Banks in India will leapfrog ahead of their counterparts in Europe by around 10 years once the implementation of the core banking solutions drive is over.
Also, India and Africa have become key markets in the world for the implementation of CBS.
"The amount of activity in India is startling and that too in a market which is depressed. In the last 18-24 months around 22 banks in India have gone in for CBS. The markets in the UK and western Europe are not investing. India is seen as balking the trend," says Martin Whybrow, director and chief editor, Internal Banking Systems Publishing.
IBS Publishing is a London-based publication and is dedicated to the wholesale, retail and private back office systems market sector.
A host of banks, especially public sector banks, are in the process of implementing CBS in the country. The banks, which are in this process include State Bank of India, Punjab National Bank, Union Bank of India, Syndicate Bank.
"Banks in India will leapfrog ahead in technology. They will be able to provide better customer service, lower their cost base etc. Compared this with banks in Europe, which still have legacy systems. It will take 10-15 years for banks in Europe to come up with similar systems," he added.
Though there is a major demand for CBS in the country, foreign suppliers have not been able to get a toehold in the market.
Of the more than 22 banks, which have gone in for CBS, only two have chosen overseas suppliers -- SBI has gone in for FNS from Australia, while ING Vysya has roped in the US-based Sanchez.
"The Indian market is difficult for non-Indian suppliers. Domestic companies have a strangle hold on the markets and it is very difficult to compete on price, support functions etc. Also Indian banks have bigger volumes and the system needs to be scaleable to handle volumes," says Whybrow.
However, the implementation of CBS is taking a lot of time in the country. There has also been a problem of telecom infrastructure, which has now improved leading to faster implementation in the recent projects.
Also, as most of the banks are either implementing Flexcube or Finacle, there is not much competitive differences in the information technology structure.
"All the banks are ending up with the same systems. There is a sort of catch-up which is happening among different banks," adds Whybrow.
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