Paradigm Shift

Best Practices & IT Solutions for Banks in 2012

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Agenda
Current Scenario Financial Services IT Trends in Financial Services IT Financial Services Transformation Case study

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Financial Services IT Current Scenario

Banks & Insurance Cos have completely implemented CBS & Core Insurance Most banks have Internet and mobile banking channels though limited in functionality compared to the potential available Basic Basel II risk management framework available essentially standardized approach Treasury function in Banks is well developed but not online with respect to limits management, exposure and liquidity risks. MIS is moving towards BI Centralization of back office is starting to happen CRM is limited to the contact center and service functions Infrastructure outsourcing is common and banks are thinking about applications and process outsourcing

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Financial Services IT Current Scenario

Intelligent BI leading to Predictive Analytics Financial Services organizations have a lot of data. How to make use of that data effectively in everyday tactical decision making and in long term strategic planning where predictive inputs are essential ? Integrated Channels How can the outputs of the analytics engines be used at the teller, at the Customer Service Rep and in the self service channels Flexibility Business wants to be able to offer new products faster and adapt to market changes faster Increased use of alternate channels Customers are becoming more internet and mobile savvy. Alternate channels are becoming a differentiator now between banks Regulatory compliance Need for more transparency and real time data; Need to adapt to these requirements (Basel & Solvency) Fraud Management At multiple layers money laundering, card frauds, eCom frauds, EFT frauds etc

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Trends in Financial Services IT

REGULATORY

CUSTOMER

OPERATIONS TECHNOLOGY

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Customer Centricity

Trend
Drive intelligent customer interactions Leveraging alternate channels Consistent & Seamless interaction across channels with business insight

IT Impact
Channel transformation
Improving self service at conventional channels Increased sales & service at Branch Single view through EAI Unified Front end & Integrated CRM Mobile Banking (Retail , Corporate & SMB)

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Customer Centricity

Trend
Identify Cross Sell/Up Sell prospects Connecting offer to the right segment Efficiently execute campaign Measure campaign rates

IT Impact
Customer segmentation tool Predictive Analytics (Mining tools) Analytical CRM to implement a repeatable, closed-loop process based on customer behaviors and event-driven alerts

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Regulatory Compliance

Trend
Enterprise Risk & Performance management : Basel II --- > Basel III & Solvency II for Insurance Enterprise-wide monitoring, investigations, and reporting for suspicious activities More holistic view of accounts, customers, transactions, and entities Proactively monitor and control Enterprise Fraud (Cheque/deposit, Online Payments Fraud. Card Fraud)

IT Impact
Integrated Risk Management solution across 3 Pillars of Risk, Liquidity Risk & ALM/FTP Real time Anti Money Laundering Enterprise Fraud Platform with predictive analytics

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Technology Centricity

Trend
Increased Straight Through Processing (STP) Workflow-based payments processing architecture with cross channel view Provide a single source of truth for customer data

IT Impact
Enterprise Application Integration Platform Payment Hub Enterprise Customer Data Hub as a Data Warehouse through effective Data Quality & MDM tools

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Operational Efficiency

Trend
Reduce Operational Risk (Internal) with effective controls Improve employee utilization & productivity Enhance Internal controls across heterogeneous source systems

IT Impact
Strong Financial Management solutions to streamline Financial supply chain HR Analytics Financial Accounting Hub

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Banking Transformation Roadmap

Expand Prepare for Growth
Channels Increased STP Mobile Banking Workforce optimisation Customer Flow Management in branches Multi-channel integration Applications FAH and payment hub ACRM & Customer Intelligence Advanced Analytics Automated Reconciliation EAI and BPM Financial Consolidation, Budgeting and planning Fraud analytics

Channels Internet Banking Branch & Teller Automation Branch and ATM network expansion with green IT Applications Applications Operational CRM Core Banking & Channels ALM, FTP, Profitability Support Transaction systems like Data warehouse Loan origination, credit scoring, Dashboards and Performance mgmt Treasury,Trade Finance etc. BASEL II Advanced approach BASEL II Standardized approach ERP (HRMS, Financials) Enterprise reporting EAI, DMS and Workflow automation Infrastructure Infrastructure Network consolidation & E-WAN Remote Infrastructure / Application setup monitoring Virtualization (Desktop / Server) Migrate to SaaS/ PaaS SaaS for non-critical applications (e DR implementation mail) ADMS and TOS

