An argument for Bi modal and Develops

There has always been a fine balance between doing things with stability, availability, reliability, scalability and securely, and doing things fast and innovatively. This balancing act has been massively amplified by the increasing digitization of banking products and services, says Shiv Kumar Bhasin, CTO,

State Bank of India.

He points out in this regard to Bimodal IT, which is the practice of managing two separate, coherent modes of IT delivery – mode one focused on traditional waterfall model of delivery and the other mode on agile and continuous delivery. The Bimodal concept is deeply entwined with the DevOps and agile development philosophies revolutionizing IT. He says business change requirements for Core Banking Systems, Product Processor Platforms, Business Support Services Systems – Origination, Collections, Treasury, Risk and Compliance Systems etc – could use mode 1. However, in order to keep this layer of systems sufficiently agile, it is necessary to publish Standard API layer of services on top of these systems so that agility needs of channel services layer do not get impacted.


In order to ensure sufficient agility and collaboration (B2B, B2C), the channel services of banks need to adhere to mode 2 using Agile/Scrum methodologies and implementation of DevOps toolsets to meet the increasing digitization requirements of the bank, says he. According to him, the software development and infrastructure operations teams that work on the massive channel applications – mobile banking, internet banking, and ATM and contact center – serving the 482 million accounts of State Bank of India had a traditional environment. These teams with traditional heavy weight lifting processes for taking the code from development to production environments used to take few days to several weeks. In earlier days, business needs were met adhering to such manual, monolithic, heavy weight processes. But, in the fast changing world where customers would be accessing applications from different kinds of browsers (which have several releases in a year), different mobile OS/ browsers (again which have very agile release plans across a calendar year), the engineering teams have to face nightmares in certifying their developments across diverse set of ever changing browsers and OS environments. Customer delight requires all of these to be supported.


However, he is of the view that the silos among Software Delivery Life Cycle stages – requirements analysis, development and testing
– are diminishing due to adoption of agile development methodologies. Continuous delivery has blurred the silos by implementing Continuous Build and Continuous Integration, which has also streamlined requirements, development, code quality and building interfaces with subsystems/peripheral systems. Continuous delivery is nothing but deployment pipeline – end-to-end automation of the build, deploy, test, and release processes and these have had a number of knock-on effects, bringing some unexpected benefits. Automation results into usage of tools for DevOps across SDLC stages, eg Chef, Jenkins etc.


He maintains that the primary characteristic of DevOps culture is increased collaboration between the roles of development and operations. There are some important cultural shifts, within teams and at an organizational level, that support this collaboration.

Again, an attitude of shared responsibility is an aspect of DevOps culture that encourages closer collaboration, says he, adding it is easy for a development team to become disinterested in the operation and maintenance of a system if it is handed over to another team to look after.

One effect of a shift towards DevOps culture is that it becomes easier to put a new code in production. Bhasisn says this necessitates some further cultural changes. In order to ensure that changes in production are sound, the team needs to value building quality into the development process. This includes cross-functional concerns such as performance and security.


Automation is a cornerstone of the DevOps movement and it facilitates collaboration, Bhasin adds. Automating tasks such as testing, configuration and deployment frees people to focus on other valuable activities and reduces the chance of human error. Automation helps to get end to end processes documented and entire food chain of organization aware of the e2e processes. It brings lateral thinking to make these processes sufficiently nimble and agile. So DevOps is win-win for meeting time to market.

According to him, for making Bimodal and DevOps a realty, few key organizational changes are needed (i) Set-up of services group to develop API layer around core banking product processors, (ii) Merging digital channels development and infrastructure teams so that automated tools deployment across the teams will be supervised single handedly and increased collaboration, cohesiveness could be achieved for success of DevOps.


We will provide debit /ATM card along with the welcome kit. In the existing scheme of things, the bank had to dispatch the PIN by courier/post to activate this card. Now, we propose to send the PIN over SBI Quick app. The customer would be required to download the app and send a missed call or SMS and in response we will despatch a one­time PIN to his mobile, with which he can activate the card. The delay is eliminated, the use of paper is eliminated and the whole process of despatching the PIN through snailmail is eliminated. In the past, it would take at least one week for a debit card or ATM card to get activated, but with green banking, it can be done the moment a person becomes a customer of the bank& receives Debit/ATM card,” says he.


