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Case Study: State Bank of India, World's Largest Centralized Core

Case Study: State Bank of India, World's Largest

Centralized Core Processing Implementation

Analyst Author: Robert Hunt Senior Research Director, Retail Banking Feb 2009 Reference # V58:06R

TowerGroup Take-Aways • The State Bank of India (SBI), the largest and oldest bank in India, had computerized its branches in the 1990s, but it was losing market share to private-sector banks that had implemented more modern centralized core processing systems.

• To remain competitive with its private-sector counterparts, in 2002, SBI began the largest implementation of a centralized core system ever undertaken in the banking industry.

• The State Bank of India selected Tata Consultancy Services to customize the software, implement the new core system, and provide ongoing operational support for its centralized information technology.

• Although SBI initially planned to convert only 3,300 of its branches, it was so successful that it expanded the project to include all of the more than 14,600 SBI and affiliate bank branches.

• The State Bank of India has achieved its goal of offering its full range of products and services to all its branches and customers, spreading economic growth to rural areas and providing financial inclusion for all of India's citizens.

Report Coverage The implementation of the Tata Consultancy Services (TCS) BaNCS Core Banking at the State Bank of India (SBI) and its affiliate banks represents the largest centralized core system implementaion ever undertaken. The overall effort included the conversion of approximately 140 million accounts held at 14,600 domestic branches of SBI and its affiliate banks. This TowerGroup Research Note is a case study that overviews the history of the State Bank of India and details the effort to modernize the bank's core processing systems. It also identifies the drivers to modernization, the critical success factors, and the conversion methodology. For a broader overview of the Indian core systems market, see TowerGroup Research Note V47:13R, Looking for State-of-the-Art Core Banking? Try India.

Background The State Bank of India is the oldest and largest bank in India, with more than $250 billion (USD) in assets. It is the second-largest bank in the world in number of branches; it opened its 10,000th branch in 2008. The bank has 84 international branches located in 32 countries and approximately 8,500 ATMs. Additionally, SBI has controlling or complete interest in a number of affiliate banks, resulting in the availability of banking services at more than 14,600 branches and nearly 10,000

SBI traces its heritage to the 1806 formation of the Bank of Calcutta . The bank was renamed the Bank of Bengal in 1809 and operated as one of the three premier "presidency" banks (the presidency banks had the exclusive rights to manage and circulate currency and were provided capital to establish branch networks). In 1921, the government consolidated the three presidency banks into the Imperial Bank of India . The Imperial Bank of India continued until 1955, when India's

© 2002 - 2009 The Tower Group, Inc. May not be reproduced by any means without express permission. All rights reserved. TowerGroup is a wholly owned subsidiary of MasterCard Worldwide and operates as a separate business entity with complete editorial independence. MasterCard Worldwide is not responsible for and does not necessarily endorse any opinions, statements, or other content presented by TowerGroup. 1 central bank , the Reserve Bank of India , acquired the majority interest in the bank and changed its

name to the State Bank of India (SBI).

In 1959, the Indian government passed the State Bank of India Act, resulting in the acquisition (majority shareholding) of eight state-affiliated banks and the creation of the State Bank of India Group (SBI Group). The SBI itself is now majority owned by the Indian government, which purchased the shares held by the Reserve Bank of India. The State Bank of India and its affiliate banks are profiled in Exhibit 1.

Exhibit 1 Profile of the State Bank of India and Associate Banks (May 2008) Source: State Bank of India Group

Unlike private-sector banks, SBI has a dual role of earning a profit and expanding banking services to the population throughout India. Therefore, the bank built an extensive branch network in India that included many branches in low-income rural areas that were unprofitable to the bank. Nonetheless, the branches in these rural areas bought banking services to tens of millions of Indians who otherwise would have lacked access to financial services . This tradition of "banking inclusion" recently led India's Finance Minister P. Chidambaram to comment, "The State Bank of

India is owned by the people of India."

A lack of reliable communications and power (particularly in rural areas) hindered the implementation of computerization at Indian banks throughout the 1970s and 1980s. During this period, account information was typically maintained at the local branches with either semi- automated or manual ledger card processing. During the 1990s, the Indian economy began a period of rapid growth as the country's low labor costs, intellectual capital, and improving telecommunications technology allowed India to offer its commercial services on a global basis.

