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February 27, 2014

New ways of branch banking

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The current pace of change in banking can be mind boggling for customers. Much of that change is due to the influence of the retail sector, and banks' implementation of "retail style" banking to cater to the new generation of customers.

To be sure, banks need to attract the younger demographic segments, as they are the source of future revenues. The younger generation is accustomed to retail-like consumption experience, such as the one provided by malls and interactive smart stores. These customers, being highly digitally driven, will expect to use digital channels like Internet and mobile for regular banking activity. But when it comes to more complex or significant transactions, these customers will feel the need to visit their bank branch to seek advice and guidance.  

That being said, bank branches cannot hope to cater to next generation customers in the age-old way. They should prepare strategies for making retail banking more customer-centric with the help of innovations based on smart banking technologies and best practices from around the world. This could well call for going the way of retail - with branches in supermarkets and malls, smart stores like those from Apple complete with touchscreens, self-serving kiosks, 'muzak', and live video help from banking specialists and advisors.

However, while looking to secure their future revenue streams, banks must not neglect the interests of their existing and traditional customers. This means that they must change branch banking in other ways too.

For instance, banks should effectively utilize smart banking technologies and practices to provide access to all the details of the customer relationship, such as credit scores, banking history, and other accounts held. This can be augmented by offering access to software that predicts customer preferences and future banking service requirements based on past behavior. All of these together would help the banks provide more personalized and suitable sales and service offerings in order to retain their existing customers.


February 19, 2014

Cloud: Clear Opportunity for Banking

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The transformational possibilities of the cloud model have started to outweigh security and governance concerns in the banking sector. These concerns are increasingly being considered as challenges to be overcome, rather than impediments to cloud adoption.

Cloud empowered banks are integrating multiple technologies, from mobility to social to analytics, into banking strategy to redefine customer experience, engagement and choice. They are also changing traditional IT structures by delivering various functionalities as services to business users.   

Large banks, with the wherewithal for private clouds, have been able to simplify their infrastructure acquisition cycles by shifting to the IaaS model. The logical progression is towards PaaS, where business partners migrate their applications to the same platform that internal users access as a service. Banks will increasingly move towards a standardized multi-tiered solution, comprising a front end, middleware and database, as well as a platform integrating with their administrative and development solutions. 

IaaS and PaaS are also streamlining the procurement and delivery of infrastructure, applications and services. Infrastructure provisioning is much simpler and the resultant efficiency and transparency is changing organizational processes and structure. With the advantage of full visibility into self-service IT consumption, resource usage can now be instantly charged back to the appropriate functions, a process that earlier used to take weeks.  

Software upgrades in the cloud are seamless, automatic and frequent, which is in stark contrast to the long upgrade cycles in an on-premise environment. Imagine the implications for something as vital and large as core banking. That being said, banks and their technology partners are yet to resolve the challenge of delivering customized components of each bank's core banking software on top of the basic cloud solution. 

If there's a downside to the cloud, it is that the transition from on-premise to private to public IT infrastructure is also characterized by the loss of control over service providers. Smaller banks, without the encumbrances of legacy hierarchies and processes, are able to deal with this more easily. The larger banks just need to adapt their internal structures to the reality of multi-vendor IT environments. That's a small adjustment to make en route to huge opportunities in the cloud.

November 29, 2013

Is innovation in your DNA?

The emphasis on innovation has never been more acute; that has been clearly established based on the findings of this year's Efma-Infosys Innovation in Retail Banking study. But the study has also found that the innovation effort in most banks is not supported by a designated central resource or by an organizational framework that brings together employees from across functions and business lines.

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November 26, 2013

The appification of banking

Even as traditional banks concentrate on strengthening their online and mobile channels as a viable alternative to their core brick & mortar proposition, a new breed of direct-only competitors are making their presence felt among retail banking customers. A new study reveals that direct-only is the only category in banking to gain market share amongst customers establishing or shifting their financial loyalties. It is estimated that over the past five years, deposits in this emerging category have grown three times the industry average. 

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November 22, 2013

Shifting the boundaries of innovation

Open innovation, the process of encouraging ideation across all stakeholders to drive enterprise innovation, is gaining traction in a diverse range of business applications - from automotive design to drug discovery. Two banks that are harnessing the power of Open Innovation to drive organization change were featured in the most recent edition of the Efma-Infosys Innovation in Retail Banking study.

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November 19, 2013

Personalize this

Can personalization deliver sustainable competitive advantage for retail banks? It would seem so if one references a study in which up to 70% of global banking customers expressed willingness to even offer up personal data if it could positively influence personalization and service. 

