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 finacle@edgeverve.com

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About Infosys FinacleFinacle is the industry-leading universal banking solution from EdgeVerve Systems, a wholly owned product subsidiary of Infosys. The solution helps financial institutions develop deeper connections with stakeholders, power continuous innovation, and accelerate growth in the digital world. Today, Finacle is the choice of banks across 94 countries, and serves over 848 million consumers – estimated to be nearly 16.5 percent of the world’s adult banked population. Over a billion bank accounts are powered by Finacle globally.

Finacle solutions address core banking, online banking, mobile banking, payments, treasury, origination, liquidity management, Islamic banking, wealth management, and analytics needs of financial institutions worldwide. Assessment of the top 1000 banks in the world reveals that institutions powered by Finacle enjoy 50 % higher returns on assets, 30 % higher returns on capital, and 8.1 % points lesser costs to income than others.