IT Drives Competitiveness For ICICI Bank

by Amit Tripathi    Feb 11, 2005

The famous quote by Nicholas Carr, ‘IT does not matter’ can put thought leaders in tizzy for its literal meaning. However, what was intended through the statement was the conviction that IT does not matter anymore, as it is now affordable and more significantly ubiquitous in its application by enterprises to gain competitiveness–a case in point being ICICI Bank.

Speaking at the recently concluded Nasscom 2005, Lalita Gupte, Joint MD-ICICI Bank, focused on how IT has helped the enterprise in gaining an upper edge in the competitive banking environment in a short span of time.

Spelling out the market realities, Gupte said, “The competition has become stiff with the market opening up for global players. As a result, India became a lucrative destination for them. Moreover, large Indian enterprises too began going global.”

“We had to concentrate on five prominent aspects namely, value proposition from our bank, customer service, shareholder’s concern, and suppliers and regulator’s expectations. For all this IT became a great vehicle. As volumes shot up, the changes in the patterns of customer behavior were adequately handled by technology. It helped in real time innovation in our product portfolio,” added Gupte.

Going one step ahead in providing customer service, IT was used to facilitate customer conveniences. Says Gupte, “We introduced biometric based authentication as an added measure of security and convenience. We also use centralized automated services to reduce error rates in transactions as well as other processes. An elaborate customer relationship management (CRM) system is in place to record customer preferences.”

Similarly, technology is put to use to address profitability enhancement for shareholders as well (for instance imaging technology is used towards centralized processing). The regulator’s expectations are taken care of by providing updated information. On the supplier’s side, integrated systems have resulted in seamless order flow, reduced reconciliation problem, and reduced dispatches.

Gupte informed, “Our recent entry in Bahrain is enabled by IT and the operation costs there could be kept low as a result of this. We can operate at 10% of the cost of other international banks, due to the scalability present in our IT arsenal.”

If statistics are anything to go by, Gupte provided them in plenty to prove her point. Branch banking at ICICI Bank has reduced from 94% in 2000 to 25% in 2004 where as ATM banking has increased from 3% to 43% in the same period, while call center activity shot up from 1% to 11% in the same duration.

But what roadmap should mid-size banks adopt in terms of IT usage?

Gupte answered, “Mid-size banks should start off on pay-per-use mode. Most importantly the business technology decision makers in such enterprises should first ask why and what technology is to utilized towards a particular process.”

Tags: ICICI Bank