Indian Banks: Will the End of Life of Windows XP Give Linux a Boost?
When Microsoft announced the end of life for its long running Windows XP software, it spelt trouble for Indian banks. Most of their infrastructure is still running on Windows XP and they have no choice but to migrate. If they don’t, they are in trouble! H
Beginning April 8, 2014, Microsoft will no longer support Windows XP. Over 34,000 bank branches in India are likely to be affected by this decision. If the banking companies do not switch over, they will become vulnerable to attacks. A study conducted by Ascentius Consulting on behalf of Microsoft revealed that penetration of Windows XP in the Indian banking sector is about 70 per cent, which is a pretty high figure.
Microsoft confirms this fact in a statement, “Some 34,115 Indian PSU bank branches are at risk, thanks to their reliance on Windows XP. Windows XP will no longer be supported by Microsoft, beginning April 8, 2014, but the study shows that the penetration of Windows XP in the banking sector is still high at 40-70 per cent.”
The risks...
One of the biggest risks that the banks might face by not migrating from Windows XP even after the end of its life is that their ability to respond to customers might deteriorate. Since a large number of bank branches in the rural and semi-urban areas still rely on Windows XP, the efficiency may go down, even leading to a complete denial of services to the customers.
It may become difficult to manage waiting times. “The fiscal impact of this could be as much as a loss of business opportunities worth Rs 11,000 million in a day and a loss of income worth Rs 3,300 million over a period of three days (assuming that a major incident may take three days for the systems to come up to normal functioning),” revealed the Microsoft study.
Besides, XP users are at six times more risk than the users of other modern day, upgraded operating systems, despite the fact that they encounter the same amount of threats. Also, they are 21 times more vulnerable, said Microsoft. So if a bank doesn’t plan to migrate, it might just end up spending three times more.
The challenges...
Apart from ensuring perfect security, IT heads of the financial sector have several other challenges to face. Shyam Panicker, CIO, SBI Caps, said, “Shrinking IT budgets and lack of flexibility are the two major challenges faced by our sector. Apart from these, there is not much choice when it comes to innovating in technologies, as the processes in our sector need to be constantly running. We have to take utmost care of the regulatory and policy requirements. So, we have a lot to consider before switching over to any new technology.”
The opportunities...
The risks are many but so are the opportunities. The end of life for Windows XP is one of those opportunities for banks to
leverage the power of open source technology. Open source technology is already powering the back-end infrastructures of many banking and financial organisations across the globe. It is time for Indian banks to empower themselves with open source at the front-end as well. Speaking on the condition of anonymity, a CTO of one of the largest banks in India said, “This is a very interesting situation for us. We can either continue being on the Windows platform by upgrading to a newer version or can try anything from the open source world. The fact is that we are already experimenting with some open source alternatives. The migration process is clearly not as easy as one might think because we operate on a daily basis and cannot shut our functions for anything. But, we have got ample time to switch over to other platforms, and we have the opportunity of trying out some open source alternatives.”
Explaining the status of his organisation, Kersi Tavadia, CIO, BSE, said, “We are gradually moving away from Windows in all possible ways. We do have machines running on Windows XP, but the end of life of XP is not a major concern for us as we already have plans in place. We are evaluating open source operating systems like Ubuntu to be used on our desktops.”
Why open source?
To this question, the simplest answer is “Why not open source?” Open source technology has made it to the most ‘unexpected’ places. The New York Stock Exchange is perhaps one such place. The NYSE runs Red Hat Enterprise Linux on its trading platform. Another example of the successful deployment of Linux in the financial sector is that of state-owned Industrial and Commercial Bank of China. The bank has migrated all its 20,000 retail branches to Linux. Being the largest bank in China, the organisation committed to getting ‘an unrestricted user licence’ as part of a full-blown integration of Linux ‘throughout its entire banking operations network’, which was completed in 2008. This was one of the largest Linux deployments in China. Linux was used as the basis for the bank’s Web server and a new terminal platform.
According to a study by Cignex, clients that deployed open source technology saved an average of 93 per cent on costs in the first year alone. Underscoring the benefits of open source technology in the BFSI sector, Venkatesh Swaminathan, country head, SUSE, said, “Modern day organisations cannot ignore the power of open source technology. Linux is being majorly used in the enterprise space. The flexibility and cost benefits that open source technology provides are immense. For sectors like banking and finance, it is advisable for companies not to be bound by a proprietary technology. If they are on open source, they have the liberty to modify and innovate their technology as and when they feel the need to do so.”
So, banks clearly have no choice but to migrate from Windows XP now. Sans support, the technology can leave users extremely vulnerable. On the other hand, open source technology is a clear option for the 34,000 bank branches to migrate to, if they want control of their technology, in an affordable way.