A recent CII-PwC report on technology readiness of banks in India has chalked out infrastructure and data, organisation structure and IT spend, governance and architecture and applications as four major areas the banks should build upon, if they want to see technology as an enabler to gain competitive advantage.

On infrastructure and data, the report noted that most of the banks saw an average data volume growth in the range of 37.5% in the past three years and foresee the same in the next three years. Private sector banks have a higher data volume growth in the range of 43.75% while public sector banks anticipate a growth of around 31.25% in their data volume.

While the current picture on the infrastructure side is more of ‘bank owned-bank managed’ and ‘bank owned-vendor managed’ type of operations, the report says the movement will be towards ‘vendor owned-vendor managed’, particularly in the private sector.

The report mentioned that while IT spend has been growing in the banking sector, there are some non-core areas that need to be outsourced. While IT outsourcing in the private sector is at 49%, the public sector outsources only 19%. 50% of the respondents in the public sector were keen to increase their current outsourcing levels.

The overall IT budget constitutes of around 39% for infrastructure, 35% for applications, around 10% for security and 16% for new IT developments and enhancements.

On the governance and architecture front, data quality frameworks and definition of metadata were key missing pieces in the governance structure. Comparing the scores of policy definition and procedures, high asset banks had more clearly articulated governance policies than low and medium asset banks.

According to the report, the applications in the banks have to play a big role in fulfilling the regulatory compliance requirements as well as strong transaction coverage and analytics bandwidth to ensure customer centricity, performance management and revenue growth.

The report observed that while Indian banking has moved from a reactive mode to a proactive one, it is very important to lay the foundation for the future applications, to lead through the next wave of banking.