Case Study

State Bank of India Manages Nation’s Largest ATM Network

The State Bank of India has over 75 million customers, 9,000 branches and 200,000 employees. When it was time to implement a state-of-the-art ATM system, it moved swiftly. ACI technology helped the State Bank of India reach its goals.

Fast-Growing ATM Service

An important and highly visible component of their service is a 24-hour ATM system. It offers reliable banking access at 4,000 ATMs nationwide, with plans to add another 2,000 terminals over the next year. The bank has issued 6 million debit cards and expects to grow to 10 million as consumers embrace electronic banking. Their cards are Maestro branded and can be used at ATMs and 52,000 retail shops across India.

“It was quite a challenge to migrate customers away from branches,” said Ramanathan. “Most were new to the technology, so we had people stationed in the branch who would walk the customer to the ATM and make them comfortable with the first withdrawal. We always found that the first transaction ultimately determines the comfort level of the user.” Volumes have grown to 15 million transactions a month.

“Compared to where we started, our total volume is quite impressive,” Ramanathan said, “but when we look at the total customer base we have, there’s a long way to go. The process of weaning customers away from the more costly branch is a continuous one.”

In addition to supporting traditional transactions, the bank offers unique services to make the ATM more personalized. They were the first bank to allow students to pay exam fees to their university through the machine and were among the first to allow mobile phone users to top up air time at the ATM. Now plans are underway to allow consumers to make government related payments through the ATM.

Overcoming Challenges

There were several challenges to overcome in launching their system. Besides working with an aggressive timeline, bank staff had to integrate the ATM system with 4,000 individual branch hosts, establish card issuance procedures, and define reconciliation processes and settlement mechanisms.

Communications were another challenge since the bank’s ATMs and branch hosts span the breadth and width of the country. Rural locations had poor telephone connectivity. The bank used a combination of VSAT, landlines and ISDN for connectivity, eventually managing a network with 8,000 TCP/IP connections.

BASE24 manages ATMs and switches not-on-us transactions through a domestic interchange, which is operated by ACI’s local partner in India, Financial Software & Systems (FSS). The bank uses GoldenGate software to replicate data for disaster recovery. Their main data center for ATM operations is in Mumbai. A corporate IT center in Bombay is responsible for selecting and fine-tuning applications; technical teams at each of 14 local head offices focus on roll-out. Each head office oversees several hundred branches.

“For a bank of our size, we wanted a proven and highly reliable transaction switch,” said  Ramanathan. “Based on our global search, we found BASE24 to be reliable and have proven support for our volumes.

“We also wanted a scalable switch,” he continued. “That meant scalability of application software, hardware and systems software to support our business growth. We found the BASE24/NonStop system to be a good choice considering total cost of ownership and ease of scalability. We also recognized that the system was the preferred choice from a data integrity standpoint.”

Ramanathan describes ACI and FSS as partners of the State Bank. “Our ATM network is one of the fastest growing networks in the world today,” he said. “With a wide range of proven products, domain knowledge and commitment to the industry, we believe ACI and FSS are helping us maintain our leadership position.”