(Pic: Uber CIO of Shinsei bank, Mr Jay Dvivedi)
ET Report –
There was a time when Shinsei Bank had so many Indian software engineers working at its headquarters in Tokyo that the company canteen introduced a range of curries on its menu. The software engineers were from TCS, Wipro, Infosys, iFlex, Polaris, Nucleus and their numbers were in thousands. Led by Jay Dvivedi , Shinseiâ€™s legendary Indian-born CIO, they transformed Shensei from the stodgy old institution it was five years ago to the sleek new retail bank it now is.
The story eventually became a Harvard Business School case study, titled Information Technology and Innovation at Shensei Bank, and CEO Thierry PortÃ© attests to the debt the Japanese bank owes the Indian engineers. â€œThe IT initiative totally changed Shinsei,â€ he says. â€œEven today, we are a Japanese bank that runs on Indian IT.â€
Formerly the head of Morgan Stanley Japan, PortÃ© joined Shinsei in 2003, two years after its IT rejig began, but as a long time resident of Tokyo, he was well acquainted with the problems of the countryâ€™s banking system. When Indian engineers first began their work at Shinsei, Japanese banks charged ATM users a fee for every transaction â€” and the service was available only during banking hours, till three oâ€™clock in the afternoon. â€œJapanâ€™s banks started sooner with IT, but they didnâ€™t change as technology developed,â€ says PortÃ© . â€œShinsei was one of the earliest to completely shut down legacy systems and start afresh.â€
Shinseiâ€™s IT project was completed in one year rather the three years originally estimated and it cost only $60 million â€” 10% of what other Japanese banks spent on similar projects. The Harvard case study gives the credit to Dvivediâ€™s relationship with Indiaâ€™s IT companies: â€œWith each company , Shinsei worked to establish a relationship characterised as a partnership rather than one of a supplier.
The bank worked with its partners without requiring competitive bids, avoiding traditional requirement documents such as Request For Proposal or Request For Information. Dvivedi believed these were superfluous process steps that added unnecessary time and overhead. Further, Shinsei did not enter into fixed-price contracts; on the contrary, engagements were quantified on a time-and-material basis.â€
An interesting aspect of Shenseiâ€™s new IT system is that it uses no mainframe computers. In fact, Shinsei is Bill Gatesâ€™ favourite company â€” featuring in every other speech he makes â€” for its systems are based entirely on PCs using the Microsoft Windows platform. Further, it uses the public internet rather than leased lines, which allows it to move work to any location, the most important of which is India. Shinsei still has a close relationship with its Indian IT partners, who are called in whenever its system needs to be expanded and upgraded , such as when it acquired APLUS, a consumer finance company , whose systems needed to be integrated with the bank. â€œWe have virtual work rooms in India,â€ says PortÃ© . â€œWe video-conference with our IT partners for new projects all the time.â€