Industry trends, viewpoints and thought leadership articles. Read what the experts in banking and technology have to say.

New Thought Papers

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• Leveraging IT to Win in Bancassurance Segment
• Wealth Management: The New Revenue Frontier for Banks
• Modular Solution, Modular Implementation: A Stand-out Option for Medium-sized Treasuries
• Taking the Financial Inclusion Agenda Forward
• How Successful Banks Build their Innovation Strategy
• Incremental Innovation: 7 Small but Sure Steps to Success
• Partner Portal: Core to Partner Relationship Management
• Solving the "Cross" word puzzle PERSPECTIVE – An integrated approach to cross-selling
• Product Bundling: A Banking Perspective
• A Compelling Case for Channel Innovation

 

 

 

Banking Innovation

How Successful Banks Build their Innovation Strategy

Banks need innovation to sustain in future. Corporate and retail banks are facing competition from new entrants and innovative business models. If that wasn't enough, shrinking margins and tighter regulatory requirements are adding to the pressure.... Going forward, innovation is perceived as the key to growth and competitive differentiation. Only those banks that can successfully develop new products, services and channels in response to the changed market environment will survive. This is echoed by the findings of a recent survey of European retail banks conducted jointly by Infosys and the European Financial Management Association (EFMA), which state that 4 out of 5 respondents said that innovation was extremely important for achieving growth and efficiency.

Incremental Innovation: 7 Small but Sure Steps to
Success

Innovation is a powerful weapon of differentiation for financial institutions. In recent years, banks have innovated on their products, processes and channel infrastructure to achieve multiple objectives such as raising operational efficiency..., improving customer convenience and accelerating business growth. So how do banks decide what and how much to innovate? The following list of incremental banking innovations propose some answers...

Core Banking

Get More from the Core: Drivers of Back-office Transformation

In the recent past banks were esoteric institutions that acted as custodians of cash and handed out loans. Today they have been transformed into dynamic, multichannel organizations that strive to continuously bring innovative products to the marketplace.... All this has been done in order to improve profitability in the face of relentless competition and increasingly savvy customers. The globally mobile customer is demanding low cost tailored products across multiple product channels. There clearly exists a need for banks to move from being product-centric to customer-centric. Unfortunately, the legacy systems, currently prevalent, lack the agility, flexibility and scalability needed to meet today’s challenges. Thus, they fail to provide a foundation for future growth.

To counter this, banks need to modernize and transform their core banking systems by moving towards a centralized back-office and standardized processes, or they run the risk of paying a heavy price in terms of higher costs and lower profits. At the same time leveraging SOA (Service Oriented Architecture) for IT will enable product bundling, cross-selling of products and service customization. With centralized SOA, banks can use data mining techniques to analyze customer behavior, thus creating cheaper, innovative and differentiated products.

This paper describes the drivers for transforming legacy core systems and examines various factors a core system needs to address to ensure a flexible banking operation.

Payments Business 3S Approach

Payments - the numero uno facet of a payment system, enables the circulation of funds. Without a robust infrastructure enabling smooth flow of funds, financial institutions can rarely assume the role of a financial intermediary in the economy.... In order to confront the numerous parallel players in the remittance market, banks need to maintain a payments system infrastructure and refine the processes and practices of delivering payment services. This will ensure better turn around time of payment cycles with faster availability of funds to customers. Banks have traditionally treated payments as a specialized stream and segregated the process from other banking business flows. This has led to the multiplicity of payment acquisition channels and a plethora of payment networks.

Now banks can capitalize on the payment hub architecture through a payments system model which is integrated with the core banking solution. Realization of this would pose survival challenges to average products in the market and cultivate value propositions for innovative products by scripting successful alliances with customers on one hand and technology partners on the other.

This paper describes the 3S objectives - Speed, Security and Standards that the payments market across geographies is witnessing and highlights why an integrated payment module is required to centrally manage the work flow of payment processes.

