Previously, bank branches were not networked, and all accounts were operated through home branches manually. There were strong objections to computerisation from the bank unions which feared unemployment of the huge clerical work force if computers were used. Slowly, the unions allowed automatic ledger machines (ALMs). Since the 1990s, the government promoted computerization.
Software firms developed the technology of Core Banking System (CBS) to process daily banking transactions and enabled updates to accounts and other financial records. CBS networks different branches of a bank. This networking enables customers to avail of banking services from any branch in any place without hassles. These banking systems were first developed in the US in the 1970s. Over a period of time, their sophistication has improved.
India has a thriving banking industry with a mix of banks — public sector banks (PSBs), private banks, and foreign banks. In addition there is a network of co-operative banks. These banks in India are spread across the length and breadth of the country.
Indian software developers of the CBS products had clientele abroad and they were exposed to excellent global products and services. In India, they developed three core banking products over a quarter of a century. They are the mainstream CBS products today.
Infosy’s subsidary EdgeVerve Systems, developed the banking software Finacle in 2000. In those days, most of the transactions happened in branches. Today most of the transactions happen in non-branch channels.
Finacle solutions address core banking, lending, digital engagement, payments, cash management, treasury analytics, AI and blockchain. Banks in over 100 countries rely on Finacle.
Tata Consultancy Services (TCS) developed BaNCS. It services more than 30 per cent of the global population. Two of the world’s largest CBS run on BaNCS processing 1 billion accounts. Its largest implementation was through the State Bank of India. BanNCS also includes an analytical engine. It also embeds AI techniques.
Oracle Financial Services Software too originated in India. It acquired iflex solutions in 2006. It now sells Flexcube. AirTel uses Flexcube to launch its digital payment bank in India and Nigeria. It has roped in millions of customers for AirTel. Customers can open deposit accounts in minutes. Oracle serves over 700 customers in 140 countries, and covers 15 per cent of global population.