© 2002 - 2009 The Tower Group, Inc. May not be reproduced by any means without express permission. All rights reserved. 2 This growth was also aided by the government's decision to allow the creation of private-sector banks (they had been nationalized in the 1960s). The private-sector banks, such as ICICI Bank and HDFC Bank, altered the banking landscape in India. They implemented modern centralized core banking systems and electronic delivery channels that allowed them to introduce new products and provide greater convenience to customers. As a result, the private-sector banks attracted middle- and upper-class customers at the expense of the public-sector banks. Additionally, foreign banks such as Standard Chartered Bank and Citigroup used their advanced automation capabilities to gain market share in the corporate and high-net-worth markets.

State Bank of India Core Systems Modernization

Drivers for a New Core System SBI had undertaken a massive computerization effort in the 1990s to automate all of its branches, implementing a highly customized version of Kindle Banking Systems' Bankmaster core banking system (now owned by Misys). However, because of the bank's historic use of local processing and the lack of reliable telecommunications in some areas, it deployed a distributed system with operations located at each branch. Although the computerization improved the efficiency and accuracy of the branches, the local implementation restricted customers' use to their local branches and inhibited the introduction of new banking products and centralization of operations functions. The local implementation prevented the bank from easily gaining a single view of corporate accounts, and management lacked readily available information needed for decision making and

strategic planning.

The advantages in products and efficiency of the private-sector banks became increasing evident in the late 1990s as SBI (and India's other public-sector banks) lost existing customers and could not attract the rapidly growing middle market in India. In fact, this technology-savvy market segment viewed the public-sector banks as technology laggards that could not meet their banking needs. As a result, the Indian government sought to have the public-sector banks modernize their core banking systems. In response to the competitive threats and entreaties from the government, SBI engaged KPMG Peat Marwick (KPMG) in 2000 to develop a technology strategy and a

modernization road map for the bank.

In 2002, bank management approved the KPMG-recommended strategy for a new IT environment that included the implementation of a new centralized core banking system. This effort would encompass the largest 3,300 branches of the bank that were located in city and suburban areas.

The State Bank of India's objectives for its project to modernize core systems included:

• The delivery of new product capabilities to all customers, including those in rural areas

• The unification of processes across the bank to realize operational efficiencies and improve

customer service

• Provision of a single customer view of all accounts

• The ability to merge the affiliate banks into SBI

• Support for all SBI existing products

• Reduced customer wait times in branches

• Reversal of the customer attrition trend

Challenges for the Bank The bank faced several extraordinary challenges in implementing a centralized core processing system. These challenges included finding a new core system that could process approximately 75 million accounts daily — a number greater than any bank in the world was processing on a centralized basis. Moreover, the bank lacked experience in implementing centralized systems, and its large employee base took great pride in executing complex transactions on local in-branch

© 2002 - 2009 The Tower Group, Inc. May not be reproduced by any means without express permission. All rights reserved. 3 systems. This practice led some people to doubt that the employees would effectively use the new

Another challenge was meeting SBI's unique product requirements that would require the bank to make extensive modifications to a new core banking system. The products include gold deposits (by weight), savings accounts with overdraft privileges, and an extraordinary number of passbook

savings accounts.

Vendor Consortium Selection Recognizing the need for large-scale centralized systems expertise, SBI sought proposals from a number of vendor consortiums that were headed by the leading systems integrators. From these proposals, the bank narrowed down the potential solutions to vendor consortiums led by IBM and TCS. The TCS group included Hewlett-Packard, Australia-based Financial Network Services

(FNS), and China Systems (for trade finance).

Although SBI favored the real-time processing architecture of FNS's BaNCS system over that of the IBM consortium's memo post/batch update architecture, the bank had several concerns about the TCS consortium proposal. They included the small size and relatively weak financial strength of FNS (TCS would eventually purchase FNS in 2005) and the ability of the UNIX-based system to meet the scalability requirements of the bank. Therefore, it was agreed that TCS would be responsible for the required systems modifications and ongoing software maintenance for SBI. Additionally, scalability tests were performed at HP's lab in Germany to verify that the system was capable of meeting the bank's scalability requirements. These tests demonstrated the capability of TCS BaNCS to support the processing requirements of 75 million accounts and 19 million daily

transactions.

Tata Consultancy Services and TCS BaNCs Tata Consultancy Services, headquartered in Mumbai , India, is one of the world's largest technology companies with particular expertise in systems integration and business process outsourcing. The company has more than 130,000 employees located in 42 countries and achieved revenues of $5.7 billion in fiscal 2008. Although TCS has long been a leader in core systems integration services for banks, after it purchased FNS in 2005, the company also became a leading

global provider of core banking software for large banks.

The BaNCS system is based on service-oriented architecture (SOA) and is platform and database independent. In addition to SBI, TCS BaNCS clients include the Bank of China (installation in process), China Trust, Bank Negara Indonesia, India's Bank Maharashtra , National Commercial

Bank (Saudi Arabia), and Koram Bank (Korea).