The Core Banking Juggernaut Rolls On

Tier 1 banks are taking the lead and embarking on a total overhaul of their core processing platforms. The verdict - new age core systems are leaving an indelible imprint on the banking landscape..., at least to the extent of gaining acceptance and engulfing few legacy systems in its wake. This article seeks to highlight some of the trends in the core banking space and what the next year holds out for the banking industry. In the near future one would see a complete confluence in the paths of banks and independent software vendors through the role of core banking systems. This shall be done in the quest to redefine their very existence, and for banks to survive and flourish in an intensely competitive and globalized landscape. There is a focus on factors that will have attained considerable significance for contemporary banks and will be the key drivers in selecting the platform that will power banks into the next orbit and beyond.

The paper also draws attention to the strategic challenges before the bank’s stakeholders as well as some of the critical success factors that banks need to be mindful of in order to derive the maximum out of their core banking transformation initiatives.

Key Challenges in Core Banking Replacement

Successful banks are those that understand the potential of new technologies. They align themselves to fully leverage the powers of these technologies by focusing on the adaptive changes that make the technology transformation process successful.... The current competitive environment with increasingly demanding customers is forcing banks to take a reality check on the technology environment and ensure that their IT strategy is aligned to their business objectives. And core banking replacement is often the only solution.

Herein banks need to be mindful of challenges like vendor capabilities and dependency on legacy applications which are generally associated with core banking deployments and replacements. These challenges once understood and mitigated properly can result in the bank leapfrogging to a high degree of differentiation and providing an enriched customer value proposition. On the other hand, it can also create considerable risks for the bank if the transition is not managed properly.

This paper details the key factors banks need to focus on, to enable them to make the core banking transformation a successful experience.

Managing Risks In Core Banking Replacements

Core banking replacement has for quite some time been considered fraught with high risks. The costs are potentially bordering on the prohibitive and many still believe that their present in-house systems are satisfactorily serving the purpose.... But the wind is changing direction and fast. There is a rising acknowledgement of the fact that banks, irrespective of size and geography, face the dual challenge of cutting costs and increasing their internal efficiencies. This is done with the ultimate aim of improving margins which are clearly under strain. Though it is easy to select a vendor for implementing a solution, the challenging part is carrying the project through to a successful implementation. Current requirement is for an experienced vendor with impeccable implementation credentials who has in the past managed all such challenges well. Banks thus need to take a holistic view while considering the replacement of their core banking platform.

Risks need to be mitigated and managed and following this line of thought, this paper delves into the risks that banks should take cognizance of before embarking on what is clearly going to be the single biggest technology initiative within the bank.

SOA Plug-and-Play Services

Shifting economic conditions and rapidly evolving IT strategies along with mergers and acquisitions have left few banks with an appetite to untangle the morass of legacy systems running their businesses.... But this, thankfully, is not holding up progress and innovation, thanks, in part, to the increased adoption of Web services and its conceptual cousin, the Service-Oriented-Architecture (SOA). SOA is neither a product nor a solution. It is an integration framework that binds internal and external services to create a solution. With SOA, instead of focusing on different applications that reside on different computers, the emphasis is on business services that represent several different underlying applications. As SOA can seamlessly be put into practice in existing IT environments it ensures that changes in technology and processes during core banking replacements can be phased out and managed effectively.

The plug-and-play benefits of SOA and Web services promises to increase the pace of innovation in financial services. Clearly, by adopting SOA and process driven core banking solutions banks worldwide can achieve tremendous benefits. Following this, this paper describes a banking solution framework which depicts how SOA delivers maximum agility.

Banking Transformation

Demand Deposit Account (DDA) Framework with Proven Resilience

U.S. banks, collectively holding over US $7 trillion in deposit accounts, are highly reliant on their DDA technology frameworks. These solutions must be able to keep pace with the evolution of deposit accounts in terms of number, size, variety and complexity. ... Moreover, the staggering volume of deposit accounts and related transactions is growing at a sharp pace as customers seek to park their money in safe avenues. Clearly, the efficient management of deposits is dependent on the resilience and flexibility of the technological solution.

