PSUs Struggle To Keep Pace With Technology
Despite their gargantuan sizes and profits public sector banks aren’t exactly hands down favorites to win any banking user choice awards. And when some reputed global business journal places an Indian bank on its list of top global or regional banks, it’s rare to find a public sector bank on the podium.
One reason for this sorry showing could be technology, or rather the lack of it, in public sector banks. While private sector banks leverage technology to offer innovative products and move on to technology-driven value-added services, public sector banks are still setting up core banking systems that offer basic anywhere, anytime banking services.
It’s no secret that Indian public sector banks are laggards in the technology stakes, and perhaps one reason for this state of affairs is the importance accorded to the CIO or CTO. Firstly, few public sector banks have CIOs and CTOs. Their technology departments are segmented according to their general management hierarchies and usually you have a General Manager (IT) or something similar.
While private sector banks optimize the use of technology by following industry best practices, Indian public sector banks are still wondering whether they should have a CIO and/or CTO. So, even as private sector banks move from CIO and CTO to create a position for a Chief Security Officer (CSO) and so on, the only CSO you’ll find in public banks is the one ensuring that the watchmen at the gates and the currency chests are on the job.
Besides, the PSU practice of IT heads who have either been transferred from or are on deputation from banking functions won’t be found in any best practice manual either. CIOs and CTOs are now expected to be business thought leaders, and drivers of innovation. However, in the PSU bank case, business leaders don’t trust their IT heads because they feel they don’t have enough core technology expertise, nor do they have a high level of banking industry expertise, considering they now run the IT department and are no longer involved in frontline banking.
That sometimes leaves a PSU bank IT head in the proverbial situation where he is between the devil and the deep seaeven if he wants to leverage technology to drive business, the bank management will find a way to throw obstacles in his path. And when you add the miles of red tape, political interference and sheer ridiculousness in some cases, is it any wonder that PSU banks seem stuck in another age?
Take a simple example: You’ll find many senior PSU bank executives don’t have an official e-mail ID that’s personalized. Rather, they have a long, departmental ID. Ask them why and the answer is that this is done to avoid misuse of e-mail. In a working environment where leisure seems to be prevail over any other work ethic (as any PSU bank customer who’s been at the receiving end would testify), that excuse clearly shows that PSU banks are still grappling with the basics of what technology can do for them. It also shows that IT heads can’t, or aren’t being allowed to reach their potential.
As the Indian customer matures, this is a dangerous place to be in. Unless PSU banks learn their lessons quickly, empower their IT heads to become thought leaders and bring in place world-class best practices, they run the danger of ending up on the losing side.
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