TCS has also expanded its US footprint with the opening of its largest resource delivery center in North America (near Cincinnati, Ohio) that can house 20,000 personnel. The company is seeking to license and implement the BaNCS system in North America and recently completed a major part of

an effort to ensure that the BaNCS system meets US regulatory and compliance requirements.

Initial SBI Core Systems Modernization Project The contract for the initial project was completed in May 2002; 3,300 branches were to be converted by mid-2007. TCS immediately began a six-month gap analysis effort to determine the required software changes to the BaNCS system. The changes included installing required interfaces with more than 50 other systems as well as making enhancements to support the bank's product requirements. These product requirements were separated by customer segment to allow the vendor and bank to begin conversions before all the needed modifications were implemented. They placed a priority on the needed changes that would allow branches with high-net-worth

individuals and then corporate accounts to be converted as soon as possible.

Before the first conversion in August 2003, TCS and HP created the data processing environment for SBI. The primary data center was established on the outskirts of Mumbai and a backup center

© 2002 - 2009 The Tower Group, Inc. May not be reproduced by any means without express permission. All rights reserved. 4 was established approximately 1,000 miles to the east in Chennai . The centers were equipped with HP Superdome servers and XP storage systems in a failover configuration utilizing HP's UNIX

operating platform.

Initial Conversion Project The conversion effort began in August 2003, when SBI converted three pilot branches to the BaNCS system. The successful conversion and operation of the pilot branches was followed by the conversion of 350 retail branches with high-net-worth customers between August 2003 and September 2004. At this point, the bank intentionally halted the conversions to analyze and resolve reported problems. They analyzed, categorized, and prioritized these problems by type of resolution (e.g., software, procedural, training) and severity. TCS managed software revisions for the critical software changes while the branch personnel managed the needed training and

procedural changes.

After the software and procedural changes were implemented, SBI converted an additional 800 branches between December 2004 and March 2005. Unlike in the previous conversions, this group of branches included predominantly commercially oriented offices. The conversion effort then refocused on retail branches until November 2005, when the bank paused again to resolve

problems that came up during this second group of conversions.

After the second round of changes, the system and processes were functioning smoothly, and management believed the branch conversion could be accelerated. An assembly line approach

was then employed in April 2006 to speed the branch conversion process:

• Branch personnel were responsible for data scrubbing and cleaning of their customer information

on the existing system.

• Branches were notified three months prior to their conversion date to begin "mock," or test,

conversions using a specially created test version of the BaNCS system.

• Branches performed several test conversions to ensure the actual conversion went smoothly.

As the new core banking system was rolled out across the SBI branches nationwide, a special process was introduced in the nightly batch window to add the new branches. The process increased batch processing time approximately 20 minutes and typically included adding branches in groups of 50. This additional process, of course, was unnecessary upon completion of the rollout and has since been removed from the nightly batch window. TCS and local area branch managers oversaw the conversions, and the bank's circle (regional) heads formally reported the status to the

chairman's office.

By employing the assembly line approach for branch conversions, SBI was able to convert 1,200 branches in April and May 2006, completing the initial 3,300-branch conversion two months ahead of the original schedule. The milestones for the initial core systems implementation project are included in the SBI and affiliate banks core systems modernization time line in Exhibit 2.

© 2002 - 2009 The Tower Group, Inc. May not be reproduced by any means without express permission. All rights reserved. 5

Exhibit 2 Time Line of State Bank of India and Affiliate Banks' Core Systems Modernization (2000–09) Source: Tata Consultancy Services (TCS)

Affiliate Banks' Conversion As the rollout plans for State Bank of India were being finalized, the bank decided to extend the scope of the core banking implementation to include its (then) eight affiliate banks. TCS created a

separate processing environment within the Mumbai data center used to support SBI.

The conversion effort for each of the affiliate banks spanned 18 to 24 months; the first six months were used for planning, training, and establishing the processing environment for the banks. The branch conversions overlapped among the banks, allowing all the affiliate banks to be converted in 30 months. The project was begun in July 2003 for the State Bank of Patiala and in 2004 for the other affiliate banks. All of the affiliate bank branches were converted to the BaNCS system by the

end of 2005, as reflected in Exhibit 2.

State Bank of India Full Branch Conversion

The success of the initial 3,300-branch conversion for SBI demonstrated that:

• TCS had the technical capabilities to support the bank's IT initiative and scale of operations.

• Bank personnel had the skills to adopt new processes and support the conversions.