Banking Efficiency Beyond Cost Cutting

For the banking industry, which finds itself in the eye of the storm, the need to raise efficiency has perhaps never been more crucial. Although cost cutting is the first thing that comes to mind, impulsive slashing of expenditure across the board could actually do more harm than good...While there are several ways to trim the fat, not all of them are appropriate for all banks. Banking institutions need to realize that there is no one-size-fits-all solution to cost cutting; they need to do a great deal of analysis to arrive at the one that works best for them.

A successful banking efficiency optimization plan must look beyond mere cost cutting and draw upon a combination of the different strategies. Important as it may be during good times, the improvement of banking efficiency assumes paramount significance during bad. However, this calls for more than cost cutting – an indiscriminate slash and burn approach will not provide the right answers. 80 percent of cost savings can come from 20 percent of expense items; therefore, banks need to do some careful analysis before arriving at those that present the best opportunity. That apart, they must institute a host of measures to ensure all-round productivity.

Make Risks Work to your Benefit: An Integrated Banking Platform-led Approach

Banks must launch a strong drive to create a risk-oriented culture, in which there is shared awareness across the enterprise about risk exposure and suitable defense measures. Core banking systems built on open standards can add teeth to banks’ risk management capability but providing enterprise-wide, comprehensive, “single version of the truth” data..., essential for arriving at the right decisions while assessing and managing risk. By enabling automation and Straight-Through-Processing, they can also mitigate operational risk.

Going forward, it is predicted that risk management will assume greater dimensions as banks seek to maximize risk-based economic value.

How Canadian Banks can Manage Diversity and Inclusiveness to Win

The pursuit of pro-diversity and inclusive policies in banking is no longer a mere public relations exercise. The influence of the visible minority in Canada is on the rise; therefore, no business model can stand without catering to the needs of this important segment.... Most banks have caught on, and have instituted policies to ensure representation and fair treatment to members of minority and marginalized groups, whether employees or customers. Going forward, the effectiveness of diversity and inclusion initiatives could well differentiate the successful banks from the rest.

Agile Banking: Leverage the Integrated Banking Platform

The ability of banking institutions to respond swiftly to change becomes all the more important during times of upheaval. Banks are continuously subject to change-bearing forces that could originate in the economic, regulatory, market or technological environment. Often, a dynamic market situation may necessitate decisive counter action – at these times, banks can ill afford to react sluggishly....

Unfortunately, there is a very real danger of that happening in the case of banks that are burdened by fragmented, legacy systems. When multiple systems operate in silos, they seriously hamper banks’ agility to respond to change. Moreover, it is likely that such systems are riddled with complexity and redundancy, presenting banks with a distinct set of challenges. The answer may well lie in the adoption of an Integrated Banking Platform. An integrated banking platform provides solutions at every step of the change response process - from gathering change-related information till effecting transformation.

The Direct Approach to Growth

Running a bank in these trying times is likely to be one of the most challenging jobs one can have. With the stalling economy, south-bound markets, tight credit, and massive cross-sector job losses, there just does not seem to be enough money, demand and hope to go around.... But direct banking can help a financial institution grow its customer base in these difficult times. By keeping customers happy - providing them with the best possible experience and high deposit rates, and meeting internal banking imperatives, a direct bank can break into new markets effectively.

Customer Experience-led Approach to Transformation

Banks worldwide are facing a crisis of confidence. According to a nationally representative survey in the US, less than half the customers had confidence in the financial security of banks – not a faith-inspiring number when you consider the fact that this survey was conducted a week before the Lehman Brothers filed for bankruptcy.... The sub-prime fiasco, Madoff scandal and subsequent market downslide have destroyed customer faith and trust in financial institutions. They are worried about their savings and investments and will not think twice about pulling out their money from banks if they fear its safety is at risk.

Process-led Approach to Transformation

As banks strive to satisfy customers and stave off competitors in these unsettled times, those with legacy systems and processes may be faced with the inevitability of undertaking the transformation journey.... One of the biggest deterrents to this pursuit is banks’ perception of risk associated with such deep-rooted change. However, by taking a risk-managed approach to transformation, in consultation with the right partner, banks can mitigate their risk exposure at every step, and progress towards a successful outcome.