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November 5, 2013

Banking as Innovation

There's a hot new financial startup that has attracted US$ 25 million in seed funding from a veritable who's who of the venture capital world and has already signed on nearly a hundred thousand customers. Except, no one, apart from the founders and the funders, have any idea whatsoever about what Clinkle will actually do. The only information forthcoming from the company is that it intends to disrupt the already hyperactive mobile payments market place. 

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October 25, 2013

Making innovation a culture

Between risk management, regulation and compliance, innovation in banking is essentially an iterated combination of the possible, the practical and the permissible. But then those are the ground rules. And yet 'Culture' trumped 'Regulation' in a bankers' list of the biggest barriers to innovation  compiled by the Efma-Infosys Innovation in Retail Banking Study 2013.

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October 24, 2013

Making IT innovation-friendly

Current legacy IT systems have emerged as the most significant barrier for innovation, across banks of all sizes, according to the Efma-Infosys Innovation in Retail Banking Study 2013. Well, not all banks; IT systems ranked either 5th or 6th as problem areas at around 20% of large and medium sized banks that participated in the study. Nonetheless, they are still the exceptions - either because they have up-to-date systems or are focused on non-IT dependent innovation - that prove the rule.

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October 23, 2013

When IT inhibits innovation

The 2013 Efma-Infosys study on Innovation in Retail Banking clearly establishes that banks are increasing investments in innovation, drawing up detailed strategies to make those investments work, and defining metrics to determine if outcomes are delivering business value.

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October 22, 2013

Taking innovation mainstream

The intent is definitely there and so are the strategies and investments to realize it. The metrics are in place to assess performance and over three-quarters of the respondents indicate that they are getting better at it. That, in short, is the current status of banking innovation according to the 5th edition of the annual Efma-Infosys Innovation in Retail Banking Study.

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July 30, 2013

The human side of the cloud

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Cloud computing is more than just a technology; it's a model for disruptive business transformation. And like any business transformation endeavor, it has to be supported by some fundamental realignment in organization structures, processes and even culture.

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July 17, 2013

What Banking IT Solution Vendors Can Learn From Peer Industries

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The banking IT solution provider can definitely learn a lesson or two from the trends that are emerging from peer industries. An evaluation of the interesting developments in some of these industries, though   unrelated, is food for thought and a source of innovative ideas. 

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May 29, 2013

Sure Prevention is Better than Cure

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Ill-gotten money often gets circulated in ways that obscure its true source. The effort that goes into ensuring this is referred to as "money laundering." There are measures in place that aim to prevent such spurious activities, risk-based anti-money laundering software being one of them. However, its efficacy and that of other internal bank processes and regulations in preventing frauds is worth scrutinizing. 

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April 22, 2013

"Bankalytics" - Banks and Analytics

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In today's competitive landscape, banks strive to increase their market share by coming up with creative and innovative ways to acquire and engage their customers. Unlike banking of yore, present day banks are nimble and look for different ways to understand customer needs based on their actual behaviour and then offer relevant products and services.

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March 14, 2013

People and Processes: Banking Twins

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The idea of a world ruled by machines has inspired many a work of science fiction. That's just one manifestation of man's machine fascination. Another - which is both more real and meaningful - is the increasing device dependence of each generation. The advent of computers has further accelerated this process and it is, today, impossible to think of a sector or industry or facet of life untouched by technology. The banking sector, in particular, has been a major benefactor of technological advances. What remains to be seen is whether this trend will make people redundant in this sector.

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January 15, 2013

'DO IT YOURSELF' Banking

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Like most of my peers, I follow the "self-service way" to complete most routine transactions. Whether it's a holiday or a night out at the movies, I do the booking online. No standing in line, no waiting. The same phenomenon is now taking over banking, with an increasing number of customers branching away from branches. While they would like face to face or assisted service to be at hand when needed, the option of self-service is one of their most important demands.

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November 26, 2012

Modern day banking: first thing in the morning, last thing at night

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Groggily, Jovy reaches for his Blackberry as the blinking trackball catches his eye. The screen reads "3 New Messages". It's already eight in the morning and he has to rush. He runs through the messages. The first is from his fiancĂ©e. The other two are from his bank; one regarding his salary credit, the other about a monthly debit towards a recurring deposit. 

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November 20, 2012

Green, the new black

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Since it burst into our collective conscience in the sixties, modern environmentalism has become an increasingly dominant motif in policy parlance. For businesses this translates into the need to make green integral to business strategy rather than managing it as an incidental or tactical activity. 


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