New Delhi, Aug. 22 -- Federal Bank, one of India's oldest private sector banks, took a major step in modernizing its operations by introducing FedOne, a transaction banking platform built with Nucleus Software. The decision was shaped by limitations in the bank's legacy system, which struggled to handle growing transaction volumes and occasionally delayed payroll processing, an issue that created concern among corporate clients.
"They were looking for a solution that could deliver robustness," said Vishnu R. Dusad, Co-Founder and Managing Director of Nucleus Software. "The platform they were using at the time did not meet their requirements, so they wanted to make a change. Robustness is an area where we place strong emphasis, and based on that, they decided to move forward with us."
A Platform for Corporates and SMEs
FedOne, powered by Nucleus Software's FinnAxia solution, was designed to serve both large corporations and small and medium enterprises. For corporates, the platform supports workflows with multiple layers of checks, allowing one person to initiate payments, another to approve them, and a third to authorize them. This structure is critical in organizations with dedicated finance teams.
For SMEs, which often rely on just a few people to handle all financial functions, the platform offers the flexibility to complete transactions end-to-end without unnecessary complexity. "While the software for corporations must support multiple levels of approval, the same platform must also be flexible enough for SMEs. It should allow one person to complete the entire process while still maintaining essential controls," explained Dusad.
The implementation was completed in ten months. One of the main challenges in projects of this kind is migrating large volumes of historical data from old systems. According to Dusad, Nucleus Software's experience in handling migrations played a crucial role in meeting the deadline. "Over the years, we have gained strong expertise in handling migration, which can often be complex. Because of this experience, we were able to manage the process effectively and complete it within the planned timeline."
Measurable Outcomes
The new system has led to clear improvements. Complaints related to transactions fell from 10%to 3%. Application availability rose to 99.98%, with no downtime recorded. The platform now processes around 100,000 transactions per day, with 14,000 customers onboarded and 9,000 actively transacting.
Another milestone was the integration of the Central Board of Direct Taxes (CBDT) facility, enabling customers to make tax payments directly through the platform. Monthly CBDT transactions now average 1,500, amounting to around Rs 200 crore. From the customer's perspective, transactions are faster, more reliable, and available on demand.
Real-Time Data and AI Capabilities
FedOne also incorporates analytics and artificial intelligence to improve operations. Customers can search historical transactions quickly with smart search tools, even within large data volumes. Anomaly detection identifies unusual transactions, such as sudden spikes in payment values or unexpected utility bills, and flags them for review. Cash flow forecasting helps corporates predict funding gaps and plan ahead.
"These solutions deliver value not just to our direct customers, which are banks, but also to their customers, corporate clients as well as SMEs," said Dusad. "Accuracy is central to what we do. Even a difference of one paisa in a calculation involving lakhs of rupees can create doubt in the mind of a corporate customer. That is why precision and reliability are built into our systems."
He explained how AI is being applied in three main areas. The first is smart search, which makes it easier to locate transactions from months earlier without manually scanning through large volumes of records. The second is anomaly detection, which creates transaction profiles for customers and identifies unusual activity outside normal patterns. If a payment falls well outside a customer's typical range, the system holds it back for manual review, preventing errors and fraud. The third is cash flow forecasting, which analyzes past transactions to predict shortfalls and incoming funds, helping corporates manage liquidity in real time.
"These tools simplify banking for corporates and SMEs," Dusad added. "They make everyday operations faster and safer, while giving businesses the confidence that their transactions are being monitored and managed with the highest accuracy."
Embedded Finance and the Road Ahead
The introduction of FedOne reflects larger changes in the banking sector, particularly the rise of embedded finance. Increasingly, payment and lending services are being built directly into commerce platforms, making them a seamless part of transactions.
"Whenever we engage in an online transaction, whether it is e-commerce or quick commerce, there are two parts: the order itself and the payment. That second step is embedded finance, and it is becoming essential," said Dusad. He added that the company is focusing on enabling banks to offer such services, from smooth payments to on-demand lending, as part of digital ecosystems.
By aligning a more stable platform with advanced analytics and flexible workflows, Federal Bank has been able to improve reliability, reduce complaints, and deliver uninterrupted services to its customers.
Published by HT Digital Content Services with permission from TechCircle.