Presentation On

1Core Banking Project, State Bank of India

Presentation on

CBS Project Planning

& Implementation

At NIBM, Pune


What was not envisaged

Major Customisation

Delivery beyond

expectations

Overcoming Stumbling

Blocks

Improvements over

Existing System

Why Core Banking-

Benefits

CBS- Genesis &

Imperatives

Architecture

Implementation

Methodology

About CBS Solution

Rollout Mechanism and

CBS Journey

Core Banking Overview

Process Change


CBS-The Imperatives

Rising customer expectations/ Competition

Group synergy

Regulatory Requirements

Efficiency in operations

Reduce transaction cost

Settlement and management of funds

Timely and accurate MIS

Risk Management


Initial Expectation-

To cover 3300

branches in a 5 years

spectrum (by year

2008)

Bank’s Long Term

Technology Plan-

2000

Evaluation of

Vendors (Year 2000)

Evaluation, bench-

marking & selection-

2001

KPMG

recommended FNS

Contract in

October’ 02

The Genesis


Organisational and

performance

management

implications

Alternate

Channel

Design

Database

Marketing

capability

Core Process Redesign

CBS

Branch

Redesign

• 3

CPC

Design

• 2 • 4 • 5

• 6

Change Management• 7

Scope of the effort is

covering all

branches of SBI

under CBS

1

2 34 5

The Initiatives


Architecture

Client/ Server Architecture

Centralised host controlling a series of

remote clients

Each remote client controlling a series of

dumb terminals

Remote clients also storing a limited

amount of data to minimize dependability

on host

Cont…


Architecture

Client/ Server Architecture

A versatile modular infrastructure

designed with enterprise-class architecture

Intended to improve usability, flexibility,

interoperability, and scalability (LINK)

Supports high volume and dispersed

network

C-EDGE annexure.doc


Implementation Methodology

Implementation on SDLC style

Feasibility Study

Requirement Analysis

Designing

Development

Implementation

Post Implementation

Cont…



Initial Rollout to commence on a prototyping

Implementation method

Parallel switch over followed for a limited period

Further rollout to follow iterative development

style

Deviations from SDLC during the course already

discounted

Cont…



Certain degree of Bankmaster usage for

enquiry purpose only

All modules but not all functionalities

covered

Decentralised Implementation policy adopted


The Solution Providers

• B@ncs-24 / B@ncslink - Core Banking software from FNS Australia

• Finance One – CGL software from Comlink, USA

• GLIF Interface

• EximBills – Trade Finance software from China Systems

• Hardware – HP Systems, USA

• System Integration/Customization/Pilot implementation- TATA Consultancy Services


