state bank of india case study - edgeverve bank of india ... provides retail banking, wholesale...
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ProfileState Bank of India (SBI) is an Indian largest public sector multinational banking and financial services institution with a strong global presence of 190 offices in 36 countries and 385 Correspondent Banks in 110 countries. SBI’s International Banking Group (IBG) provides a range of services to Indian and foreign companies as well as non-resident Indians (NRIs) through its overseas branches and subsidiaries. IBG provides Retail Banking, Wholesale Banking, Global Trade & Treasury Services and Innovative Payment Solutions to the NRI diaspora.
IBG has reworked its strategy for its global operations to improve effectiveness and contribution to the bottom line. The aim is to increase the share of global business in net profit to 25 percent and to explore secure lending options in overseas markets.
Renewing the Core to Power Global Expansion
CASE STUDY
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Key Business Drivers
SBI operates in some of the toughest
regulatory markets in the world including
the US, UK and Singapore, to name a
few. Over the years, multiple tactical
changes have been made to the core
banking systems at the level of individual
markets in order to account for localized
business requirements. This has led to
a situation wherein many core banking
systems in the bank’s foreign offices have
evolved distinctly to become unique
to that market. This presents a huge
challenge when implementing common
regulatory requirements like FATCA, Dodd
Frank, CRS etc., or even when rolling out
universal business change requirements.
Apart from inflating the time and cost of
implementation, the need to make unique
changes to core banking systems in each
market also makes it extremely difficult to
manage a unique source codebase for
each market.
Transformation Objectives
The core banking transformation would
allow SBI to leverage the powerful
functions of Finacle’s latest version,
including but not limited to, round-
the-clock functioning of multi-country
branches, regional/global processing hubs
and delivery channels, in uninterrupted
online mode. The process automation
capabilities of Finacle v10 would also
eliminate the need for batch processing
windows as well as the need to shut
down during end of day/ day beginning
operations.
Above and beyond this, the transformation
would modernize branch client
applications, to offer a rich interactive
experience for tellers or customer
service agents. Upon completion of the
transformation, SBI would have a unified
view of its international business and
be able to deliver a unified customer
Overview
IBG embarked on a Core Banking
Transformation project 18 months ago
to upgrade all countries to the latest
codebase of Finacle v10.
The IT foreign offices team, a strategic
IBG partner, aligned with the bank’s
digital transformation journey, and
collaborated with Infosys Finacle on
a major exercise to migrate from the
existing core banking version 7.6.1
to the next generation 10.2.13. This
complex project involved aligning all
existing products and customization
with the new version, upgrading the
database to make it compatible with
Finacle 10.2.13 and training branch
users on the new application.
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experience globally. It would also have the
agility and flexibility to quickly deliver new
and innovative products and services to
international customers.
Most importantly, SBI’s IT foreign offices
team and Infosys Finacle team looked
to complete the transformation exercise
across 24 countries within a in a stringent
deadline.
Implementation Highlights
In collaboration with Infosys Finacle, SBI’s
IT foreign offices team, was able to roll out
the upgrade from Finacle v7 to Finacle v10
across 24 countries in just 24 months.
Using the incremental development
principle of Agile delivery, the bank and
Infosys Finacle team was able to break
down the project’s overall delivery
requirements into sets of work items that
would be completed in 30-day sprint
cycles. This approach allowed them to
accelerate business value by releasing
Finacle features in phases, sprint after
sprint, until the entire set of features or
GAPs had been implemented as planned.
This also enabled phased acclimatization
of end users to the new system and
gave them the opportunity to provide
feedback that could be incorporated into
subsequent sprints. The agile delivery
model helped to monitor progress more
accurately by measuring the number of
package features that have been delivered
at any given time. It also greatly reduced
project risk, enabled tighter cost control
and accelerated the time to ROI for the
bank.
A stringent migration strategy was used to
manage each phase of the transformation
including creation of the base version
and localization for each country, User
Acceptance Testing (UAT) completion,
training, simulation runs and go-live. In the
first phase, SBI team worked with Infosys
Finacle team to create a base product
version that included 533 customizations,
147 reports and common interfaces like
Internet Banking, Treasury, SMS and OFAC-
AML Solution. All country-specific localized
versions would sit on top of this common
base version. A data migration tool was
also created to upgrade the database to
Finacle 10.x and ensure cross compatibility
of Finacle products.
The migration window was kept to the
bare minimum to ensure that business
operations were not disrupted for too long.
In order to reduce cutover duration, the
migration of static data was also completed
prior to the actual migration. By adopting
a regimented approach to UAT, all issues
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were fixed before the actual simulation,
which also helped achieve uniformity
across UAT, simulation and production
environments. Before “go-live”, historical
transactions were simulated and reports
were generated based on actual entries by
branch users.
As part of the transformation mandate,
existing multi-country Treasury Operations
were also consolidated across countries to
the India-based Global Operations Center
(GOC) by providing front office and middle
office applications to GOC.
Business Benefits
Following the platform modernization, SBI
is now empowered to support over half a
million customers in 24 countries and 170
branches. A lean and scalable architecture
allows the entire setup to be managed out
of a centralized data center in Mumbai.
To optimize utilization, efficiency and
maintenance of hardware resources, the
entire setup is hosted out of five HP Unix
Itanium boxes each divided into five virtual
partitions hosting one country. The system
has an active passive failover system, apart
from a disaster recovery site in India. With a
single unified system, SBI can now manage
its operations 24X7 across 5 continents.
The architecture supports an unlimited
number of interfaces and third party
integrations. Almost all data extracts
and reporting requirements have been
met directly through the product. The
system also integrates with more than 50
interfaces through its proprietary tools
/ services called Connect24 and Finacle
Integrator thus eliminating any third party
dependencies for interfacing with the
product. The application can feed data to
a host of regulatory portals and third party
tools through a set of automated jobs and
extracts.
The new Finacle environment also supports
more scalable high-availability applications
with a host of new functionalities that
enable the bank to adapt quickly to
changing banking requirements across the
globe. The highly customizable framework
has reduced the time-to-market for new
products from 3-6 months to less than
30 days. Total cost of ownership is also
significantly lower on account of low
maintenance costs and the extremely agile
customization framework.
Going Forward
The SBI core banking transformation
project is one of the most complex
and geographically diverse Finacle
implementations in the world. This
multi-country project yielded many
valuable insights that will help further
streamline our approach to migration and
transformation.
In the next stage of the project, we
are collaborating with SBI and IBG to
implement a unified multi-country, multi-
tenant trade finance platform as well
as roll out a secure lending platform. A
Command Center incorporating state-
of-the-art technologies that will allow
24X7 monitoring capabilities is already
being implemented. Infrastructure
transformation is also a huge priority, with
the emphasis being on building stability,
resilience and 99.99% availability to meet
the toughest international regulatory
requirements in the world.
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Client Testimonial
Shiv Kumar Bhasin, Chief Technology Officer at State Bank of India Group, State Bank of India:
“This transformation will enable us to pursue new and innovative strategies to realize our ambitious goal of becoming the leading
global bank from India to serve Indian and international customers. The first phase of platform modernization empowers us to
support over half a million customers across 24 countries and takes us a step closer to increasing the share of profits from our global
operations. Going forward, we will focus on fulfilling the Trade and Payments needs of global businesses.”
In recognition of the best practices involved in the project, State Bank of India and Infosys Finacle won the ‘Best Core Banking Implementation Project - Multi-Country’ at The Asian Banker Technology Innovation Awards
www.finacle.comFor more information, contact [email protected]
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