For N.R.K. Raman, the new CEO and MD of i-Flex, IT begins at home. In its stated mission to help financial institutions worldwide excel, i-Flex gives customers access to its own internal solutions. This reflects a culture where everyone is invited to contribute — as a result, the IT organization in i-Flex isn’t used to warming the benches. At every quarter’s business review, IT is called up to review the enterprise’s automation processes and how they impact business. Since it’s acquisition by Oracle in August 2005, i-Flex has been geared for change. Raman tells CIO India about how the financial services provider is leading Oracle into core banking solutions.
You’ve spent 22 years with i-Flex. What was the turning point in terms of IT usage at i-Flex?
There have been several high points in the past 20 odd years when we have used IT innovatively. In 1994-95, we pioneered the use of IT in CMM level 4 certifications. In fact, we were the only banking software solutions provider to get a CMM level 4 at that time and the second company after Motorola to get a level 4 assessment. Subsequently, we had level 5 assessments. Today, there are many companies who have followed that model and been very successful.
After that, we decided to automate the entire engineering process. Since we had global development centers, we wanted standardization across the organization. The internal tool we created was very effective for our software development. Later, we provided it to our customers, enabling their organization to benefit and improve overall software development process. This kind of early success encouraged a lot of us to focus on internal use of technology.
Three years ago, when we were working on enterprise automation, we chose PeopleSoft as our backbone. Today, everything that we do — from recruitment to talent management, customer relationships, billing, financials, GAP accounting, reporting, consolidation, and interaction with customer — is on PeopleSoft.
How has the use of IT in BFSI changed in India, and what have driven these changes?
The usage of IT in the BFSI segment has gone through several evolutionary phases. In the 1980s, it was used primarily for total branch automation process. A large number of companies invested in that and got some benefits. But there are limits to expanding beyond a certain number of branches.
In the 1990s, when private sector banks like ICICI or HDFC started establishing roots in India, they used more modern platforms and implemented centralized core banking solutions with everything networked — branches, ATMs, etcetera. This opened up multiple service channels for their customers that, in turn, gave them a host of business opportunities.
In the last five years, the entire scenario has changed. In my opinion, the products and services available in India today are better than even those in more advanced countries like the US or the UK. Banks are now poised to analyze business information to derive maximum value and competitive advantage.
There is a mandate from the Reserve Bank of India (RBI) for banks to implement minimum requirements to adhere with risk and compliance norms. So, banks are investing in anti-money laundering solutions, among others. Today, BFSI investments in IT are next only to telecom.
What motivates IT usage in your company?
The primary drivers for us have been our intent to grow our business and use IT as an enabler. Using technology to innovate and then provide niche solutions to our customers is the key enabler of our growth.
Since we have over 700 customers in about 145 countries, our systems, which run 24/7, are really critical. From our own IT infrastructure to support system and disaster recovery, everything plays a critical role in terms of managing and complying with rules and regulations. Even during our quarterly business reviews, we look at our entire enterprise automation and how it impacts our business. Clearly, we treat IT as a part of our performance.
How does IT usage at i-flex set it apart from others in the same area of expertise?
What sets us apart, in addition to what I’ve said previously, is our rich repository, which is available to all our decision-makers, project managers and division heads. When we launch new products that are developed using the latest technological applications, we can always look into our knowledge repository, to check a list of dos-and-don’ts and answers to any problem. This gives us a huge step up in terms of usage of IT in our organization.
Should CIOs have a say in top management decisions, including marketing and distribution strategies?
In charting marketing and distribution strategies at i-Flex, inputs concerning the market or the positioning of a particular solution are driven by specific product or division heads. The CIO contributes with business reviews, ideas and suggestions. While these are highly valued, what ultimately drives distribution strategies comes from division heads.
However, during our business review meets, a lot of technical inputs as well as ways of doing business are studied. If we want to launch a training solution or an Internet-based brokering solution, we put together a huge amount of inputs on whether it can be sold in a licensed model or deployed using an ESP model. Here, the CIO plays a very critical role in contributing information.