• The Indian customer base would react to new technology by adopting new electronic services and

demanding new, more sophisticated banking products.

• An assembly line approach could be used effectively to support large-scale branch conversions.

© 2002 - 2009 The Tower Group, Inc. May not be reproduced by any means without express permission. All rights reserved. 6

Given the success of the initial project and SBI's desire to offer new products to all of its customers, a new IT plan was created that would encompass all branches. TCS and the bank would have to

demonstrate the capability to process 100 million accounts in a single processing environment.

TCS and HP then conducted another scalability test in September 2006 to determine if the system could process SBI's entire base of 100 million accounts (excluding the affiliate banks, which use a separate processing environment) with sustained peak online throughput of 1,500 transactions per second. They conducted the test at HP Labs in Cupertino, California, using two 32-CPU HP 9000 Superdome application servers and two 32-processor Itanium Core HP Integrity servers for the database. The test achieved a sustained peak real-time transaction rate of more than 1,575 transactions per second, meeting the projected processing demands of SBI. Additionally, batch tests were run for both deposits and loan account processing. The month-end batch process for loans required 1 hour and 5 minutes, and deposit processing was completed in 2 hours and 27 minutes. These benchmarks were audited by Ernst & Young, and the test results are highlighted in Exhibit 3.

Exhibit 3 State Bank of India Scalability Test of TCS BaNCS System for Full Branch Conversion Source: Tata Consultancy Services (TCS)

Based on the successful scalability test, SBI decided to convert the approximately 6,700 remaining SBI branches to the BaNCS system. The conversion of the remaining branches began in June 2006, with the stated goal of completing the conversion by year-end 2008. Utilizing the assembly line conversion approach established in the initial phase, the bank converted 1,400 of these branches by March 2007.

© 2002 - 2009 The Tower Group, Inc. May not be reproduced by any means without express permission. All rights reserved. 7

Because the conversion methodology and BaNCS system were thoroughly proven and stable, the assembly line conversion approach allowed the bank to complete the conversion ahead of schedule. Between April 2007 and March 2008 (the bank's fiscal year end), SBI converted 4,600

branches to the new system. The remaining branches were converted between April and July 2008.

Critical Success Factors Large-scale core systems implementations are typically the most costly and risky IT projects undertaken by banks. Failures of core systems projects are not uncommon at large banks and result in both financial impact and lost business opportunities. Further, failed projects lead other banks to delay needed core systems replacements because they measure the risk of failure against

the potential benefits of a new system.

TowerGroup believes that several critical factors contributed to the success of the SBI core

implementation effort:

• Senior management commitment. The project was driven by the chairman of SBI, who met every month with the information technology (IT) and the business sector heads. The chairman monitored the overall status and ensured that sufficient resources were allocated to the project. TCS senior managers were thoroughly committed to the project as well and periodically

met with the SBI chairman to review the project status.

• Staffing and empowerment of project team. The core banking team consisted of the bank's managing director of IT acting as team head and 75 business and IT people selected by the bank. TCS also staffed the project with approximately 300 IT professionals trained on the BaNCS system. Importantly, the SBI business people were viewed not just as contributors to a key project but as future bank leaders. This team reported to the SBI chairman and was empowered

with all decision-making authority.

• Ownership by business heads. The regional business line heads were responsible for the success of conversion of their respective branches and reported the status to the chairman.

Thus, the business heads' objectives were aligned with those of the project team.

• Focus on training. SBI used its network of 58 training centers across India to train employees on the new system. TCS personnel first educated approximately 100 SBI professional trainers, who then trained 100,000 SBI employees at the centers; the remaining employees

trained at their respective job sites.

Benefits of New Core Systems Implementation The new core system has resulted in benefits throughout the bank for both the customers and the employees of SBI. For example, the new core banking system has allowed the bank to redesign processes. It established 400 regional processing centers for all metro and urban branches that have assumed functions previously performed in the individual branches. The bank recently

reported that business per employee increased by 250% over the last five years.

The bank has achieved its goal of offering its full range of products and services to its rural branches. It delivers economic growth to the rural areas and offers financial inclusion for all of

India's citizens.

Implementation of the TCS BaNCS system has provided the bank with the ability to consolidate the affiliate banks into SBI. In fact, the bank recently completed the consolidation of State Bank of

Saurashtra into SBI.