Bhasin says the bank is planning to invest heavily on virtualization technologies for desktop client and server side. For better management of applications at branches and optimizing the bandwidth utilization by rich client applications, desktop virtualization technologies are being explored.The bank’s server side virtualization-based private cloud is called ‘Meghdoot’. The bank is leveraging cloud technologies for variety of financial applications ranging from non-critical system for business support services to loan origination systems, front office application of kiosk banking, which is used by 60,000 Customer Service Points (CSP), as well as SBI flagship wallet – Buddy. The bank is also exploring ways to leverage elasticity of public clouds for

test environments of various financial applications, communication solutions, CRM and other IT for IT support systems.


The bank has over the years built its entire technology infrastructure highly stable and robust. It has recently set up a hotsite for Core Banking System (CBS) to bring down the recovery time objective (RTO) to less than an hour, in the event of any CBS outage at the primary site. “As you know the implementation of BaNCS in the bank and the associate banks constitutes the largest centralized core system implementaion ever undertaken in the world. Today, there is network latency between the primary site and the DR sites for data replication. We have been able to reduce the recovery point objective (RPO) to near zero. There is virtually no data loss. Hot site is almost realtime replication of the CBS data. The network is so efficient between two sites that the network latency is less than 10 milliseconds. The hot site is like our production site and there is automatic failover in case of any glitches in production site. The maximum downtime for a switchover to hot site has now been reduced to 40 minutes with no data loss from 4 hours earlier to switch to DR. The downtime in case we have to switch to the DR site is 2 hours with virtually no data loss. The RPO as I said is zero,” says Bhasin. To have a better management of data center services, stability and robustness, the bank is envisioning to consolidate co-location data centers.


The bank periodically undertakes DR drills for failsafe/redundancy checks of its CBS and channel applications and infrastructure – the mobile/internet banking, ATMs/POS and contact center. Bhasin says earlier, the ATM down time used to be around 2.5 hours in the event of switch over to DR, which has now been successfully brought down to less than an hour. “We are working on to highly available internet/mobile banking architecture, which will have minimum
or no down time for these applications. Quarterly and half-yearly DR drills are performed for individual applications and entire data center. For channels like internet banking and ATMs, even one- hour outage can be quite bothersome for the customers and the bank is making initiatives to bring down the outage time in the event of switchover to DR and to minimize the impact,” says Bhasin.

“Mind you, we have some 2.5 crore internet banking customers and some 5 lakh log-ins are made in one hour on an average. The SBI internet banking site can well be described as Google of India in terms of number of log-ins. In these circumstances, it is imperative that we have a good response time too in order not to inconvenience the customers. We have been able to bring this down internet banking response time of transactions from an earlier 10-12 seconds to 5-7 seconds,” he elaborates.

Bhasin says in order to make the ATM channel efficient and productive, the bank is making investments in a domain name server (DNS) system. “With this, we hope to have complete control of the channel. We are able to remotely monitor the ATM availability status, set alerts, review transaction history and mitigate risks. The system becomes extremely complex when you have to manage 55,000 ATMs across the country with some 2000-3000 more planned to be added annually. It is our aim to have nil downtime for channel applications” says Bhasin.


Bank’s technology vision is to serve digital India with innovative digital services



The bank has digitized services for customers to facilitate P2P fund transfer, which ensures fund transfer through a very simple yet secured process. State Bank mCASH is a simple and quick way to claim funds sent by State Bank of India customers through internet banking or State Bank Anywhere mobile application based on just mobile number or email id.

The bank has also entered the mobile wallet space with SBI Buddy. “The wallet is available to our customers as well as those who are not. It can be used to send money to new and registered customers, book movie tickets, flights, hotels as well as do shopping. It has features like reminders to settle dues, recharge and pay bills instantly. It is available in 13 languages. At present, we have 2 lakh customer base for the wallet and our target is to touch one million shortly. We intend to position ourselves in the market place as an integrator and hope to tie up with e-commerce firms so that we can be an effective channel for bill payments,” says Bhasin.

Another wallet initiative in this direction is the tie-up envisaged with BSNL to launch a mobile wallet, which will allow customers to withdraw money through State Bank ATMs.


