Infosys Technologies has launched a new banking solution that takes a central role in its suite of banking tools. Infosys president and managing director Nandan Nilekani describes Finacle as "a highly secure open platform for banks that are ready to go beyond banking". Put more simply, it's a central enterprise platform that allows bank staff to access relevant applications and information from a simple browser interface.
Finacle is designed using standard internet technology. The front-end is accessed using a browser on the bank's intranet, while the back-end is designed to use Oracle RDBMS. Its open architecture enables banks to offer products and services through ATMs, call centres, telephones and the Internet in multiple languages and multiple currencies, as well as interact with clearing houses and external payment gateways.
According to P. Rangarajan of the Infosys Banking Business Unit, the web-based architecture removes the hassles of software distribution and allows the bank to integrate the Finacle application and other value-added applications - such as mail, chat, the bank's intranet and rate feeds - within the same browser space.
"We believe all enterprise applications are moving towards this paradigm. It allows the end users to access both the core banking application and pull the relevant information from the intranet that will help them complete a transaction effectively and efficiently," he says.
Companies across all kinds of industries are realizing the need to integrate their many software packages and business systems. And there is no shortage of vendors pushing this enterprise model as the key to success in the new millennium. The basic idea behind all enterprise models is to have an open architecture with common internet standards that allow all software to be easily integrated in one browser screen and can be tailored for individuals and departments within a company.
Finacle's core functions cover the fundamental requirements for any bank, but different modules are available to cater for more specific needs and a scripts engine allows easy customization of all parts of the system. Modules are available for corporate and retail banking as well as trade finance.
Rangarajan says that risk management functionality was an important consideration in developing the software, particularly in the trade finance module. To this end, Infosys has included a central limit management feature that allows the bank to set up limits for corporates in a flexible manner (covering the corporate and its subsidiaries and fund-based and non-fund based activities).
"This allows the bank to keep track and put appropriate controls on the transactions," says Rangarajan. "For the advances/loans side we have an automatic asset classification feature that allows the bank to keep track and monitor the performance of their assets and ensure that they don't get into the non-performing category."
Branch connectivity
Because of the web-based/intranet nature of Finacle, all branches must be networked to use the system. This might not be so much of a problem in Hong Kong or Singapore, but in India, where poor infrastructure is a limiting factor, only the larger branches of a particular bank might be able to install such a system.
Another consideration with enterprise initiatives in general, is that many of them fail to deliver the value envisaged at the outset of implementation. According to Boston Consulting Group, one reason for this is that companies are blinded by what new software can do, and do not think carefully enough about what they actually need. Boston Consulting recommends companies undertake careful analysis of their business requirements and manage vendors and consultants rigorously to maintain focus on the company's needs.
Infosys has 35 customers for its banking solutions, half of which are in India with the remainder in other parts of Asia and the Middle East. According to the company, most of its customer banks have begun migrating their systems to the core Finacle solution.