Overall Solution


B@NCS-24 Architecture

Dep

osit

s

Lo

an

s

GapsPositions Ladders ALM Query

TrickleReplayRestart

BNCONS

Transaction Management

SWIFT

Clearing

Messaging

GP Gateway

Delivery Channel Management

IVR InternetDumb

ScreenATMBTM200

0

Interfaces

FX

MM

Secu

riti

es

User

Language

Timing

Formats

Fees

Interest

Secondary

Update StatisticsDiary

Clearing

Reports

Relational Data Base Tables … CIF, Deposits, Loans, Trade, FX, Jrnl etc

Data Base Input/Output Control


Branch Terminals ATMForeign

Exchange

DATABASES

CGL

CORSP

GLIF

DBIO

CHRG

MRKT

UT9999

LIMIT

DEBT

EFTPOSInternet

Banking

GATEWAY PROGRAMS

D

E

P

L

O

N

C

I

F

S

P

M

B

R

A

C

A

S

C

T

A

E

L

M

V

I

S

N – Tier Architecture

APPLICATION LAYER

PRESENTATION LAYER

DELIVERY LAYER

DATABASE & SERVICES


System Layers - Technology • Presentation Layer

– B@NCSLINK - .NET Framework, IIS, IE 5.5+

– GUI Driven by HTML and XML

• Delivery Layer

– Interface between Front-End and Host Application

– C, C++, COBOL

• Application Layer

– C, COBOL

– Driven by system triggers, parameters and environment settings

• Database Layer

– Interfaces to Database using appropriate call levels and language


Web Service IIS

Microsoft .NET Framework

Windows 2000 Advanced Server

Oracle 8i or 9i

Windows XPIE 6.0 and above

XML Messages

ASP Services

HTML /XML

COM Objects

Branch Environment

Branch Server

Branch Database

B@NCS-24Client Workstations

Eximbills FileServer

Database

Windows XPOracle Client

EximbillsClient Workstations

ODBC Call

No CGL

Component in the

Branch Server


24 x 7 Processing

GATEWAY

NETWORK

Database

BANCS

DAY

SYSTEM

Day

BANCS

SHADOW

SYSTEM

Database

Shadow

Database

Reference

Day

Processing


GATEWAY

NETWORK

Database

BANCS

DAY

SYSTEM

Day

BANCS

SHADOW

SYSTEM

Database

Shadow

Database

Reference

24 x 7 ProcessingNight

Processing


GATEWAY

NETWORK

Database

BANCS

DAY

SYSTEM

Day

BANCS

SHADOW

SYSTEM

Database

Shadow

Database

Reference

24 x 7 ProcessingDay Begin

Processing


Transaction Flow

Supervisor

Console

Teller Console

Request Web Page

Return Web Page

Send Transaction

Requests Authorization

Supervisor Authorization

Transaction Action

HOST

BRANCH

SERVER

Response

Response

ResponseDatabase

1

2

3

4

5

10

7

8

9

6


Treasury

Internet Banking

ATMs

MIS + DW + DM

Internal InterfacesALM + Risk

Management

IBR

Branch Network

Core +

Trade + GL

The Complete Picture


Corporate General Ledger

Manual

Intelligence/ Adjustments

Bank Master

Branch

ZOWEEKLY

BANK

CONSOLIDATED

REPORT

SBI

CONNECT

WAN

CDC

CENTRALIZED

DATABASE

FINANCE ONE

Cleaning &

Consistency

Check

CORE BANKING

BRANCH

Daily

CBS

Weekly

12

1+2

GL

IF

Da

ily


Rollout Mechanism

Retail

Transactions-

Bancs24

from FNS

Transaction

Consolidation

& Reporting-

Finance One

Trade

Finance-

EXIM bills

from China

Systems

Other

Interfaces

like ATM,

INB etc


Rollout Mechanism

Migration methodology:

•Enrichment of data in legacy software

•Additional data capture & data cleaning through internal tools

•Data extraction

•Data migration – validations

•Migration on all days of the week – max done: 30 brs. / day

•Staging / mock migration: delegated to Circles

•Migration Audit


Rollout MechanismRollout Methodology

•In-house teams

•Roll-out de-centralised, through Circle / ZO implementation teams

•Core Team at Belapur for value addition

•Hardware set-up / Branch environment creation by local resources

•Adequate number of teams at each Circle with different skill-sets: Migration, Technical & hand-holding

•Comprehensive documentation/sign-off


Rollout Mechanism

Training Methodology:

•Training & Change Management: Key success factor

•Training of initial key resources at Belapur

•In-house training: SBIICM + STCs (50 channels)

•User Manuals

•User Meets / Workshops

•Project InFocus: On-site training

•Resources of existing CBS branches

•CBS Club: peer level learning


Rollout MechanismTesting Methodology:

•Unit & System Testing by Integrators

•UAT: Testing Plan, scenarios & cases

•Multiple iterations – entry & exit criteria

•Benchmark for showstoppers & critical errors

•Fixes – monitoring through DCMS

•Regression testing (Rational Robot)

•Performance Testing

•Validations through Prototypes

•Challenge: Synchronising with production & parameters


Rollout Mechanism

Outsourced services:

•TCS : CDC operations

•Satyam: UAT methodology

•Thinksoft (TGS): Acceptance Testing

•L&T Infotech: CA Unicenter – Service Desk,

ITRM

•NIIT: e’Learning

•Paladion: System Security


Rollout-The Beginning

Initial Pilot Phase- 2003

First Pilot branch on August 29, 2003

with limited functionality

Second Pilot with Trade Finance

functionality on Feb 28, 2004


Rollout-The Journey

Rollout Phase- I (June to Sept.’04)

Controlled Roll-out with limited functionality

Pilot learning application

Roll-out Phase-II (Dec.’04 to Mar.’05)

Accelerated Roll-out

Bank-wide coverage

Enhancements of functionalities

End-March ’05: 1,093 brs.