Technology-driven Superior Customer Experience

In a recent global benchmarking study, respondents from banks located in 15 countries rated management of customer experience as the single largest factor for success, yet admitted that their performance in this area left more to be desired. Banking customers seem to agree with this view.... Their willingness to recommend their bank to others was among the lowest of all industries, in every market that was surveyed. While most banks realise that quality of customer experience is critical to their ability to retain customers and acquire new ones, only a few are able to render more than lip service. Delivering excellent customer experience requires enterprisewide orientation towards this goal, and that means integrating the front office with operations in the middle and back office – the good intentions of many banks fall by the wayside when faced with the enormity of the task.

Products and Services Innovation-led Approach to Transformation

It’s rough sailing for financial service providers in the wake of the enormous global turmoil. Hallowed institutions crumbled in a matter of days, and those that are still standing are scrambling to survive. In an environment of extreme uncertainty, banks are doing all they can to maintain their edge over competition – rationalizing costs, downsizing, innovating and importantly, managing risk.... More than ever before, they are seeking newer, more efficient ways to service their customers better.

To last out this period of pain and emerge stronger in a happier future, banks will need to be resilient enough to withstand the disruption that will arise broken only by shorter periods of stability. They need to be adaptive enough to deal with shifting business paradigms and agile enough to meet the demands of their customers within shrinking time frames. And that calls for transformation. The writing on the wall is clear – to win during adversity or “in the turns”, banks must either shape up or ship out.

Transform Your Core: Risk-managed Approach for Turbulent Times

Core transformation enhances a bank’s business prowess by empowering it with flexibility and scalability, ease of IT management and an enhanced customer experience. It lowers costs and makes the business future-ready by laying a solid foundation for effective opportunity management in a changed environment and driving growth....

However, to realize these benefits, banks must transform by adopting best practices and partnering with a proven transformation partner to guide them through the challenging process. After all, if you are changing your Boeing’s engine mid-air, you need the best pilot and technician in the business.

Make Products Work Harder in Tougher Times

Buffeted by the rough winds of the continuing crisis of confidence and the dismal economic scenario, banks cannot afford to operate as they did during days when credit, cash and confidence were readily available and customers were relatively happy. Nor can they freeze the organization, and keep from innovating and launching new products, thus slipping on retaining and gaining customers....

Today, banks need business more than anything else – for survival, sustainability and growth. And to garner business, banks must take a host of measures, including creating personalized products, streamlining operations, and leveraging a more agile IT landscape. However, this must be achieved when resources are limited, competition is fierce and customers are distrustful. Surrounded as they are by tight credit, collapsing companies, bad loans, risk-averse investors, and nearly nonexistent margins, this is a challenge indeed.

Multi-channel Integration. Transforming Channels for Profits

As customers interact with their banks over a variety of channels, they demand a consistent and rich experience, regardless of the channel. A bank can deploy several innovative means to streamline the channel experience to achieve long-term sustainable profits....

As products change, a big expense is tied to rolling out the product separately across channels. However, integration can ensure that the change is made only once, but reflected across all channels. Multi-channel integration can help a bank lower costs since it involves a scalable technology platform, automation and cutting of duplication. Moreover, multi-channel integration provides customers the option of using more cost-effective channels which are also user-friendly and convenient.

What Banks Can Do Now: Transform to weather the tough times

Know the 9 steps of the journey to financial health, a bank must follow one principle – integration. A bank needs to integrate its IT landscape, its approaches, products, business models, processes... , customer knowledge - all the wide-ranging components that help it function as an effective whole. The move to integration can be an incremental one, but the beginning must be made.

Transformation: Enabling Customer Retention During Tough Times

It is clear that banks will need to retain their customers to ensure a sustainable business. But how are they to do that? To meet this challenge, banks must transform their customer retention strategies, supported by technology. ... Let us go down this transformation path, milestone by enabling milestone.