The bank has reversed the trend of customer attrition and is now gaining new market share. Completion of the core conversion project has also allowed the bank to undertake several new initiatives to further improve service and support future growth. These initiatives include the deployment of more than 3,000 rural sales staff, redesign of over 2,200 branches in the last fiscal year, opening of more than 1,000 new branches, establishment of a call center, and an active plan

© 2002 - 2009 The Tower Group, Inc. May not be reproduced by any means without express permission. All rights reserved. 8 to migrate customers to electronic delivery channels. The improvement in productivity and growth of business for the SBI Group is reflected in Exhibit 4.

Exhibit 4 Selected Business Results for State Bank of India Group (2002–07) Source: State Bank of India Group

Summary The implementation of the Tata Consultancy Services (TCS) BaNCS system at the State Bank of India (SBI) represents the largest core systems project ever undertaken. The success of this project

should encourage other large banks to begin projects to modernize their core systems.

The use of a UNIX-based platform to process more than 100 million accounts daily demonstrates that tier 1 banks can use a mainframe alternative for their core processing. Although TowerGroup expects that the majority of these banks will continue to rely on the IBM mainframe for core

processing, they can fully consider the benefits of utilizing a UNIX-based platform.

SBI's achievement demonstrates that attention to critical factors is crucial in implementing new core systems. The bank's senior management commitment, business line involvement, project team staffing and empowerment, and extensive employee training were all key contributors to the success of the project. Management also recognized the need for a proven systems integrator that

possessed in-depth expertise in both business and technology.

Core systems modernization has allowed the State Bank of India to centralize computer processing and operations functions, offer new banking products to all the citizens of India, reverse a trend of customer attrition, and consolidate its affiliate banks. Additionally, the bank can now further expand its product offerings and improve customer service.

© 2002 - 2009 The Tower Group, Inc. May not be reproduced by any means without express permission. All rights reserved. 9

India’s economic power is steadily rising on the horizon. It’s driven by its people—a critical force in companies around the world. India’s people now have a growing wealth that is creating new opportunities for them and their communities.

“India is the world’s largest democracy,” reports (link resides outside ibm.com) the World Bank. “Over the past decade, the country’s integration into the global economy has been accompanied by economic growth. India has now emerged as a global player.”

For more than 200 years, State Bank of India (SBI) has been the country’s largest public sector bank, and its financial foundation. As many of the bank’s customers grew their wealth in recent years, the bank saw that people had new financial freedom and sought new opportunities. It also knew that this growth could empower India’s future as a global financial force.

But the key to that future is digital, especially now. “Digital financial inclusion was a development priority before the COVID-19 emergency; now, it is indispensable for both short-term relief and as a central element of broad-based, sustainable recovery efforts,” the World Bank reports (link resides outside ibm.com).

“In India, 60% of the population is less than 35 years old,” says Amit Saxena, Global Deputy Chief Technology Officer at SBI. And every day, he says, that population goes online to shop.

So, SBI formed a vision of something more than a digital bank—it envisioned a comprehensive online platform with four pillars: a digital bank for convenience, a financial superstore offering investments and other financial services, an online marketplace with lifestyle products from partners, and an overall digital transformation with analytics that connected these options end to end.

“We wanted a customer experience transformation, and we called it ‘YONO,’—‘You Only Need One,’ ” Saxena says. YONO would give the bank an enormous market advantage, combining services, products and features into one mobile app with a platform that could integrate data across third-party products and streamline the customer experience.

But first, the bank needed to do some work behind the screens—it needed to align several systems to support millions of screens.

The bank has 491 million customers. It has 260,000 employees; 22,500 worldwide branches administered by a headquarters; 17 local head offices; 101 zonal offices and 208 foreign offices in 36 countries. “Around 76 business units were part of the discussion when we started building YONO,” Saxena says.

“It was a humongous thing when we started—to try a digital transformation like this, for a legacy bank like us. I still get goosebumps when I think about the start.”

64 million App downloads

To truly create a mobile financial marketplace serving millions of customers, the bank needed a proven partner with exceptional capabilities.

“After a lot of consideration, we wanted to partner with IBM to get the benefit of the global expertise and the technology stack—we have used the latest and the best available from the treasury of IBM,” Saxena says. “We cannot bring in a partner who needs to learn on our project and from our understanding.”

With a focus on insights and expertise from real people, the IBM and SBI team brought together a comprehensive group of stakeholders, including client partners, IBM partners, agencies and consultants.

To go beyond banking and serve a range of customers with various intersecting needs, the bank applied the agile, user-focused  IBM Garage™  Methodology, working closely with IBM Garage designers, architects and analysts to collaborate on all aspects of the project. Stakeholders participated in an IBM Garage  Enterprise Design Thinking™  workshop that turned each customer path into a “journey.” Then the methodology quickly took the journey from strategy through design thinking, agile development and scaled delivery.