Rollout-The Journey

Roll-out Phase-III (June – Oct. 05)

Fast-paced & quick ramp-up

Fine-tuned processes

2545 branches covered

Roll-out Phase-IV (Nov 05-Oct 07)

Roll-out under constraints

3769 branches covered over 2 years period


Rollout-Final Phase

Roll-out Phase-V (Nov 07-July 08)

Stabilized and accelerated Implementation

Mechanical rollout stage reached

4571 branches covered in a span of 9 months

Completion of Implementation Phase of SDLC


Rollout

Year wise roll-out

0

500

1000

1500

2000

2500

3000

3500

4000

2003 2004 2005 2006 2007 2008

Year

Bra

nch

es

Year

Branches


Core Banking - Overview• 24 hours banking, 7 days a week

• Anywhere banking

• Integration with delivery channels – ATMs, Internet, Phone & Mobile Banking etc

• Efficiency in operations

• Strengthening MIS / DSS / EIS

• Integration with strategic areas like Trade Finance, Treasury, ALM, Corporate Balance Sheet

• Change in business processes – value addition to Bank and Customers


Core Banking - Overview

• All data would be in the Central Host

• Some data in front-end for validations

(screens, signatures, photographs, EOD balances, journal..…)

• Data flow from / to the branch through SBIConnect

• Most of the system related activities at Host level

• EOD at Host

• Pre EOD validations at the branch

• Off-line processing


Customer Information File

• Global CIF & Accounts

• Intelligence free Customer number & Account number

• 10+1 digits for customer number and Account number (max. 16+1)

• Relationship Links (All Customers need not be Account holders – Introducer, Nominee, Guarantor…)

• Scope for cross selling


Customer Information File

• Relationships

Customer Account-holder

Customer Jt.Account-holder

Customer Guarantor

Customer Partner

Customer NomineeA

CC

OU

NT


Interfaces

• Trade Finance

• ATM Switch/Internet Banking/STEPS

• Reporting & Reconciliation – IOA, DRD, AGCL, RTC, GAD, Elenor

• SWIFT/SFMS

• CMP

• Treasury products / ALM

• Plus other interfaces (Total 36)

• New Product – Telebanking/Call Centre


PROCESS CHANGES

• Core Banking – Not only Computerisation;

aims at changing the way we do business.

• Freeing branches from Back office work

• Branches to be delivery points – marketing

outfits

• Core Banking – enabler of BPR initiatives of

Bank

SBI – CORE BANKING PROJECT


Major Process Changes

• Functionalities of Br. txns. through channels

• Changes in workflow – Day Books, TDR advices, receipts……

• New products – flexi-amount gift cheque, SMS alerts……

• Loan Sanction, Tracking, Debt Collection

• System control over Drawing Power

• Maintenance of many registers in system –nomination, stop payment / loan-related

• NPA – on-line tracking, write-off, probability of default….


Major Process Changes

• Maker-Checker integrated with powers

• Branch Calendar

• Fees & Charges

• Reports – Generation & Distribution –Voucher Verification Reports

• Clearing- Centralised Handling

• Cash / Currency Chest Computerisation

• Self Service Facilities


Core – The new environ Customer

• Anytime, Anywhere Banking

• Multiple Access Channels

• Cost Reduction in transactions with the Bank

• A Single view of all accounts

• Speedy Remittances across the Country

• A One Stop Shop for all his Banking needs

• Entire SBI Group Services & Experiences At his disposal

• In sum, EMPOWERMENT through IMPROVED SERVICE QUALITY


Core – The new environ Branch

• Streamlined work-flow

• Single Window – reduced voucher movement

• Maintenance functions at CDC (Product set-up, interest rate change……)

