Finacle Whiteboard

Soaring customer expectations have not only transformed retail banking but have also influenced the way bank treasuries operate. Plain vanilla FX and money market deals are but hygiene today. Treasurers are busy structuring complex deals for their customers; while exotic options are commonly found, plain vanilla American and European options are getting rarer. The focus on risk management is growing as well, as treasurers strive to comply with global regulatory mandates.

Given the complex nature of operations, treasurers necessarily need to depend on real time information to take informed decisions. From technical charts to macroeconomic indicators such as the inflation index, CPI and PPI numbers, employment data, intelligence driving technology is key. Treasurers also need to rely on decision support systems and analytical tools to enable agile decision-making. It won’t be incorrect to state here that technology has proved invaluable for market research and to develop mathematical models.

I believe that treasury technology should strive to keep pace with the constantly evolving business environment. Today, IT heads seek to establish state-of-the-art trading floors embellished with Reuters, Bloomberg, dealing screens, best of breed management systems, algorithmic trading platforms, dedicated hotlines, flashy LCD screens and possibly every other modern day gizmo that can fit into the treasury landscape. There is also increased focus on leveraging technology to manage risk and regulate markets. Intuitive dashboards, complex pricing, structured deals, VaR calculations are all being driven by technology. After all, as treasury operations by their very nature are extremely complex and in a state of constant flux. The key is to have the best brains maneuvering treasury operations, enabled by the best technologies. However, besides selecting the appropriate technology, it is critical for the bank to use it appropriately to achieve the desired business outcome.

Taking this theme forward, I am authoring an article which will be featured in the next issue of FinacleConnect. So stay tuned to learn why treasurers have no choice but to adopt leading edge technologies that can help them gain the agility so critical to conduct business in today’s hyper-competitive market.

Posted by Sanjeev Kumar nargotra at 10:48 AM | Permalink | Comments (0) | TrackBacks (0)

So asked the teller, D. Smith was connected to, when he reached his bank one grey Monday morning. No! Mr. Teller had not set eyes on Smith ever...nor had Smith dealt with him before. In fact, Smith was not even surprised. His bank always seemed to have a little window to his life open...and of course a way to quietly brighten dull blah mornings...even if only a wee bit.

Yes! It's quite likely you've heard of real-time information and humanized interaction management software. But I believe we've not all realized just how it can really redefine banking. Just think...how in a hundred ways personalization of service experience and building of customer intimacy can throw open new doors. With channels like ATM, Internet and the mobile increasingly replacing branches and effectively reducing bank's face-time with customers, the dependence on relationship management skills to manage critical customers is high. Simultaneously, competition is getting stiffer and customer preferences more fickle. Commoditization of product offerings is a real threat, on-demand access to customer information a necessity and positive impact on customer stickiness critical. In such a scenario, what can a bank do to institutionalize customer relationships?

There just may be sufficient merit in relying on technology for on-demand access to a wealth of customer information to counter all these challenges and then some more.  Of course, adequate care would have to be exercised to avoid unwarranted intrusion into the customer's 'private' space. The focus would have to unerringly be on 'relevant information only. What if your staff could suggest key offers applicable for the customer based on the customer's profile without ever having met him? Or, if your bank's systems could factor in new information in real-time, adjust to prompts and intelligently participate in customer interactions, simulating real human conversation? Or, even better, what if you could arm your business with a sustainable competitive edge through the consistent delivery of ‘ first-class' customer experience, with price parity?

 With technology that's actually really simple...it's all possible. And that, I think, is simply great...and D. Smith will agree.

Posted by Haragopal Mangipudi at 07:04 AM | Permalink | Comments (1) | TrackBacks (0)

Although channels have been the top focus area for banking innovation in recent years, they haven’t run out of steam. Most banks today have a good vision for their channel strategy – one that builds a strong partnership with customers and puts them firmly in control of the relationship. A few interesting examples on how banks across the world are powering their innovation agenda using channels, technology or both.

Barring a few countries where regulatory or cultural issues present a hurdle, online modes are at the forefront of channel innovation everywhere. And why not, since the online channel is effectively every bank’s largest branch! In Spain, most banks offer their entire product and services suite online; Turkey is a model of mobile banking progress, where one can locate an ATM and withdraw cash from it, using not a card, but the mobile phone! Kenya has launched card-less, mobile-enabled peer to peer payments at commercial establishments. And although Portugal still faces cultural resistance to Internet banking, that hasn’t stopped banks from launching innovative services such as online deposit and loan auctions.

And now, channel innovation is going beyond improving customer reach and convenience, to address online security issues. A Turkish bank is employing two-level transaction authentication, one through the bank and the other through the mobile operator, along with electronic signatures to further improve the security of mobile banking.

Interestingly, the view from most bankers on the role of IT in innovation had one of the two seemingly opposite views – those from legacy-centric banks felt it was a big barrier, whereas those representing institutions that had already transformed their core systems acknowledged it as the key enabler. Several belonging to the former group felt that it was possible to innovate even without elaborate IT infrastructure. On the flip side, Service Oriented Architecture and Virtualization seemed to have found favour with the IT-believers, who felt that these two would be the prime movers of banking transformation. Of the other technology-driven innovations, the use of mobile banking to reach unbanked markets and RFID technology for in-branch customer authentication has exciting prospects. And banks are still looking for technologies that can enhance sales and advisory skills of front-line executives by allowing them to collaborate in real-time with other bank staff having specialized skills.

So channels…technology….et al…it certainly seems like the innovation game will keep us all up and running for quite some time to come….

Posted by Navin Rammohan at 09:40 AM | Permalink | Comments (1) | TrackBacks (0)