Consolidate

Start
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Expansion
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Differentiate/ Grow

Transformation Considerations
Architecture and applications should be Future Proof at least 8-10 years Centralized deployment, web access Straight through processing ability (ESB based integration, security framework) Flexible architecture - ability to re-engineer processes and add functionality seamlessly Open standards platform, database, application code, integration Single view of customer, single data repository, predictive analytics Platform to support regulatory requirements [Current & Future] Local Central Bank, Basel II, Basel III, KYC etc.

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Typical Transformation Architecture

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Enterprise Data Management & Risk Management Solution for a Leading Banking Group in Bahrain
The customer is a leading commercial and investment Banking group (spread across 8 Countries $60 Bn Asset Size) providing wealth management, retail, corporate, treasury and private banking services. Customer wanted to setup Group-wide enterprise data management solution with primary focus on Credit MIS, Financial Performance, Asset Liability Mgmt (ALM) and Funds Transfer Pricing (FTP) solutions.

Business Drivers
Group-wide Enterprise-wide data management solution to store and retrieve data at right granularity, definition and frequency. Enable single-version of the data across Banking group located in different geographies. Enable a single view of customer (Risks and Returns) Ability to produce Account & Customer level profitability Reduce Business users dependency on IT department. Timely generation of compliance and internal management reports. Design system to handle Financial Consolidation. Adhere ALCO compliance requirements on liquidity and interest rate risks.
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How Wipro helped

Customer engaged Wipro from Inception to provide end-to-end services which included formulation of EDM strategies, defining scope of work, selection of products and full life cycle implementation. Wipro proposed SAS suites of products for Data management, Data integration, Business Intelligence, Credit Risk Modeling, Profitability (Waterfall), Customer Intelligence, ALM/FTP and financial consolidation. Wipro successfully delivered EDW, Credit MIS and Financial Performance solutions. Currently these modules are in UAT phase ALM/FTP implementation is in progress. Customer also engaged Wipro to formulate Business Intelligence Competency Center (BICC) for ongoing sustenance of EDM
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Benefits
Enhanced processes, effective data management & Centralized MIS helping in effective decision-making capabilities at Group level. Flexible user friendly OLAP capabilities enabling Group for effective monitoring and tracking of their Credit portfolio. Multidimensional analysis of exposures, limit, collaterals, liabilities, provision and profitability across Customer, LOB, Product, Account and many other dimensions. Provide capability to conduct Net Interest Income Analysis based on accruals generated by Cash flow functions with the possibility of decomposition into FTP components and client margin. Automation of Financial consolidation at Group level.

Large Banking Group in UK

Customer One of the Large UK High Street banks Net Assets circa 1.027 Tn 146,000 employees; 35mn retail & 1 mn Commercial customers Circa 9,200 IT Employees Functional Areas Credit & Debit Cards Group Data Warehouse Payments General Insurance Customer HR, Finance & Procurement Wealth & Investments Fraud Management Objectives of Relationship Improve flexibility & quality of IT technical delivery Overall, deliver an improvement in Time to Market, Quality and Processes ->> enhance IT Effectiveness Strong delivery partner in IT & beyond Become the strategic partner of choice for signatureTransformational Programmes and deliver value Partner in banks vision to be UKs best financial company

Services

Client Offshore Pgm Multi offshore vendor strategy Joint discussions regarding operating models to leverage Wipro best practice Immediate reduction in ongoing costs of IT (BAU) Release of latent business demand for IT services Phased outsourcing across the IT delivery organization

Application Development & Maintenance Production Support Architecture Consulting Infrastructure Services Testing Services Process Consulting Business Analysis Release and Configuration Management

Critical Parameters Billable Wipro FTEs 946 Current ADM Steady State OnsOff Mix 20:80 Avg. C-SAT rating 6/7
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Highlights Started engagements Presence across 10 Lines of Business, Infrastructure, CIO and EAD Services Focus on matured engagement and outcome based delivery

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Thank You

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