• Minimal system-related functions

• Reduced paper / register-work

• Rationalisation of reports – fewer reports to check


Core – The new environ Branch

• Modern communication with customers

• Better lay-out and in-Branch facilities

• Reduced Back Office work – SOC - Quality time for marketing / business

• Daily Snapshot of operations

• IN SUM:

BRANCHES WOULD DO LESS AND LESS OF BACK OFFICE WORK AND FOCUS ATTENTION ON

MARKETING & CROSS SELLING


CENTRAL DATA CENTRE

CDC

6 BR 1 4 BR 2 BR 3

SHARED

OPERATIONS

•Inward Clearing

•Outward Clg.

•Personalization

of cheque books

•Print

management

•Despatch

•Customer set-up

•A/c Opening

•Signature Scan

•S.I.

•Bulk payments

Shared Operations Centre


Branch Redesign

• Core sales and service branch • SSB with affluent module

• SSB with SME module • Sales focused outlet

• Mini Branch • Home loans centre


Core – The new environ

Controller• Reduced dependency on branch for data

• Online view of Branch data

• Better Monitoring & control

- control returns/irregularity statements

• ABC analysis of customers segmentation

• MIS for branches – Weekly, P Report…

• In Sum, QUALITATIVE MONITORING AND

EFFECTIVE CONTROL


Core – The new environ Bank• SBI group synergy – cross-selling & market

expansion

• Bank / Group Balance Sheet

• Single view of the Customer

• Pricing / segmentation on the basis of Relationship – value added services

• Rationalisation of fees & charges & customer profitability

• Quicker response to changes in environment

• Funds Management – Bank’s & Customers’

• ALM / Treasury – Risk & Asset Management


Core – The new environ Bank

• Reduced Time-to-market new products

• Reduction in transaction cost

• Reduced reconciliation overhead

• Adoption of International Best Practices

• Compliance with USGAAP

• Standardisation of workflow / Processes –Same Look & Feel

• Organisational Communication

• In Sum, CHANGE THE WAY BUSINESS IS DONE BY LEVERAGING TECHNOLOGY



Taking on Associate Bank for Group Synergy

BPR process changes not factored in at all

Only moderate customisation was thought of

Interfaces expected to be minimal

>>36 Interfaces at present

Cont….

Uniform accounting procedure for all 7 ABs (follow SBI)

Customisation expected to take a year only

Today, more than 60% of the baseline software



Mid course correction in the software based on

Implementation feedback

>>Forced migration holidays

Corrections/ Upgrades incorporated through

release of multiple versions- 1.1,1.105,1.11,1.2

and BPR version.

>>>Technical Migration


Major Customisation

General Module

Safe Deposit Vault/ Safe Custody

NPA Tracking

Focal Point functionality

Currency Chest

Cont…

Remittance

Collection


Simultaneously, after 1st pilot, FOCUS on roll-

out (Volume) with limited functionalities

Deviation from Classical SDLC

Process of CUSTOMISATION CONTINUES

Customisation

Testing and acceptance

Pilot- 50

Roll out mode


Delivery beyond expectations

In-house handling of Implementation

Building skill sets (Migration/Testing/Hand

Holding)

Decentralisation of Implementation-LHO/ZO

CBS Annual Closing-A Great Success

Cont….

What was to be done in more than 5

years has been done in <3 years



Mentoring of branches

Sensitisation of various user groups (Change

Management)

Addressing user comfort areas

Migration fine tuning in-house- Based on

Implementation experience

User Meets / Workshops

Cont….



Documentation

Cont….

User Manual

Job Cards

Implementation Kit

News@Core

Service Desk Knowledge Base Documents



Enabling support mechanism

Cont….

E Learning (SB Gels)

Service Desk

Training Server



Service Desk

Cont….

•Software by CA - Unicenter ServicePlus

•Customisation by L&T Infotech

•Operational since 28.11.2004

•Available on SBI Connect

•Web based application- no installation

•Call resolution on escalation logic

•Escalation based on call severity



Service Desk…..cont

Cont….

