Dependence on Microsoft Windows XP is set to offer high risk to some 34,115 Indian PSU bank branches, a study said.
The high risk is because Windows XP will no longer be supported by Microsoft beginning April 08, 2014, but the study – done by Ascentius Consulting — shows that the penetration of Windows XP is still high at 40-70 percent in the banking sector.
The study warns that a large number of branches that rely on XP, especially in the rural and semi-urban areas may go down and therefore deny service to customers completely.
In metro and urban branches, the impact may be as great as 55 percent of customers facing an extended waiting time of up to 30 minutes for an average transaction.
The fiscal impact of this could be as much as loss of business opportunity worth Rs. 1,100 crore in a day and a loss of income of Rs. 330 crore over a period of 3 days.
According to Ascentius Consulting, staying on Windows XP will force banks to face loss of business opportunities because they will not be able to leverage eKYC (electronic Know Your Customer) norms, as proposed by the RBI.
Since Windows XP may not support new biometric devices, as required by RBI-UID norms, banks will be constrained to continue with manual verification of customers leading of higher costs and longer customer waiting times, the study said.
In addition, rural bank branches are expected to set up biometric readers and software to pass of benefits of government schemes like Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). Branches staying on Windows XP may not be able to deploy such government schemes.
The 100-working days timeline is crucial for banks as per Ascentius Consulting. This is because their study estimates the time to move from XP to modern technology for banks will be between 4-6 months.
“The move to a modern OS like Windows 8.1 will not only alleviate the risks for users and businesses but will also open up opportunities posed by modern technology, like the cloud, for them,” said Amrish Goyal, general manager, Windows Business Group, Microsoft India.