were fully or partially computerised.
Out of 27 public sector banks, branches of as many as 10 public sector banks were 100 per cent computerized, while branches of another 12 banks were more than 50 per cent computerised. Branches of only five PSBs were less than 50 per cent computerised.
Around 44 per cent of survey respondents touched upon the need to hire, retain and motivate people. According to them it was comparatively easy to hire people and train them. However it is becoming increasing difficult to retain people with the desired skill set, as there is heavy attrition.
The Indian Banking Industry is witnessing significant double-digit growth. The sector is also slowly emerging into a market that is becoming increasingly regulated in keeping with global trends and practices, says the report.