One significant aspect of the digital endeavours of the bank is that it has strengthened its internet banking. “OnlineSBI is our internet banking portal,” says Bhasin, adding, “which provides anywhere, anytime, online access to accounts for our retail and corporate customers. The application is developed using the latest cutting edge technology and best security frameworks and tools.”


For corporate banking, the bank provides three transaction banking products – Saral

Shiv Kumar Bhasin outlines the various digital initiatives of the bank, which will propel it into the nextgen

for single users, Vyapaar for multiple users with transaction limit upto =t50 lakh per transaction and Vistaar for multiple users with transaction limit upto ?500 crore per transaction. In addition, there are two enquiry products – Khata for single users and Khata Plus for multiple users for large corporates. These products offer the corporate customers the privilege oftransacting anywhere anytime and using any device.

“This has indeed resulted in a lot of advantages and conveniences to corporate customers in managing their finances and delegating authority to concerned officers without geographical constraints using desktop based Corporate Internet Banking,” says Bhasin.

The bank is now launching corporate mobile banking with Saral, Vypaar and Vistaar as smartphone applications. This is one of the key digital transformations to migrate customers to mobile channel.


While undertaking the digitization efforts, the bank is not overlooking the security aspects. It proposes to launch applications to make internet banking not only secure but convenient and simple to transact. One of the irksome factors in internet banking today, according to Bhasin, is the OTP – as part of the two-factor authentication procedure mandatorily required. “There can be many misses here – there can be a telecom network delay/failures in sending the OTP to the customer. This complication further aggravates for smartphone customers who carry out netbanking on mobile phone, which impacts the success of the internet-based transaction. We are intending to provide to our customers the capability to fetch the OTP in realtime using smartphone OTP app. There will be a security check based on the transaction details and once through, the OTP will be available on the phone via internet. Alternatively, we can also provide security algorithm based soft token app where the OTP would be generated by customer on his mobile. This means there is no dependency on telecom networks or internet connection on phone,” he explains.

There could be communication problems as a result of which an OTP cannot be either sent or fetched – example is states like Jammu and Kashmir as well as some border areas. “This Smartphone application based soft token can be used to generate the OTP rather than waiting for SMS based OTP. A customer would have the choice to use the appropriate security mechanism. It will ensure success of internet banking transaction and availability anytime, anywhere,” says Bhasin.


The bank has launched registration and password reset for internet banking as self services. A customer could subscribe to internet banking from the comfort of his home/office, which makes the internet banking true anytime, anywhere banking services. Similarly, if a customer forgets his password, he/she could reset it using self service anytime/anywhere. This transforms the business process where paper-based onetime user-id and password for internet banking credentials were provided to the customers from branches. The customer does not need to visit the branch for resetting his password.

Another application is what Bhasin describes as digital green PIN.

State Bank of India is a behemoth

So, any internal changes in the bank too would have enormous implications. For example, the digitization effort in the bank. CTO of the bank Shiv Kumar Bhasin outlines the effort:



here is a massive digital transformation that is happening in State Bank of India, chiefly to be in concert with the Digital India initiative, which the government is driving. An array of products and services will in the near future make the bank a pioneer in digital transactions and mobile device- enabled banking.

“In this transformation, our thrust is on three core areas – Mobility, Self-service and Ensuring availability and robustness of services. We believe mobile is going to be at the center of the transformation and this will help us strengthen our proposition,” says Shiv Kumar Bhasin, CTO, of the bank, who has been tasked with hastening this transformation.


“Being a public sector bank has in no way impacted our efforts to take up digitization in a big way,” says Bhasin. “I can quote two major initiatives in the mobility
applications realm – State Bank Anywhere and State Bank Freedom. State Bank Anywhere is our retail internet banking application offered on mobile. A customer can do a whole lot of financial transactions – balance enquiry, funds transfer, credit card payments, RTGS funds transfer, bill payments, mCash (mobile to mobile funds transfer), instant term deposits, mobile top-up etc, while they can also do non- financial transactions like m-Passbook, ATM cum debit card hot listing and cheque book request. This service is available on SmartPhones.

“Similarly, State Bank Freedom is the branch on your mobile – you can make balance enquiries, do remittances and make bill payments, mobile top-ups, DTH recharge etc. The service is available on feature phones supporting multi-protocol application clients eg Java application, client app with encrypted SMS, SMS banking client and USSD Client.”

Bhasin says these two apps have
been quite successful and have earned the bank quite a bit of appreciation from its customers.

