This piece of mine on SBI was published in Business Standard way back in mid 2006 when the bank was going through a sort of BPR after O P Bhatt took charge. Wanted to share it with you all. Would appreciate your thoughts on this. Good to see the way things have changed since 2006!
The text of the article is below (attachment shows the scanned copy):
No amount of exhorbitant investment in latest technologies such as core banking solutions can improve the business processes and customer orientation in PSU banks, unless tha attitude of the staff and work culture prevailing changes accordingly. It is good to see the new CMD of State Bank of India, O P Bhatt, finally accepting this reality and subsequently putting a 90 day hold on further implementation of core banking solutions across its branches, to put more emphasis on customer preparedness.
In recent years, PSU banks seem to have lost focus, resulting in a mad rush to have mroe and more branches and publicising their technological achievements with full page adverstisements in the print media. After all, it is public money they are wasting on thse unnecessary activities. Today, multinational IT giants are driving the strategic decisions of PSU banks with a spate of IT-enabled delivery channels. But how far have such huge investments by PSU banks in IT resulted in increasing the market share? Why have the comparitively smaller private sector banks snatched a majority of business from PSU banks in spite of almost similar investments in IT? And finally, why are giants like SBI constantly losing market share despite having 3,200 branches on the much touted core banking?
The answer lies in the fact that these banks have lost focus from their core competencies. It is time for the government to carry out a SWOT analysis of PSU banks and have these banks utilise their inherent and unmatched strengths such as huge skilled workforce, geographical spread, and the lost “human touch”.