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Nucleus FinnOne boosts Dhanlaxmi Bank’s retail lending ops

Sharon D'Souza, Reporter

Dhanalaxmi Bank, a known player in the Indian banking sector, had many issues to deal with when it decided to diversify its retail assets. Earlier, the bank was not aggressive about retail lending. So it got by with the support of an outsourcing partner which managed Oracle Flexcube (the bank’s core banking system). However, the bank wanted to change this arrangement and tap lending potential across India. To accomplish this task, Dhanlaxmi Bank decided to opt for a retail lending solution.

Before

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deciding on Nucleus FinnOne, Dhanlaxmi Bank wanted the software vendor to fulfill three criteria. The first condition was that its software should be widely used. Second, the solution had to be tested at multiple sites for scalability and reliability. Ease of use was the third criteria.

Keeping these as the selection criteria, Dhanlaxmi Bank conducted evaluations of available software (considered products include retail offerings from Laser Soft and Oracle Flexcube). These were evaluated in an attempt to extend existing systems to cover the loan department. However, the bank discarded these options since Nucleus FinnOne offered better scalability features. These scalability features suited the bank’s need to enable rapid rollout of new branches.

During evaluation of Nucleus FinnOne, testing for scalability and reliability went hand in hand. Although these criteria were satisfied, there still remained the top requirement pertaining to widespread adoption of the solution. In this regard, Nucleus FinnOne found favor due to its widespread usage—hence the team was familiar with use of this product. This knowledge eliminated challenges that arise out of an unknown product’s implementation.

Furthering its easy-to-use agenda, the bank obtained an unlimited license model while implementing Nucleus FinnOne. This meant that Nucleus FinnOne could be accessed by any of Dhanlaxmi Bank’s 270 branches across India. The software is hosted at Dhanlaxmi Bank’s centralized datacenter in Bangalore and accessed across India.

With all the required criteria in place, the bank considered Nucleus FinnOne’s other advantages. Better vendor support proved to be an added advantage at this point. For instance, Nucleus FinnOne provides silver, gold and platinum tier services. Since Dhanlaxmi Bank has a national presence, it opted for the platinum service tier to cover all its branches. Nucleus provides these services onsite and across the country. This was a crucial aspect that played a part in the selection of Nucleus FinnOne.

When it came to actual implementation, the bank kept in mind Nucleus FinnOne’s multiple module architecture. The first step in this regard is the loan origination system of Nucleus FinnOne, where the loan gets booked. The entire loan life cycle can be managed using this platform. Hence the system can keep track of loan repayments as well as interest calculation.

The second module (application processing and documentation) comprises of the statements of payment generated and corresponding maintenance of records. The third module (billing and accrual) deals with generating lists of defaulters along with their prior loan statements. The module also provides the user with a Web interface that enables them to track their loan statements online.

Currently, the bank is implementing Nucleus FinnOne on a module-wise basis across the organization. As part of the Nucleus FinnOne implementation, the first module was deployed at two locations on July 7, 2010.

Dhanlaxmi Bank has rolled out Nucleus FinnOne modules in different phases, which includes parameterization, testing and rollout. To start with, the rollout will be on a product-wise basis (depending on the business priorities). This will be followed by a location-wise approach and then a pan India rollout across all the branches. Currently, the businesses supported on Nucleus FinnOne are mortgages, loan against property, commercial vehicles, dealer funding, and new car loans. Finance against securities (including gold) is also on the anvil. “Besides, there are modules such as collections and collateral management that cut across all products. We have rolled these out with the help of our partners in record time," says Rajamani Muralidharan, the president of IT operations for Dhanlaxmi Bank.

As the solution is centrally administered, separate testing across locations did not become necessary. At the time of writing, loans are booked only in Delhi and Mumbai—later on, this will happen across India. Nucleus Finnone’s second and third modules will be implemented after the loan origination system’s rollout across India. The entire Nucleus FinnOne implementation is expected to be complete by December 2010.

Even though the Nucleus FinnOne implementation is still underway, the bank has already started enjoying a string of benefits. For example, a new service center or outlet can be opened without a great amount of preparation. After the Nucleus FinnOne solution has been put in place, the only required application requirement for a new branch is to provide user access to the loan organization system. That apart, Nucleus FinnOne enables the bank to easily choose business partners (such as marketing associates). Accessing the system through the Web and converting leads to business clients is much easier than in other methods.

After the first module’s implementation, the team conducted a research with users to ensure Nucleus FinnOne’s acceptance. The results showed that users were satisfied with Nucleus FinnOne and its ease of use.

As for the benefits accrued by customers, Nucleus FinnOne simplifies the process of loan application and approval. Nucleus FinnOne also provides the bank’s customers with a Web interface that enables them to check statements and loan details. Thus, the new implementation has become a big advantage for the bank as well as its customers.