Another aspect that has indeed helped the bank in improving its customer service is SMS Banking and Missed Call Banking. SBI Quick – Missed Call Banking is a service which involves banking by giving a missed call or sending an SMS with pre-defined keywords to a customer’s registered mobile number. Once SBI Quick is downloaded, the customer need not have to remember the various keywords and destination mobile numbers.

“SBI Quick has been appreciated more by our rural customers than those in urban areas mainly because SMS/Missed Call for these customers is a sure shot way of making sure that a transaction has indeed taken place. Besides, through SMS Banking customers can get services such as enquiry of balance in the account, mini statement, mobile to mobile money transfer through IMPS, mobile top-up and DTH top-up/

recharge. Once installed, an internet connection is not needed to use the app as the communication would happen over SMS or Missed Call,” adds Bhasin.

Benefit of being in DIFC


Indian banks have a marked presence in the Dubai International Financial Centre and this will in the long run prove to be beneficial to them, says Arif Amiri, deputy CEO of DIFC:

DIFC allows Indian firms 100% ownership, guaranteed 0% tax on income or profits for 50 years, free flow of capital and profit repatriation and no exchange controls, he explains further.ndian firms setting up their offices in the Dubai International Financial Centre (DIFC) are crucial to the federal financial free zone, says Arif Amiri, deputy CEO of DIFC authority. Amiri, who recently led a high-level DIFC delegation to India, says with 20 companies represented, India has the largest presence at DIFC after the United States and the United Kingdom. “India also has the most banks – State Bank of India, Bank of Baroda, Bank of India, IDBI Bank, Axis Bank, ICICI Bank and HDFC Bank. Besides, several Indian financial services firms – Aditya Birla Sun Life Asset Management, IL&FS Global Financial Services, IIFL Private Wealth Management and Kotak Mahindra Financial Services – are also based at DIFC and these firms have benefitted from the Centre’s fixed-income portfolios, as well as rental yields on real estate holdings, an asset class favoured by the majority of Indian investors,” says Amiri.

Amiri maintains that the UAE and India had recently pledged to increase bilateral trade by 60% over the next five years, so the potential for Indian firms is enormous. “As part of our long-term growth strategy, we aim to host a total of 100 Indian firms by 2024. During our recent visit to Mumbai, we conducted 40 meetings with government authorities, private and public sector banks, law firms, wealth and fund management experts, insurance and reinsurance firms, and our existing clients. We also held discussions with 10 banks interested to set up operations at DIFC. A major Indian private


Arif Amiri points out that DIFC hosts 21 of the world’s top 25 banks, and 11 of the world’s top 20 money managers

sector insurance company has also shown an interest to establish a base at DIFC; it would be the first international private sector insurance company to expand out of India,” he adds.


He explains that as a diverse commercial hub, DIFC can help Indian financial and non-financial institutions to fully realize their growth potential. With 382 financial services firms and 750 non-financial services firms having established their presence, DIFC has attracted leading organizations from a variety of sectors, including wealth management, asset and fund management, and property. It offers 0% tax, 100% foreign ownership and no restriction on capital repatriation. It also offers an independent judicial system based
on English common law and a transparent regulatory environment inspired by leading international reporting regimes.

Amiri says DIFC has signed MoUs with more than 75 jurisdictions around the world, offering businesses the flexibility to model their corporate structure, opening a representative office, for example, or in some cases operating with a full banking licence. “With the ever increasing global connectivity of Dubai, DIFC is positioned as a gateway for Indian business to access the wider Middle East, Africa & South Asia (MEASA) region, representing a combined GDP of $7-9 trillion,” says he about the potential of the Centre.


Amiri says DIFC’s regulatory framework, overseen by an independent risk-based body – the Dubai Financial Services Authority (DFSA) – offers a secure environment for banks to grow in sectors such as commercial banking, investment banking, trade and export finance, project and infrastructure funding, treasury services and correspondent banking. Its regulatory regime supports region-wide banking services – including securitization and asset-backed financing – without imposing multi-jurisdictional risks or regional restrictions on foreign financial institutions.

