IDRBT playing a pivotal role for banking & finance in India

Backed by Reserve Bank of India, Institute of Development and Research in Banking Technology (IDRBT), Hyderabad is an autonomous institute for higher education and research in areas of IT that have a broad relevance to banking and finance. Zia Askari from Cyber News Service spoke to Dr VP Gulati, Director at IDRBT on trends in the banking industry and the role that this institute would play in heralding change in this segment.

What kind of trends do you see in the IT deployment for Public Sector banks?

There is a need for banks to migrate from computing environments to distributed network solutions and a lot of banks have already done it. Many banks and financial institutions have enhanced their networks and communication infrastructure to reap the benefits of computerization.

In such an environment, information, a key corporate asset and a crucial factor for success, needs to be protected at all costs. Information security is becoming more and more critical to the successful operation of the electronic payment systems and is one of the major areas of concern today.

There are other issues such as Internet and Intranet technologies and applications being considered by banks seriously. Security and encryption for financial services is also one area where a number of financial players are moving to. In addition to that there is a fast trend for data warehousing and data mining of banks. 

What are the areas that you are focusing on as of now?

We are engaged in a number of research projects aimed at improving banking technology itself in India. The four major areas of focused research in the institute are financial network and application architecture, payment system and security technology, multimedia and Internet technologies, data mining, data warehousing and banking risk management.

We have developed structured financial managing system (SFMS) that can be used practically for all purposes of communication within the bank and between banks. We have already completed the pilot test with three pilot banks and have installed the SFMS in Canara bank, Bank of Maharashtra, PNB, Bank of Baroda, Andhra Bank, Indian Overseas Bank and
CCIL. 

We are highly focusing ourselves on SFMS and believe that with the help of this banks and financial institutions can link all their important, high volume branches through appropriate connectivity like PSTN/ISDN or leased lines. 

We have already advised the banks to be ready with the necessary hardware, software and networking infrastructure in this regard. All the banks are expected to immediately start implementing SFMS for their intra and inter-bank transactions by integrating their own applications with
SFMS.

We have also developed Indian Financial Network which is up and running for the Indian banks and financial institutions. It is the communication backbone for the Indian banking and financial sector. All banks, private and public, foreign, cooperative, etc. and premier financial institutions in the country are eligible to become the members of the network. 

It is designed to be a closed user group network and uses a blend of communication technologies such as VSATs and Terrestrial leased lines. The network consists of over 700VSATs located in 127 cities of the country and it utilizes one full transponder on INSAT 3B. 

Various inter-bank and intra-bank applications ranging from simple messaging, MIS, Electronic debt, online processing and trading in government securities, anytime/anywhere banking, and inter-branch reconciliation are being implemented using
INFINET.

What is the primary role of IDRBT in the Indian financial segment?

Our mission is to spearhead technology absorption to improve the functioning of the Indian banking and the financial sector. This mission is being achieved through development and implementation of technologies, research in the areas related to banking technology and consultancy and advisory services on focal areas of banking technology and its applications.

We are the certifying authority (CA) for the Indian banking and financial sector. As a certifying authority, IDRBT's role entails registration, issuance, renewal, suspension and revocation of digital certificates to applicants.

Why has anywhere banking not taken off the way it was pegged to be?

I don't agree with this. A lot of banks and financial institutions have done it already and some of them are in the process of finalization of the procedures for Anytime/Anywhere banking. This is surely the future of banking but at the same time it would take some time for these banks and financial institutions to have their funds in place for such initiatives.

As we move forward I am sure there is a lot of scope for applications such as anywhere anytime banking and we would always be there playing a pivotal role in the development and deployment of cutting edge technologies in the banking and financial segment.