•Enhancement of Knowledge base through

documents/announcements

uploaded/displayed in Service Desk

•Communicate with branches regarding

Corporate Centre CBS initiatives/decisions

through announcements



Service Desk…..cont

•Service Desk decentralised at LHO level

•Direct escalation of calls related to CDC/Report and BOG

•Escalation time for other calls- 48 working hours

•Manual escalation possible by LHO (for severe calls)

•Activation of ZO Service Desk once LHO service desk is stabilised

Cont…



Report archival and retrieval system

•Report servers installed at LHOs

•Reports backup decentralised

•CDC reports to route through regional report servers

•Report archival and retrieval made simplified

•Report response time to shorten

Cont….



Adoption of best practices

7799- BS Certification for Data Centre

ITIL Compliance of Service Desk

Security Audit by PALLADION


Overcoming stumbling Blocks

Performance fine-tuning

Transaction flow monitored

Network as well as System connectivity

improved, system processing problem

resolved

Volume processing (trickle feed)

monitored – no failures


Overcoming stumbling Blocks….cont

Generation / splitting / distribution of reports –

monitored daily – no major issues

Separate report servers at LHOs

CRT mechanism put in place

All officials provided intensive training at

SBIICM and 2-day workshops

Circle Managements advised to ensure that

all CRT officials come on board immediately



Service Desk – decentralised and operationalised at

all LHOs

Service Desk resources at Belapur strengthened and

outstanding calls reduced significantly

IOR Dept. in Circles involved in monitoring

reconciliation position at CBS branches.

Dedicated, Circle-specific resource teams formed at

Belapur to lend on-going support



Certain activities like Cash drawer updation

decentralised

GLIF data made available to Circles, Local GLIF

servers installed at LHOs

TPM data entry decentralised

Transfer batch functionality modified, 1260

handling at branch level


Improvements over existing

system

Bankmaster Core Banking

Standalone Centralised

Customers of Branch Customers of Bank

Anywhere Banking

Transaction

Processing Software

Additionally, Supports

MIS / DSS / EIS

Systemic limitations Offers flexibility with

security


Improvements over existing

system

Bankmaster Core Banking

Information flow for

Risk Management is

slow

Efficient Risk

Management

Time-lag in other

delivery channel

transactions

Other delivery channel

transactions – real-time

Transactions within

Branch

Transactions can

transcend branches


WHY CORE BANKING


WHY CORE BANKING

Become a customer-centric bank

Drive intelligent customer interactions

Show a complete view of customers

Deliver multi-channel campaign and offer

management

Provide a single source of truth for customer data

Build market responsiveness by transforming

core banking processes

Provide process-driven solutions

Transform core banking processes

Only integrated front-to-back solution for

consumer finance and commercial lending


WHY CORE BANKING

Manage compliance, risk, and performance more

effectively

Deliver actionable customer and product

profitability insight

Manage credit, market, and operations risk

Provide a foundation for regulatory compliance

Improve operational effectiveness of corporate

assets

Fully utilize employees as key company assets

Reduce operational risk with comprehensive

financial management solutions

Manage projects more efficiently and effectively

Transform corporate procurement


WHY CORE BANKING

Evolve to an agile, intelligent and secure

platform

Deliver new banking services quickly to existing

and acquired customers

Make real-time decisions with know-your-

customer data across all channels

Secure client data against fraud, insider access,

phishing, and identity theft

Selectively consolidate legacy systems onto open-

standards platform


CBS FOR CUSTOMERS


ANYTIME, ANYWHERE BANKING

Customers are not branch customers, but BANK

CUSTOMERS

Interconnected branches; customers can approach

any branch and make transactions

INTEGRATION WITH DELIVERY CHANNELS

Integration with delivery channels like ATM,

INTERNET BANKING, MOBILE BANKING etc

No need to visit a branch to make transactions,

banking now at mouse click anytime, anywhere

Home delivery of banking products

Benefits to Our Customers


INSTANT TRANSFER OF MONEY

Easy and instant transfer of money from one place to

another place at reduced cost

No need to send drafts and face delays

TRANSFER OF ACCOUNTS

Transfer of accounts from one branch to another

branch just in seconds

No need to close account and open a new account at

transferee branch

No waiting time for customers



INTER-GROUP MONEY TRANSFER

Instant transfer of money between SBI and its

associate banks

No need to send drafts

No waiting time for customers

ONLINE DEBIT OF OUTSTATION INSTRUMENTS

Facility to debit customer accounts maintained at

other branches.

