Newsletter, October 2009 - IDRBT

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INSIGHTS FROM THE TOP : Dr. D. Subbarao, Governor, Reserve Bank of India, and Visitor, IDRBT, interacting with members of Governing Council at IDRBT MAKING IT DELIVER : A MAJOR INITIATIVE ON IT GOVERNANCE FROM IDRBT ITH the economic meltdown in the West and Governance, only can help banks in addressing this the resultant slowdown across the world, alignment challenge, he added. WCorporate Governance has assumed significance of an Making IT Deliver unprecedented magnitude. Now that pervasive use of With a view to "Making IT Deliver" its full potential to IT in enterprises across the world for internal and the banking industry - all its players and stakeholders - external communication, interaction, business we have launched a major initiative on IT Governance. processes and knowledge management has far outpaced all our expectations, the enormous capacity for IT The efforts started in January 2009, where we instituted, Governance to contribute efficiently and effectively to as part of our IDRBT Banking Technology Awards for Corporate Governance needs no emphasis. Excellence, a new award category for IT Governance The Banking Scene and Value Delivery. The feedback gathered from the Banks in India have come a long way as far as usage of Banks, gave us a better picture of the current status of technology is concerned. Most banks have attained conceptual awareness, reach, extent and depth of sufficient maturity in technology adoption. Some of implementation levels of IT Governance in Banks. them have even gone on to use IT in innovative ways. This led us to plan for a pilot programme on IT Now is the time to concentrate more on making IT Governance for Executives in the Top Management - implementation and usage more efficient and effective. AGMs and above. This two-day programme was For this, they will have to focus on the effective ways and successfully conducted on April 27 and 28, 2009. A means of unlocking value from the way IT is deployed, good mix of 22 executives from Business and IT Wings used, controlled and integrated into the business of the from different banks attended this programme. Bank. We also propose to mount a series of effective steps to There is an urgent need for spreading the heightened impress upon all the stakeholders to take IT sense of awareness needed for controlling and Governance seriously, as the only way forward for exploiting IT to the maximum extent to derive the full growth with value and values, without any further loss of benefit in terms of managed risks, reduced costs, time. As part of this initiative, we have also launched a improved returns, effectiveness and efficiency. research project to evolve an IT Governance Framework for Banks, which seeks to draw upon the Dr D. Subba Rao, Governor, Reserve Bank of India, best practices across various standards and frameworks and Visitor, IDRBT, in his address to the bankers, at currently available, apart from factoring in the views and the IDRBT Banking Technology Excellence Awards practical possibilities from the bankers themselves. function, held on May 18, 2009 highlighted that a major challenge in IT implementation for banks is the For more details on IT Governance initiatives and Inalignment - of Business, IT, HR and Organisational Company Programmes, please contact : Structure - which is so critical to derive value. IT Shri M.V. Sivakumaran, Assistant Professor Governance, an important component of Corporate (mvsivakumaran@idrbt.ac.in). 4
WINNERS ALL : Dr. D. Subbarao, Governor, Reserve Bank of India and Smt. Shyamala Gopinath, Chairperson, IDRBT with the winners of IDRBT Banking Technology Awards, 2008 IDRBT Banking Technology Excellence Awards 2008 Dr. D. Subbarao, Governor, Reserve Bank of India, and Visitor, IDRBT, presented the IDRBT Banking Technology Excellence Awards for the year-ended March 2008 on May 18, 2009. Speaking on the occasion, the Governor focused on the potential of IT in extending banking services to the under-served rural and semi-urban areas. "The use of Smart Card technology, mobile ATMs, coverage of post offices under electronic payments networks in outof-reach areas - all could play significant roles in providing financial services to more people," he stressed. He also outlined the focal areas for IT implementation in banks which includes enabling differentiation in customer service; Facilitating customer relationship management based on available information, which can be stored and retrieved from data warehouses; Improving asset-liability management for banks, which has a direct bearing on the profits of banks; Enhancing compliance with anti-money laundering regulations; and Complying with Basel II norms. Pointing out that in the years ahead, the ability of banks to harness new technologies to meet the demands of households and businesses will be tested, he exhorted the banking sector to meet the challenges head on, continue to find new and better ways to put technology to their and their customers' best use, and thereby efficiently manage the associated technology and business challenges. Shri B Sambamurthy, Director, IDRBT, in his welcome address, recounted the interesting journey of IT in Banking - starting as an IT monarchy yielding to Business Monarchy later and moving on to the current federal structure while connecting IT and Business. He stressed on the need for framing common, open and interoperable standards to bridge the digital divide and to get the best out of core banking platforms, which have become the engines of growth. Further, he advised banks to look beyond core banking, which essentially is a transaction management platform. 5
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