The year 2020 was a busy period for the technology department of Rs 10,697-crore RBL Bank, which is among the 150 largest publicly listed enterprises in the country. Its CIO organisation announced a clutch of strategic alliances to bolster the bank’s cloud migration.
Mumbai-headquartered RBL Bank had 9.1 million customers as of 31 December 2020. By then, it had tied up with Accenture for future readiness of its IT (information technology) systems, signed up cloud services giant AWS to move from traditional procurement of infrastructure to pay-as-you-go, and brought in Infosys for Finacle's extensive open API (application programming interface) repository.
Covid-19 became the context for RBL Bank to push for a new technology infrastructure.
In May 2020, Vishwavir Ahuja, managing director and CEO of RBL Bank, outlined the technology vision to analysts in an investor presentation as the pandemic was setting in. It wanted to leverage technology to acquire, engage and service clients. Towards this end, it was evaluating fintech partnerships with MoneyTap and Zeta.
But there was a larger challenge afoot: device scarcity for RBL Bank whose 7,221 employees would have to work from home.
Before the lockdowns began, RBL Bank had remote access for far fewer employees. This was enabled for employees who travelled, as well as for management committee members. Even branch people in vigilance, and senior employees had remote access to the bank systems. In all, the number was between 120 and 150 employees with limited mobile access to the systems.
As the new reality set in, the challenge was to give universal access to all systems. “We needed physical equipment: enough VPN ports, laptops and connectivity,” recalls Sankarson Banerjee, chief information officer (CIO) of RBL Bank.
This was a physical challenge because the IT services exports industry had begun sourcing laptops and equipment as early as January 2020. It left fewer devices for the domestic market.
“Provisioning of laptops for our employees owing to the new world order was a challenge initially,” says Banerjee. “All that had to be upgraded in the midst of the pandemic and at very short notice. Information updates were happening periodically. We had to adapt very quickly.”
Banerjee got the management buy-in for BYOD (bring your own devices) to be implemented for RBL Bank’s employees who would be working from home.
“It was difficult to find laptops, so we had to do BYOD. There were no laptops in the market. Company-issued laptops were secured by putting a lot of restrictions. For BYOD, we had to follow a different strategy altogether to secure employee’s individual mobile phones,” Banerjee explains.
Earlier, mobile phone access to the network and emails was disallowed except for the 120 to 150 senior employees. “Now, the entire bank has mobile phone and email access. But we had to roll it out with security and the right strengthening,” he says.
In April 2020, RBL Bank like other businesses faced an unprecedented situation caused by the Covid-19 outbreak. Within a financial quarter, its IT organisation had to revamp policies at full scale, and change the firewall rules to enable mobile devices.
The programme was complete by June end. “We did a full-fledged revamp of what our proxy rules are supposed to do, (adding) new categories of proxies. Earlier, the junior category had no internet access,” Banerjee says. The team rolled out Microsoft Teams in one and a half months.
More importantly, RBL Bank rolled out a new cloud-based proxy. This is an online substitute of a hardware appliance at a corporate datacenter. A proxy server acts as a gateway between the enterprise and the internet, and verifies and forwards incoming client requests to other servers for further communication.
“If you do on-premise proxy, then your entire access requires you to come on premise first, and then go out to the internet,” Banerjee explains. “We went for a cloud-based proxy whereby the same rules can be enforced but you don’t need to come to the physical office datacenter. We had to negotiate and buy it, test it, and deploy.”
Initially, employees had varied video-calling preferences—Google Meet, Teams and Zoom. As the data leak prevention policy was not available for all these setups, the IT organisation restricted communication to just video chat, no sharing of presentations, among several other restrictions. “When we moved, we had to move quickly to Microsoft Office360. Teams has been very useful for us,” Banerjee says.
In the third quarter of the financial year, the strategic alliances with Accenture, AWS and Infosys were announced. Accenture would help RBL Bank bring convenience and better user experience, process efficiency, and analytics for cross-selling and up-selling of bank products to a digital customer base.
The CIO organisation had helped create a responsive workforce to deal with the early trends that RBL Bank had noticed during the lockdowns. For instance, digital savings accounts were expected to double from 500 per day. Digitally sourced recurring deposits and fixed deposits had doubled in the few months before the pandemic began, and digitally stored deposits were 65% of all retail deposits.