“The DFSA aspires to offer licensing standards that match or exceed those of competing international financial centres. Foreign financial institutions can choose from five distinct licence categories, allowing them to receive deposits, provide credit, conduct asset management, or operate a collective investment fund. The breadth of options helps banks to expand their reach locally and regionally. Although licence approval depends on the scale and complexity of the business concerned,



issuing licences generally takes between 50 and 90 days. The DFSA has a strong relationship with India’s Reserve Bank and Securities and Exchange Board of India, which has helped the integration of Indian firms into DIFC and improved the efficiency of application and approval procedures. Full hanking licences have been issued to more banks from India, a total of eight, than to any other country,” says Amiri.


Dubai’s position as a global trading hub is, of course, a key advantage, explains Amiri. “Its air and seaports connect with more than 280 destinations around the world and the city’s integration with the global economy is improving all the time, with ongoing investment in transport links and infrastructure. Given the close proximity of India and the UAE, Indian firms are in an ideal position to access trade flows in the MEASAregion via Dubai and the increasing economy activity within MENA itself, which is widely expected to more than double over the next decade,” he adds.

He also points out that DIFC is a secure location for wealth and asset management firms to access trade and investment networks in emerging markets, private equity and Islamic funds, adding there is the vibrant business cluster itself that makes up DIFC: 1,327 active registered firms and a combined workforce of18,250.

“DIFC,” he says, “hosts 21 of the world’s top 25 banks, 11 of the world’s top 20 money managers, seven of the 10 largest insurance companies, and nine of the top 10 law firms.”


What is unique about DIFC’s legal framework?

“As an independent free zone, DIFC enjoys judicial independence, offering businesses the protection of English Common law, and issues judgements enforceable across the Arab world through the DIFC courts,” says Amiri. “In addition, with the creation of the Wills & Probate Registry in 2015, DIFC has become the first jurisdiction in the Middle East to
allow non-Muslims to register a will under English Common Law Principles.

DIFC’s regulatory and judicial environment is benchmarked against international standards and meets or exceeds the safeguards in place at other leading international financial centers, such as New York and London. The DFSA grants licences and regulates business activity, while our corporate governance body, Hawkamah, monitors ethics and standards. Both these institutions help to minimize legal and corporate risk.

At the same time, the DFSA and the Emirates Securities and Commodities Authority (ESCA) are working closely to increase operational efficiency, facilitating the ‘passporting’ of funds into the DIFC. For example, DFSA has amended its Collective Investment Fund Law to implement a new class of fund called the Qualified Investor Fund (QIF), streamlining the fund registration process and reducing costs.


Amiri recounts some of the unique experiences of financial services institutions setting up their units in DIFC.

“One example is Gulf Petrochem, which recently launched India’s first real estate fund under DIFC’s Exempt Fund regime, a fund that provides professional inevestors with ready access to a diversified portfolio of ‘Grade A’ real estate assets. Another is BankMed, one of Lebanon’s fastest growing banks, the first MENA-based financial institution to receive a Category-1 licence when it opened at DIFC. Similarly, Bae, Kim & Lee (BKL) and BDO Unibank became the first Korean law firm and the first Philippine bank, respectively, to set up at DIFC when they opened offices with us earlier this year. ”


He says as part of the Centre’s 10-year growth strategy, it plans to allocate more resources to emerging markets such as India and China, complementing its existing relationships with developed economies in the West. The objective,
according to him, is to strengthen its position as a bridge between the East and West and to stimulate trade and investment flows in the South-South economic corridor, a geographical region encompassing MEASA, southern Africa and Latin America.

“Family business and SMEs in particular will be a major focus for us, representing as they do around 80% of companies in the Middle East and $500 billion in value terms. We are eager to play a full part in the UAE’s success story and to establish itself as one of the world’s foremost financial centers, increasing the financial services sector’s share of UAE GDP to 18% from around 12% today. In addition, we are also playing a major role in Dubai’s ‘Smart City’ initiative and are continuously working towards developing an integrated DIFC Client Portal, for example, and introducing smart-phone applications, such as one to help track client applications,” says Amiri.

The soon to be launched Client Portal will offer a range of administrative services including online payments, registration and licensing, certification, an option to amend company profiles and various employee services such as visa applications. This will reduce the amount of client time spent on administration by nearly 80%.

DIFC has also extended wi-fi access to its residents, tenants and visitors, and it has consolidated its digital services into a single, self-contained network to offer more cost-effective solutions for the trading desks of financial firms.

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