Integrated Platform: Where the Future Lies

Silo-based IT systems create operational complexity and redundancy that can increase costs and diminish the bank’s ability to respond to change. Banks can no longer ignore the fact that a unified and common information architecture representing its identity..., brand and image is as essential as the functionality it provides.

An Integrated Business Platform translates into standardized and enterprise-wide common information architecture, aligned seamlessly with a bank’s business strategy. It connects processes and information in a way that allows banks to flexibly react to the dynamics of customers and competitors.

The IBP has proven advantages and banks need to consider migrating to such an infrastructure. However, building an integrated setup need not be a risky undertaking. If fused in a phased manner with the help of a trusted transformation partner, the IBP can offer banks what a best-of-breed solution cannot – ease of use, agility, happier customers, lowered costs and increased profits. It can bring the different departments in a bank in sync with each other to pursue a common goal and enjoy a common ground for negotiation with the single vendor. This brings in much-needed standardization across the organization.

A Framework for Business Transformation for Mid-sized Retail Banks

The flat world dynamics today are increasingly enabling large global competitors, who are nimbler, innovative and more cost effective, to play in any market regardless of size or location.... In the face of such challenges mid-sized retail banks need to look towards business transformation solutions that can provide them with high level of automation in both the front and back office. This will need to be supported by a robust technology platform. Business transformation would provide the mid-sized banks with higher operational efficiency, the ability to tap into new sources of income, scalability, innovation, agility and moreover a lower total cost of ownership (TCO) of their IT infrastructure.

This paper details the various traditional approaches to technology led transformation. It highlights why mid-sized and small banks would benefit from technology solutions that come with integrated implementation framework comprising of essentials like pre-configured banking products, processes, templates and detailed documentation.

The paper also highlights the various features a bank-in-a-box solution provides and explains why in its optimal form bank-in-a-box will be a dynamic solution that evolves with the changing needs of banks thus arming them with the knowledge of best banking practices, processes and standards.

Transforming to Win

Globalization, demographics, technology and regulation – these factors have made the world a flatter place. Banks need to achieve a shift in their strategic and operational priorities and this can only be done... if they effectively leverage technology. The requirement of the day is that banks should create a technology ecosystem that surrounds the business needs. In order to do so banks should change their approach to upgrading technology by moving from core banking replacement strategy to core banking led transformation strategy. The perfect technology framework would be one that goes beyond mere technology enablement and drive banks towards making strategic shifts in order to win in the flat world. Such a framework should offer banks a process roadmap to move towards the flat world through logically phased integration. This paper highlights the various lifecycle stages that provide a flexible approach to lead the transformation initiative, from visioning to deployment.

Successful banks are those that have understood the potential of new technologies and aligned themselves with able partners to fully leverage its power. These banks have focused on adaptive changes that make the technology transformation process successful. The paper details why transition of the vendor to ‘trusted transformation partner’ with end-to-end capabilities and credentials is vital and describes the key aspects that should drive vendor selection.

Trends in Banking

Taking the Financial Inclusion Agenda Forward

For financial inclusion to live up to its promise, the benefits of the country’s economic process must be shared with its unbanked masses. Inclusion must go the way of Internet and mobile banking to encompass a full gamut of financial and non-financial services including..., but not limited to, crop loans, health insurance, welfare programs, investment products and more. Importantly, any inclusion initiative must pay heed to the specific needs of the audience, such as easy accessibility, simplicity, flexibility in terms of use and identity management. Although banks have relied on their own infrastructure and the services of business correspondents from community organizations that are in touch with the end customers on a daily basis, it is clear that a personalized medium is neither viable nor scalable to meet the country’s outreach needs. Even as technology by way of mobile communication, laptops or VSAT helps to bridge this gap, customers must be trained in the use of simple self-service options.

All participants in the inclusion eco-system, including banks, technology service providers, vendors and regulators have a shared responsibility to take the agenda forward. Should they succeed, unlimited opportunity awaits them.