RBL’s chatbot “RBL cares” was seeing more than 1 million conversions per month, of which 40% were new customer inquiries. Its Aadhaar enabled payment services (AEPS) were seeing three times increase during lockdown.
“Luckily, we had a team that was able to react on their own, as opposed to waiting for directions from the top,” says Banerjee, adding that the company-wide adoption was largely because the workforce is far more digital-friendly now than some years ago. “We had some fantastic adoptions, and flexibility—more at the mid levels. They were able to move fast, produce solutions quickly on the infrastructure and remote working access side.”
Over 30% of the workload has moved onto the cloud.
While the banking and financial services industry is heavily technology dependent, it is also the most conservative. In India, there is another tendency banks have had: to invest in established technologies that are mature, as opposed to emerging technologies.
As a result, most banks in India get stuck with technologies they invested in around seven or 10 years ago. For instance, many bank systems are based on the IBM AIX (Advanced Interactive eXecutive) technologies, which are no longer the cutting edge. “They are very dependent on traditional databases of vertically scalable, big large boxes in the centre, as opposed to the cloud-based world of hundreds of tiny databases. Dependency on such products is quite high,” notes Banerjee.
With digital banking, the boundary between fintech and banking has blurred. If the first wave saw banks open up to customers on the internet, the current wave is seeing fewer customers visit bank branches. “Banks have to shift to their internet and mobile application base being primary channels for both individual and institutional customers,” Banerjee says. “The new revolution is in payments or transactions, where there is no interface at all,” he says. “Customer servers will directly initiate a transaction to your bank servers. There is no human at all in the middle, which is increasingly common.”
To create such processes, Banerjee looks to the hyper-funded technology sectors in India like e-commerce and food tech for inspiration.
If Walmart generates an invoice, which directly flows into the system of its bank, that payment gets processed all the way down to the vendor. Similarly, in India, different groups have setups with many different banks, where an ERP setup initiates a payment transaction that gets executed by the bank and goes directly into the bank account of the recipient—the supplier of the goods.
Banks have had to change to this apparatus in real time. From handling a large number of small transactions, the number of transactions is now much larger than banks are used to. The speed of transactions is higher, occurring in real time and 24/7.
But this is routine for an e-commerce, shipping or pharmaceuticals company, says Banerjee. While banks used to stop work, payment and core transactions of the bank are 24/7, which has begun to shift the way in which banks invest in technology. “There is an EOD (end of day) process and BOD (beginning of day) process, which indicates that a day ends. Therefore, a lot of recasting is now happening to say the date change process goes on when transactions continue. There is a lot of systemic rethinking needed to make that happen correctly,” Banerjee explains.
When NEFT (National Electronic Funds Transfer) became 24/7 (in December 2019), the implication of that was that the bank’s treasury limits are not 24/7. So how does the system know the bank has enough money to fulfil obligations if somebody does a large NEFT transfer? “Increasingly, we are working towards how to make our treasury systems full time, so that we can go on to do normal NEFT full time,” Banerjee says. “Same with Real Time Gross Settlement (24/7 RTGS since 4 December 2020)—liabilities issues, liquidity management issues happen even there. We need risk management people and vigilance people at 2 AM… the whole infrastructure has to be rethought.”
Banks are morphing from fixed time slot organisations to e-commerce styled 24/7 styled organisations, he says. “This is a very large shift we are seeing.”
Amid the large shift, Covid-19 provided the impetus for RBL Bank to move to cloud. Between April and September 2020, its IT infrastructure handled 232 million transactions.
“In customer service for e-commerce, there is no call centre involved to understand if the customer’s package is ordered or not, shipped, and so on. You don’t have to call anybody,” Banerjee says.
“However, bank customers have mostly been expected to call banks if a transaction has not happened. Or if it has happened, but the customer doesn’t know the status. Increasingly, we are changing that to ‘you don’t have to call’,” says the CIO of RBL Bank. The information that the call centre has of a transaction is shared with the customer. With that, there is no call centre, vigilance or treasury person required at 2 AM—there can be real time access to information. “We are not there yet, but that is the thinking we are incorporating.”