CIOIN

Chandra Gupta

Head-IT, Barclays Corporate, India

Whenever a customer from any telecom operator wants to communicate with our systems, he is routed via the aggregator through a single line

Executive summary

A mobile platform using short codes was Barclay’s best bet to increase its reach in India. But could IT ensure that cost didn’t break the strategy?

The Organization: In 2007, Barclays launched retail banking services in India to increase its exposure to the country’s fast growing retail financial services sector. With retail banking set to grow at a rate of 30 percent annually, the bank was determined not to miss the boat.

The Business Case: One thing stood in its resolve to increase its reach quickly: An RBI mandate that restricted the number of branches a foreign bank could open in a year. So, it took the mobile route and by mid 2008 it had rolled out a project named ‘Hello Money’.

Hello Money fared well, but it didn’t give the bank as much bang as it wanted. The market just wasn’t ready and users weren’t comfortable performing transactions from a cell phone.

In the meanwhile, running operation Hello Money was becoming expensive.

The Challenges: Barclays India had made a conscious decision to base its mobile push on secure short codes—against mobile Internet or app downloads—to ensure that its services were available to consumers who did not own smartphones. And the great majority did not. But its short code number, which Barclays had secured from one telecom player, needed to be a standard—immaterial of telecom provider. It was like buying a choice license plate number: It was expensive.

Due to the constraints posed by technology, the short code strategy forced Barclays to sign up for leased lines with individual telecom operators, an expense that grew in proportion with the growing number of telecom players.

Worse, the short code strategy compelled Barclays to choose only the most popular telecom provider in a given circle—and exclude potential clients on other telecom networks in the same circle. “It's not easy to say no to only certain customers on the value propositions that you've set for them,” says Chandra Gupta, head-IT, Barclays Corporate India.

The Solution: To tackle these challenges, Gupta, who took over the reigns of Barclays India’s IT team in 2010, decided to use the services of a telecom aggregator. Aggregators are telecommunication providers that have established agreements with all local exchange carriers to resell their services. “So we use one operator as a main telephone line connection but other operators connect to us through the aggregator,” explains Gupta.

But involving a third-party intermediary required that security be fool-proof. After rigorous testing and internal validations Gupta decided to go ahead with it. “Whenever a customer from any telecom operator wants to communicate with our systems, he is routed via the aggregator through a single line,” says Gupta. This works for Barclays as it provides it with a single point of contact and it doesn’t have to depend on an operator coming on board to support them.

The Benefits: The project opened up a larger mobile user market to the bank—at a lower cost. Customers could use any handset, on any network, and the bank could offer them mobile banking features on the cheap. The strategy saved the bank about 40 percent in costs per month compared to the price it paid using leased lines from various operators.

The mobile platform has lowered the cost of every transaction by nearly 85 percent compared to branch banking. Now Barclays hopes to capture another 15-20 percent of users from all GSM operators.