Partner Portal: Core to Partner Relationship
Management

Partner portals provide an excellent opportunity for banks to consolidate all their partners at one place. A well designed partner portal can extend the reach of a bank across borders and across products.... This will not only result in increased efficiency for banks but also help banks in achieving better partner relationship and increased customer satisfaction through integrated servicing option across partner applications. This paper illustrates how banks can leverage their network of partners effectively to achieve a better partner relationship and increased customer satisfaction through Partner Portal.

Product Bundling: A Banking Perspective

The fact that customers have lots of choices before them makes it imperative that banks keep innovating and bring in perceptible value to their customers. Packaging of products and services has the potential to emerge as the next big thing for banks that are looking for innovative marketing and positioning of their products.... Packaging has the potential to emerge as the crucial differentiator in the otherwise level playing field. With the right kind of technology, it is easier than ever before to design and sustain package accounts and banks the world over are increasingly looking at leveraging this to their advantage.

New Segmentation Approaches to Drive Product
Innovation

Banking customers' demands have kept pace with the rising complexity of their needs. They expect banks to address their individual requirements with relevant products and services. This implies that banking institutions must acquire a deeper understanding of their customers at a one-to-one level, and deploy that insight into product and service innovation. Customer segmentation is central to this objective....

Current segmentation practices are mostly unidimensional and based on a single parameter such as relationship value. Although the relevance of relationship value as a measure of customer loyalty is beyond doubt, it cannot be the sole criterion for segmentation. Going forward, banks must refine their segmentation strategy by taking into account a combination of demographic, social, economic, geographic and linguistic factors. Other innovative approaches to segmentation include grouping customers on the basis of financial behavior, customer sophistication or life-stage.

Business Insights for Banks in the U.S to Deliver Results

As banks in the U.S. and elsewhere plot their strategies for a future in the new world order, they can draw upon lessons learned from the past. Going forward, it will serve them well to leverage business insight to the fullest, to create a more efficient and stronger organization...However, that is easier said than done; despite years of experience in data management, organizations have not always been successful in accessing customer data. It is here that the support of a credible technology partner with a proven solution could make all the difference.

The smarter U.S. banks are leveraging business insight to fuel their organizations’ growth, acquire new customers, manage risk and compliance and improve agility. Having the right data is central to the generation of reliable insight and better decision making. Therefore, there is a pressing need to integrate enterprise-wide data, particularly that which pertains to customers. An integrated banking platform allows banks to achieve many of their critical data management goals, and sets them up nicely to transform business insight into meaningful results.

Online Customer Experience: What Works

About 75 percent of American banking customers surveyed during an October 2008 study reported using online banking to keep track of their expenses. Not surprisingly, a similar number confirmed that they were watching their finances more closely during the current economic downturn.... Online banking reported the strongest growth among all channels customers wanted to watch their finances more closely, at least cost, and online banking served both ends.

This means that although business volumes may be down, customers are paying more attention to their banking activities. Importantly, this opens up opportunities for banks to intensify their customer relationships, albeit in ways that are not immediately measurable in dollar terms. To do so, banks must maximize the impact of every customer interaction, delivering a unique and memorable experience.

Making Banking Innovation Count

Banking innovation is subject to closer scrutiny during tough times when there are larger hopes pinned on favorable outcomes, and greater concerns regarding resource utilization. Arguably, service and product innovation are at the forefront of most change-bearing initiatives....

Banks are under unprecedented pressure today – from customers demanding more for less, from regulators expecting tighter compliance and from competitors vying for market share. In order to stay on top of their game, banks need to take innovative action, and make it count. That calls for some lateral thinking, and they may do well to look at innovation in other industries or geographies for inspiration. By leveraging the collective wisdom, techniques and technology at their disposal, they can emerge winners, ready to face a brighter future.

Managing Client Relationships in Challenging Times

Relationship managers at banks are going through a tough phase in their career. They have the seemingly impossible task of retaining clients who are becoming increasingly jittery in the face of steady asset erosion.... To add insult to injury, some banks have raised fees in order to compensate for losses – and it falls upon the relationship manager to convey the news to clients. The relationship manager is once again the bearer of bad tidings in case of a margin call arising due to a sharp drop in an equity portfolio.