No need to send SC/DDP

Flexibility to pay outstation cheques at the branch

itself

Customer need not to wait for instrument realisation



INTER-BANK MONEY TRANSFER

Hassle free and faster Inter-bank money transfer

through NEFT (National Electronic Fund transfer)

No need for customer to send a draft, wait for draft

to be presented in clearing and face delay in

transfer of money

Inter-bank money transfer now possible through

Internet Banking, anytime, anywhere



ONLINE BILLS PAYMENT

No queue for bills payment

Powered by core banking solution, online payment

facility for mobile bills, electricity bills, credit card

bills etc made available

No waiting time for customer, anytime, anywhere

bill payment



GOVT TRANSACTIONS


FASTER RECONCILIATION

Faster funds transfer and reconciliation

CBDT, CBEC, MCA 21 funds settled on T+1 basis

PPF funds handling at centralised level

Smooth transfer of government balances on

September 30 every year

REPORTING

Accurate and timely reporting

Online MIS data in respect of government

transactions

Benefits-Government Transactions


CONVENIENCE IN MAKING TRANSACTIONS

Faster completion of transactions

Flexibility to verify government account credit

based on challan number on NSDL site

Centralised credit of pension

Flexibility to make government transactions (ex:

PPF) through Internet Banking

Benefits-Government Transactions


CBS FOR THE BANK


INTERNAL HOUSE-KEEPING

Easy, faster and auto reconciliation

Easy and error free record maintenance in system,

no need to manually maintain records

Increased focus on customers, less procedural

delays, most of back office work taken over by

system

Hassle free completion of transactions

Reduced transaction cost

Strengthening MIS/DSS/EIS

Tremendous scope for cross selling

Branch redesign

Benefits to Internal Customers


REDUCED REPORTING REQUIREMENTS

Rationalization of reports- fewer reports to check

Auto generation of reports, no need to prepare

reports manually

Large spectrum of reports for branch users

Online reporting to controllers, no need to

manually send reports

HAPPIER AUDIT EXPERIENCE

No need to prepare audit reports at branch level

Time saving for branch staff, increased focus on

critical areas

Generation of all audit reports online in one go

Redesigned and simplified audit procedures



CENTRALISED PROCESSING

Deposit/ Loan accounts

Riding on the power of core banking platform, the

concept of centralized processing of deposit/ loan

accounts introduced

Dedicated cells (LCPC/RACPC) opened at various

centres to process deposit/ loan accounts of all

branches

Branch users are now free from back office

processing resulting in increased focus on customer

service



CENTRALISED PROCESSING

Local/ Outstation Instruments

Using core banking platform, the concept of

centralized processing of local/ outstation

instruments introduced

Dedicated cells (CCPC) opened at various centres

to process local/ outstation instruments of all

branches centrally

Tremendous time saving for branch users

resulting in increased focus on customer service



OTHER BPR INITIATIVES ROLLED OUT

Based on CBS platform

Centralised pension processing

Centralised handling of bad debt

Centralised dedicated cells for Mid Corporate Loan

administration, Small & Medium enterprises, Trade

Finance etc



BUSINESS CONTINUITY

Flexibility to switch over to some other branch in

case of system problems thereby reducing

inconvenience to customer

Facility to switch to offline mode in case

connectivity is disrupted



Core Banking Project of the Year by

Banker Magazine (London) for 2007.

Overall Retail Technology Project of

the Year by Banker Magazine for 2007.

Accolades

Apart from a number of awards won by

various wings of the project, two most

satisfying awards won by the project were

awarded by The Banker’s Magazine of

Financial Times Group, London.

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