“The first day, you talk about what you want to achieve,” Saxena recalls. The next day, the team designed the solution, completing the UI/UX on Day 3. The team evaluated dependencies on Day 4, presented it on Day 5, received approval on Day 6 and finally built it on Day 7. “So, most of the Garages—apart from the complex journeys—would only take seven days.”

The IBM Garage journeys captured key banking tasks such as transferring funds, paying bills or taxes, and analyzing spending. Customers could even plan a “cardless ATM withdrawal”—YONO gave them a 1-time code that they could enter at an ATM to withdraw cash without using their card—perfect for giving family members cash, even if they live far away.

But the journeys also captured loan tasks such as applying for a home, car, school or agricultural loan. They captured financial service tasks such as purchasing insurance, mutual funds or securities, and other tasks for managing credit cards and checks. They even captured marketplace tasks such as shopping, filtering products and finding special deals for YONO users.

With such comprehensive data integration, the bank made the new system’s security a top priority. “Security was most important,” Saxena says. “And because we were embarking upon a new transformation journey around a new technology stack, that was a very big concern for us. Let me be very clear.”

As the bank developed customer journeys with IBM Garage, IBM also worked with SBI to design intelligent workflows and build a robust system of security and stability to support the solution. Intelligent workflows now apply technologies such as AI, automation, blockchain, 5G, advanced analytics and cloud to change the trajectory and very nature of SBI work, adding greater visibility, real-time insights and the power to remediate problems across multiple business functions.

To establish a proven security and data integration platform across dynamic systems, the bank selected the  IBM® DataPower® Gateway  solution. YONO data is hosted on scalable  IBM Cloudant®  distributed databases, and  IBM DataStage®  software handles data extracts, transfers and loads across multiple systems.

To help ensure that YONO can access enormous volumes of distributed data while delivering the performance customers expect, the bank taps into the  IBM Cloud® Application Performance Management  solution.

The final piece of YONO is dynamic data integration and analysis behind the scenes. That’s powered by the  IBM Cognos® Analytics  solution, with insights and pattern detection from  IBM SPSS® Statistics  software and analysis storage in a purpose-built  IBM Db2® Database . With these analytics, YONO helps SBI target customers with more effective and relevant offers.

But the true potential of YONO lies in people—not only the growing financial freedom of India’s population but the partners outside the bank who build new apps and capabilities on the YONO platform.  IBM WebSphere® Application Server  provides the core platform where developers can create, connect and optimize their apps, while  IBM FileNet® Content Manager  offers low-code tools for building the new cloud-based apps. To intuitively connect these apps in a security-rich environment, the  IBM API Connect®  solution provides purpose-built power to monetize APIs and it uses IBM App Connect with MQ for assured delivery.

When the infrastructure for YONO security and stability was ready, the IBM Garage team used an agile approach to deliver a minimum viable product (MVP) for the banking services pillar first—in a surprisingly short amount of time.

“We launched the digital bank mobile marketplace end to end in three months’ work,” Saxena says. “It would’ve been impossible to do this if we did not have the IBM Garage methodology.”

The team continued to iterate and scale its initial MVP. Because the IBM Garage focuses on user-centered design and SBI prioritizes the customer experience, the team spent weeks conducting user testing and incorporating user feedback.

Once the team released the full YONO marketplace of financial and consumer products, it was time to see the power of people bring the system to life. Ultimately, this intelligent platform empowers SBI employees to work smarter and deliver an exceptional customer experience.

People have responded.

The vision of YONO has connected with people throughout India and beyond, and a strong initial launch gathered even more power over time:  

• 100+ digital customer journeys implemented since the YONO launch, giving people a vast range of online banking, financial and consumer options
• More than 64 million YONO mobile app downloads, including 5.23 million downloads in the first five months
• More than nine million YONO logins per day
• More than 10 million cardless ATM withdrawals
• 650,000 mutual fund transactions through YONO
• More than seven million bank account openings through YONO
• 400,000 life insurance policies sold through YONO

“It’s such a pleasant experience for our customers,” Saxena says. “They met it with open arms.”

Plus, e-commerce partners have helped expand the YONO ecosystem of intuitive products and services further. More than 100 partners across 21 categories are developing important apps, services and YONO user discounts that fuel the mobile platform’s success. “To retain a customer, you have to keep them excited, keep them engaged and keep offering something new. So, that’s why YONO has been such a great product,” Saxena says.

The power of new financial options is part of why SBI continues to count on its alliance with IBM. “Every month, IBM helps us build new journeys for our customers, which helps keep them engaged,” Saxena says.

