Finacle Blog

I agree that we want our banks to be safe and conservative, but as a technology buff, I can't help wishing that they were a bit more adventurous. While industries from manufacturing to retailing have put social media and cloud computing to innovative use, banks have held back, perhaps more than they should.
At this rate, new computing technologies will only put more distance between banking and other sectors.  I can name three - touch & motion, 3D and greater mobility - which have the potential to revolutionize banking if only banks would let them.
Years before Apple devices made touch mainstream, technology companies were envisioning the bank of the future, where staff and customers would navigate various processes using touchscreens. Touch has finally taken root, but even before it can penetrate banking, there's new 'motion sensing' technology, which might render touch redundant! While touch may still survive, because it's hard to make extravagant gestures in public places, it may well spell the end of the keyboard, mouse, and Internet banking as we know it.
It's easy to relate 3D with high-octane entertainment, but not to banking surely?
Well, all it takes is a little imagination. A customer logs into his virtual '3D account'.  The account statement is displayed on the left 'wall.' He taps an icon and debit transactions are flashed on the right 'wall'.  He summons a bank executive to a video chat by tapping his avatar. The video displays on yet another 'wall'. With a lot of financial advisor and expense analyzer options available online, imagine doing the data visualization in 3-D!
The question is, will banks see it this way?
The tablet has ushered in a new category of mobile devices, even edging out the laptop in certain situations. How will 'better mobile' devices of the future, relying mostly on the cloud, impact the business of banking? Are we returning back to the days when the Home PC and the Business Computer were two very different devices? Will PCs and desktops go away or become exclusively 'business' computing devices?
To those who say that these ideas are far-fetched, I answer in John Lennon's words, "You may say I'm a dreamer, but I'm not the only one." Do my fellow dreamers have any other ideas about how banks will fare in a new world of computing?

Posted by Balwant C Surti at 7:17 AM | Permalink | Comments (0) | TrackBacks (0)

It's amazing what you can tell from a click pattern.
Banks are spending big money on analytics to uncover the hidden meaning of their customers' pattern of activity on Internet, mobile and other online channels. With more customers doing their banking away from the branch, a huge amount of data is being generated at online touch points - rich fodder for online banking analytics solutions, which analyse customers' clicking and navigation behaviour to produce insight and predict outcomes.
By deploying this knowledge into their innovation strategy, banks can achieve multiple objectives including channel optimisation, product customisation, right selling and fraud prevention.  If you're wondering how, the following examples may clarify: A) From the click pattern, it is possible to identify the most popular transactions on different online channels and the peak period of traffic - information which may be used to improve efficiency during peak hours through load balancing. B) A customer's search pattern could indicate an unmet need, which is a cue for the bank to propose a relevant solution. C) Frequently declined credit card transactions of a creditworthy customer tell the bank that it needs to enhance the credit limit.
But online analytics is not only about what's gone by. Its predictive capability enables banks to anticipate customers' next move once they click on a product or transaction. This knowledge can be used to improve customer service, right selling, lead conversion etc.
While web and channel analytics have been around for a while, we're now seeing the emergence of new disciplines. Fraud analytics alert banks to potential fraud by identifying suspicious activity patterns and grading different transactions, sources and regions by riskiness. Social analytics process the information and conversations on banking social forums to distil valuable insight into customer needs and expectations; there's also speech analytics, which do the same thing with call centre interactions.
However, while current analytics packages are quite powerful, they are not complete. There's an unmet need for an integrated, multi-channel, intelligent analytical solution combining insights from real-time tacit information, historical data and statistical analysis, all in one box. I think you will agree that will be the next game changer.

Posted by Arunnima B S at 7:40 AM | Permalink | Comments (0) | TrackBacks (0)

How many people do you think it takes to manage the bank accounts of a large company? Well, in a 2009 survey, it appeared that 50% of responding corporate firms employed 4 or more persons to focus on this job!

You won't seem as surprised when you realise that even a single treasury division at an MNC might open as many as 70 new bank accounts, close 150, and service maintenance requests for another 950 every month. What is remarkable, is that most corporate organisations still manage their bank accounts manually, (and with each bank separately) sending reams of documentation back and forth, in a process that is inefficient, time consuming, expensive and error-prone.
Hope has arrived in the shape of a collaborative initiative taken up by SWIFT along with global banks and technology companies to 'electronise' Bank Account Management. EBAM or Electronic Bank Account Management enables banks and their corporate banking clients to trade messages in standardised XML, ISO 20022 format for opening, maintaining and closing bank accounts. The thing to note is that with EBAM, a company can manage all its accounts, across banks and geographies, using a single online portal.
By enabling automation, EBAM alleviates all the concerns associated with traditional bank account management. It saves loads of time and effort, is cost effective, and makes it easier for all parties to comply with audit and statutory requirements. Not to forget, it is secure.
EBAM calls for a certain amount of investment towards technology setup, software and integration with back end systems and may be implemented either with the bank owning and hosting a proprietary system that their clients connect to, the exact opposite arrangement, or one in which multiple banks and corporate entities are linked through a common communication standard.
If there's one serious limitation of EBAM, it is that it does not support KYC clearance, hence may only be used by clients with an existing banking relationship. Once that is overcome, the future outlook of EBAM, which already looks bright, will simply shine.
Have you heard of any other innovations in the corporate or wholesale banking space? We'd love to know.

Posted by Arunnima B S at 10:44 AM | Permalink | Comments (0) | TrackBacks (0)

It may have come to the forefront in the aftermath of the Global Financial Crisis, but optimization is hardly a new concept. Banks have been optimizing their operations - a series of processes that have basically stayed the same, yet evolved over time - since decades. However, in the last few years, the banking context has changed suddenly, dramatically, to underscore the need for operational excellence.
And it's not just economic conditions that have changed. Customers have evolved into informed buyers, and consequently raised their expectations from financial service products and providers. Today's customers wants only best of breed products in their financial portfolio and are willing to enter into multiple banking relationships (with providers of those best of breed products) if need be. They're also saving rather than spending.

The fabric of competition has changed, with niche and non-industry players from other domains entering the business with innovative business models.

Last but not least, the crisis has forced an almost unprecedented strengthening of the regulatory framework, which is now monitoring many aspects of banking, including the charges being levied on customers.

All these developments have put pressure on the customer to product ratio as well as diminished opportunities for revenue realization. Thus, more than ever, banks that survived the crisis as well as those trying to, are working on improving operating efficiencies to compensate shrinking margins.

In the past, the term 'efficiency improvement' was a euphemism for cost cutting. While cost control is still important, its perspective has changed to one of restructuring rather than blunt cuts.  Now banks want to understand how costs are incurred across the value chain before deciding what to cut back. But more than that, they are keen to optimize their operations, and obviously the underlying processes, to derive higher efficiency.

These are some of the things they could do:

Differentiate between normal and exceptional: Currently, banking processes err on the side of caution, prescribing checks and balances even when not required. Banks need to sift critical processes - which need a secondary check or authentication - and work on streamlining the remainder. For instance, they could allow bank draft requests to be made over email, getting the applicant to specify all details including which branch he would like to pick up the instrument from, instead of expecting him to visit the branch twice - first to fill an application and then to collect the draft.

Posted by Sai Kumar Jayanty at 11:22 AM | Permalink | Comments (0) | TrackBacks (0)