ICICI Bank undertook a business process re-engineering initiative to centralize its applications and data in order to enable nationwide banking services. It transitioned from a branch-centric model to a centralized system using a hub and spoke network architecture implemented with partners like Infosys, Bill Desk, and SAS. This allowed ICICI Bank to increase its transaction volumes five-fold while reducing branch transactions to only 25% of all transactions.
2. ICICI:AN OVER VIEW
• ICICI Bank (formerly Industrial Credit and Investment Corporation of India)
is a major banking and financial services organization in India.
• It is the 4th largest bank in India and the largest private sector bank in
India by market capitalization. The bank also has a network of
1,700+branches (as on 31 March 2010) and about 4,721 ATMs in India and
presence in 19 countries, as well as some 24 million customers (at the end
of July 2007).
• ICICI Bank offers a wide range of banking products and financial services
to corporate and retail customers through a variety of delivery channels
and specialization subsidiaries and affiliates in the areas of investment
banking, life and non-life insurance, venture capital and asset
management etc
3. Reasons for BPR Initiative:
• In year 2000 and later when anytime, anywhere banking came to our
country, ICICI Bank had to move away from the branch-centric model and
make its services available nationwide. The solution was to centralize its
applications.
• Legacy systems: The traditional systems at ICICI Bank were very centric to
the branch. For example a server at New Delhi was specific to the branch
in that city; the ATMs were standalone catering only to the city branch.
The banking transactions were thus limited to the respective branch
offices as customer data was not available in other branches. This made
banking a limited service and very branch specific.
• ICICI realized the importance of offering nationwide banking but this
would be possible only by having a centralized data repository.
4. Teams Involved
• Infosys is one of technology partner for ICICI Bank which game the
assistance to implement Finacle for handling all the banking activities
• Bill Desk for online payments
• SYBASE: Sybase, an SAP company
• SAS for business analytics software and services.
5. Project Design
• The basic network was set up for providing the e-mail facility, but none of
the applications were linked to the network. With growing business and
rapidly increasing accounts, the company found it extremely difficult to
administer and manage the system.
• The centralization procedure started around late 1999. ICICI InfoTech (a
company promoted by ICICI) made the first network design for the group in
1999—it was a hub and spoke architecture
• Centralizing the operations was not the solution, but centralization of data
was. here problem ICICI Bank faced with the legacy systems was that they
were stand-alone systems and the data from one branch was not available
with another branch. These problems led us to the new design of the
hub and spoke architecture.
6. The Solution
• The ICICI InfoTech team designed the initial network topology in 1999. The
team had put forward a series of designs, not radically different from each
other. Eventually, a design with a mix of VSATs, leased-lines, radio-links
and ISDN was selected. A mixed design was selected because of the
disparate locations of the group across the country.
• The network follows a hub and spoke architecture—a mix of VSATs, leased
lines, ISDN and radio links. It has around 800 leased lines, about 600
VSATs, approximately 800 ISDN lines and multiple 34 Mbps lines.
• The most important aspect to setting up a network was to have a good
relation between the technology consultant (network integrator),
the vendor and the client.
7. • There is a primary site from where spokes go out to the regional branches
and the other offices. The secondary site has the disaster recovery system
• High-end Cisco routers and switches have been deployed for connectivity.
The network is monitored using HP OpenView and CiscoWorks. Over 30
portals are operating using a highly secure state-of-the-art security
architecture, which consist of firewalls, intrusion detection systems, virus
protection and various other tools.
• Hardware at both these sites varies from low-end NT servers to the high-
end SUN E 10K along with 12 terabytes of data storage at each end
connected through a Storage Area Network
• Unix is the preferred OS for most of the hardware while most of the
databases use Oracle with a few on Sybase and MS SQL.
• With the ICICI group having several companies under its umbrella,Finacle
needed to seamlessly integrate with multiple applications such as credit
cards, mutualfunds, brokerage, call center and data warehousing systems.
8. • The scalable and open systems based architecture, enabled Finacle to
successfully manage the increase in transaction levels from 400,000
transactions a day in 2000 to nearly 2.1 million by 2005 with an associated
growth in peak volumes by 5.5times.
• With Finacle, the bank currently has the ability to process 0.27 million
cheques per day and manage 7000 concurrent users. Over the years, the
strategic partnership between ICICI Bank and Infosys that started in 1994
has grown stronger and the close collaboration has resulted in many
innovations. For instance, in1997, it was the first bank in India to offer
Internet banking with Finacle’s e-banking solution.
• Currently, only 25 per cent of all transactions take place through branches
and 75 per cent through other delivery channels. This reduction in routine
transactions through the branch has enabled ICICI Bank to aggressively
use its branch network as customer acquisition units. On an average, ICICI
Bank adds 300,000 customers a month, which is among the highest in the
world.
9. Supporting Tools & Techniques
• Finacle – a core banking and universal banking solution from Infosys
• The network follows a hub and spoke architecture—a mix of VSATs (Very
small aperture terminal) , leased lines, ISDN and radio links. It has around
800 leased lines, about 600 VSATs, approximately 800 ISDN lines and
multiple 34 Mbps lines.
• UNIX is the preferred OS for most of the hardware while most of the
databases use Oracle with a few on Sybase and MS SQL
10. CONCLUSION
• ICICI Bank has grown immensely over a period of time with it through
business process re-engineering to a company of net worth Rs 3,000
crore.