“We have a lot of partners,” he continues. “They have been a great support during this—but IBM is different from any of them. IBM has extended all the support that we have asked from them.” SBI has worked with IBM to redefine its business workflows and processes as it transitioned them into digital YONO experiences. New IBM Garage journeys are simpler because they build on existing information. And, as more processes moved into online journeys, the bank eliminated redundant steps and traditional paperwork.

The digital transformation at the foundation of YONO facilitated a strategic collaboration between SBI and IBM. As a strategic ally, IBM has offered data-driven expertise that uses advanced analytics to help drive billions of dollars in business value for YONO and the bank overall.

“Today, YONO has a valuation of USD 40 billion to USD 50 billion—and we have built that in three years’ time with the help of a partner like IBM,” Saxena says.

SBI (link resides outside of ibm.com) is a multinational public sector banking and financial services firm based in Mumbai, India. The bank was first formed as the Bank of Calcutta in 1806. Today, it has 491 million customers, 260,000 employees and 22,500 branches around the world, with an annual revenue of USD 52 billion. SBI includes subsidiaries that offer investment, credit card and life insurance products.

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Management Case Study on State Bank of India

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The importance of this paper comes from the essential role is played by the organizational structure and departmentalization in any organization or businesses to grow and be profitable. This paper is addressing the relationships between the organization structure and staff performance, and draw distinctions between " hard " and " soft " performance criteria, by examining the direct and indirect influences of organizational structure and internal communication between the employees. This paper provides guidance to all employees by laying out the official reporting relationships that govern the workflow of the organization to provide a flexible and ready means for growth. The current paper aims to evaluate the relationship between organizational structure and continuous improvement and success in any organization and link it to the staff goals and area of responsibilities, and to know the impact of the Organizational Structure and departmentalization, and to determine the benefits of national and international organizations.

Azher Sakib

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Case study: How SBI creates economic value for its stakeholders

Founded in 1806 as the erstwhile Bank of Calcutta, State Bank of India (SBI) is the oldest commercial bank in the Indian subcontinent and India’s largest commercial bank in terms of assets, deposits, branches, number of customers and employees. As India’s largest bank, SBI seeks to generate economic value for all its stakeholders in a resilient, responsible and inclusive manner.     Tweet This!

This case study is based on the 2020-21 Sustainability Report by SBI , prepared in accordance with the GRI Standards, that can be found at this link . Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.

Being aware of its sizeable operations and the impact it has on the environment and society has made it more important for SBI to build a strong and consistent narrative on what the Bank stands for, by creating shared value for society and contributing towards the country’s development. In order to create economic value for its stakeholders SBI took action to:

• create economic value for employees
• create economic value for capital providers
• create economic value for the government
• create economic value for communities

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With this case study you will see:

• Which are the most important impacts (material issues) SBI has identified;
• How SBI proceeded with stakeholder engagement , and
• What actions were taken by SBI to create economic value for its stakeholders

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What are the material issues the company has identified?

In its 2020-21 Sustainability Report SBI identified a range of material issues, such as customer satisfaction, natural resource management, employee health and wellbeing, data security and customer privacy. Among these, creating economic value for its stakeholders stands out as a key material issue for SBI.

Stakeholder engagement in accordance with the GRI Standards              

The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:

“The reporting organization shall identify its stakeholders, and explain how it has responded to their reasonable expectations and interests.”

Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.

Key stakeholder groups SBI engages with:

To identify and prioritise material topics SBI engaged with its stakeholders through the following channels:  

What actions were taken by SBI to create economic value for its stakeholders ?

In its 2020-21 Sustainability Report SBI reports that it took the following actions for creating economic value for its stakeholders:

• Creating economic value for employees
• In FY 2020-21, SBI paid ₹ 50,936 crores for employee wages and benefits.
• Creating economic value for capital providers
• In FY 2020-21, SBI paid ₹ 3,570 crores to capital providers.
• Creating economic value for the government
• In FY 2020-21, SBI paid ₹ 151 crores to the government (net cash outgo on account of corporate income tax).
• Creating economic value for communities
• In FY 2020-21, SBI paid ₹ 145 crores in community investments.

Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?

The GRI Standard addressed in this case is: Disclosure 201-1 Direct economic value generated and distributed

Disclosure 201-1 Direct economic value generated and distributed corresponds to:

• Sustainable Development Goal (SDG) 8 : Decent Work and Economic Growth
• Targets: 8.1, 8.2
• Sustainable Development Goal (SDG) 9 : Industry, Innovation and Infrastructure
• Targets: 9.1, 9.4, 9.5

78% of the world’s 250 largest companies report in accordance with the GRI Standards

SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.