What is the best approach for your CIO to justify a technology strategy for i-Flex�? What convinces you?
We have a two-three-year planning cycle when it comes to technology initiatives. We look at the growth of each business and the role of a CIO is to assimilate all this, find a time horizon — not just a short-term goal — and design an entire technology platform including network infrastructure, redundancies, etcetera. Then, we have a budgeting and approval process. The CIO really drives what is required and puts up a case for investing in certain technologies. At i-Flex, we don’t look at IT as a cost but as an investment for the future, with ROI spread over the next two or three years.
Can you cite an instance when your CIO’s ideas provided impetus to business?
Our own experience in implementing various automation platforms and standardization processes has enabled us to bring the same experience to our customers. We implemented a full-fledged CRM solution, which we also offer to our customers. Our leads can also link it up with their transaction processing system, which is often on Flexcube (i-Flex’s banking solution).
Another tangible is automating software engineering processes, based on which we have created a tool called Promotr (Process Monitoring and Tracking). Our lead assessors have configured them for our customers too. These are very tangible results that we have been able to derive out of whatever we’ve been able to invest in our own IT.
Mantas has been deployed at the Korea Exchange Bank. Does it have customers in India? Do you see a market for it here?
Mantas is a specialized anti-money laundering solution that addresses the KYC (Know Your Customer) processes. It has a very powerful behavior detection platform and can address trading and broking compliance, among other requirements. It has been deployed primarily in North America and the UK, and we now have been able to bring it to our Asian customers.
Recently, the RBI called for anti-money laundering processes. So, I believe this solution does have a bright future in India. We are already among the leaders in India for risk management solutions.
Islamic banking is not a strong point with many banking solution providers. What kind of work has i-Flex done in this area?
We have invested in in-depth research into the Shariat banking laws and the requirements for Shariat compliance. We have a complete, end-to-end solution for Islamic banking workflow, product configuration, profit attribution, and all that. We’ve invested 70 man years in this solution, and there is an ongoing investment in terms of addressing customer needs. It is not very useful in India since Islamic banking needs Shariat laws and a legal framework to support it. But, today, anybody can avail of these products because it makes economic sense — sometimes even better. We are looking at trends that have the HSBCs and Citibanks of the world aggressively launching Islamic Banking solutions, in addition to standard banking solutions.
What do you attribute i-Flex’s rise to?
When we set up the company, our mission statement said that we would enable financial institutions worldwide to excel. Our single-minded focus on this has been beneficial. We create innovative solutions and niche services like prime sourcing and consulting, which really give an edge to our customers. Our global exposure has also powered growth. This is one of the reasons why Oracle has chosen us to lead them into financial solutions and the BFSI segment.
What positive effect has Oracle’s acquisition had on your brand value and what kind of integration challenges do you foresee?
Oracle is known as the leader in database technology, and now, with the PeopleSoft and Siebel acquisitions, they lead the ERP applications space as well. Clearly, this has lent a huge amount of visibility and access to banks that use ERP. We are able to work closely with Oracle in addressing the needs of top-tier banks where size does matter. We are able to combine the might of both i-Flex and Oracle to provide solutions to these banks.
The collaboration that we have, in terms of technology changes, also gives us insights into new things happening on the technology front — especially in fusion architecture where Oracle has taken so many leaps. We are aligning ourselves to take advantage of all those technology innovations and bring in newer solutions for our customers on this platform.
As far as Oracle goes, its entire strategy for BFSI is being driven by i-Flex. Not only has it invested a few billion dollars in i-Flex, they have also asked our chairman Rajesh Hukku to lead the BFSI business unit within Oracle to create a dominant position in the BFSI space for Oracle. Clearly, this is affirmation of their strategy to use i-Flex’s strength to lead them into BFSI.