Research by well-recognised institutions is clearly proving that  responsible companies can look to the future with optimism .

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• Identify your most important impacts on the Environment, Economy and People
• Formulate in group exercises your plan for action. Begin taking solid, focused, all-round sustainability action ASAP. 
• Benchmarking methodology to set you on a path of continuous improvement

See upcoming training dates. References:

This case study is based on published information by SBI, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the following link:

https://sbi.co.in/documents/17826/24401/140621-Sustainability+Report%28SR%29+year+2020-21.pdf/ba271367-9542-e96a-0589-2968954b2e17?t=1623659643326

Note to SBI: With each case study we send out an email requesting a comment on this case study. If you have not received such an email please contact us .

Case Study: Transforming SBI YONO — A Journey to User-Friendly Digital Banking

Abhishek Singh Lodhi

“Please note that the images below are not blurred; they are of high quality. It may take a few seconds to load properly, so we appreciate your patience.”

Design Process

My design process includes four major categories and some subcategories in the section.

1. ANALYSIS

Current Design Analysis: Analyzed the existing SBI YONO app design, documenting issues on each screen, including user flow problems.

External References and Insights: 1. Examined AXIS Bank, Jupiter (Federal Bank’s online banking app), and UNION Bank for their superior design.

2. Personally interacted with AXIS Bank and Jupiter apps, focusing on onboarding, dashboard, and key features.

3. Reviewed a friend’s UNION Bank account screenshots.

4. Gathered valuable insights and identified potential improvements for the SBI YONO app from these external references.

2. RESEARCH

In light of time constraints, I opted to assess Play Store reviews instead of conducting user interviews to uncover improvement opportunities and app issues. I specifically examined 17 one-star reviews to gather valuable insights.

On the basis of the above research and time durations, screens selected for redesigning are shown below.

• Analysis and Insights: I gathered insights and performed an analysis based on my research.
• Screen Selection: I made decisions on which screens should undergo a redesign.
• Problem Cataloging: I documented the existing problems in the design.
• Goal Setting: I established end goals for the redesign.
• Inspirational Elements: I identified positive aspects from other apps that could enhance the redesign.
• Documentation: I documented all these insights and elements on cards for reference and planning.

Phase 1: After establishing the objectives, I transitioned into the visual design phase.

1. Categorization & Documentation: I methodically categorized each component of the current design into specific sections. This helped me identify areas that needed attention by carefully noting down the issues and problems in each section.

2. References and Iterations: Utilizing references from other banking apps, in combination with the documentation mentioned earlier, aided in the creation of a screen mind map and the development of high-fidelity UI designs. I consistently refined and improved elements like the splash screen, onboarding screens, and login section, guided by usability and design principles.

3. Inclusive Design Approach: I factored in edge cases to guarantee seamless functionality across diverse scenarios and user profiles. Additionally, I meticulously selected typography and a color theme to establish a unified and visually appealing design that aligns with the brand identity and enhances the overall user experience.

“Below, we will provide an analysis of the redesigned screens in comparison to the older version, offering an in-depth explanation of the improvements.”

Phase 2: Spent a week (2–3 hours/day) on the initial design phase, then moved to the dashboard design, a crucial part of the app.

• Analysis and Research: Conducted a section-wise analysis to confirm my findings. To ensure my analysis was on the right track, I decided to conduct a short user research using a Google Form with three questions.
• User Research: Received responses from 12 participants, helping me better understand the importance of the banking app and user needs in relation to the dashboard design.
• Reference from Other Apps: To gain additional insights, I also looked at two more references apart from the previous ones, Paytm and PhonePe, which are widely used for online payments.
• Design: Used the knowledge gained from user research and references to create a wireframe and then developed a high-fidelity design based on research.

Phase 2 design: Below, we will provide an analysis of the redesigned screens in comparison to the older version, offering an in-depth explanation of the improvements.

Phase 3: Worked on the search section and transaction history design.

• Enhanced Search: Improved the search functionality by referencing Paytm and Amazon. This optimization took just a couple of hours.
• Transaction History: In the transaction history section, I paid close attention to edge cases. I analyzed the current version and drew inspiration from Axis Bank and Bank of Baroda’s redesign as explained by Ansh Mehra in a video.
• Streamlining Sections: Merged two sections, mPassbook (open without login) and transactions, into a single screen for improved user flow.

Phase 3 design: Again, below we will provide an analysis of the redesigned screens in comparison to the older version, offering an in-depth explanation of the improvements.

Here’s a link to the prototype for a better view: click here

Written by Abhishek Singh Lodhi

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