Therefore, it is no surprise that clients, who rarely call during boom times, are now demanding accountability from their relationship managers. It is critical that relationship managers handle their clients' expectations very carefully in this tenuous environment.

Social Networking: New Opportunities for Banks

Web 2.0 has already made a huge impact on human interaction. Now, it is up to individual banks to craft creative strategies that will help them make the most out of Social Networking, Social Commerce and Social Media opportunities. Recognizing the potential of this technology..., forward-thinking banks have appointed dedicated teams for channel development under the leadership of a Chief Channel Officer. No doubt there will be many more initiatives in the days to come. Those banks that taste early success will be better placed to march ahead.

Getting IT Right after M&As

A slew of shotgun weddings are being consummated between banks in the aftermath of the global meltdown. Wells Fargo has bought Wachovia, JPMorgan Chase got its teeth into Washington Mutual, and Bank of America snapped up Merrill Lynch - just three among several couplings....

Dictated by the needs of market consolidation, competition, globalization, and regulations; cashstrapped sellers, bargain-hunting buyers, and interventionist governments are buying into a new future though rapid-fire mergers and acquisitions (M&As). In fact, governments around the world gobbled up $242.5 billion of stakes in financial institutions in October. Finance M&As in the US totaled $180 billion.

Go Direct for Deposits

In this increasingly demanding world, banks are traversing a rocky road and need every deposit that a customer may make. They face both economic and business hurdles.... The consumer may have very little to save and, consequently, banks will get lesser money to put in their coffers. Even in these trying times, bank customers continue to be discerning, asking for exemplary service, convenience and tailored products. As they face the economic reality of slowing growth, high prices and lower wages, customers are more savvy than ever and willing to switch their business if they do not get value for their money. Banks are asking themselves: How can we cut costs and increase deposits even as growth slows, inflation soars and customers demand more?

Branches were set up as primary customer touch points, and, as the need for convenience increased, banks turned to ATMs. However, both require the bank to invest heavily in infrastructure and manpower, while customers need to travel physically to transact business. With the advent of direct banking, banks have a service delivery mechanism that ensures several advantages – both for the bank and customers. Direct banking offers financial institutions economies of access. Customers can reach the bank in cyberspace at any hour and from anywhere, thus offering them absolute convenience. On their part, banks can ensure customer delight in a cost-effective manner.

This paper brings to light the various steps a bank can take to turn their customers into bigger depositors. The paper also discusses how innovation and agility can help a bank meet challenges like increasing competition, rapid technological evolution, and the race to grow deposits.

Win the Global Challenge: Consolidate and Standardize

Banks are striving to win in a daunting new world – brutal competition, low margins and customers who want everything and more. The rapid opening up of emerging economies ... and the saturation of developed markets have banks scrambling to tap emerging global opportunities. A reverse osmosis from the developing nations is also reshaping the industry, all with a view to attain sustainable growth. As emerging economies open up to offer new opportunities, banks are setting up operations in multiple countries hoping to gain a fatter wallet-share. They are opting to expand their presence by entering newer areas in these countries, taking up ambitious Greenfield projects or extending footprint through mergers and acquisitions. A new trend is emerging wherein local banks are becoming regional and regional ones are growing into global players.

As banks expand to newer markets, their processes and products must measure up to the challenge of compliance with varied regulations. In addition to this, it is imperative that banks stay a step ahead of the next wave of change by gearing themselves with the latest robust technology ammunition.

This paper explores why banks need to leverage IT for competitive advantage and roll out an operating model for technology that allows people and processes to meet a common business objective. The paper highlights that consolidation of IT infrastructure and standardization of products and processes across the bank’s various entities are the two critical imperatives which can be enabled through a powerful technology platform in a multi-country scenario.

One Billion Opportunities: Banking the Unbanked Globally

There is a billion-strong globally distributed market actively seeking financial services which remain largely unattended to. These prospective customers...represent enormous earning potential for banks, but constitute the unbanked. The unbanked are those who do not utilize banking services and have limited banking needs. The unbanked are not the poorest of the poor. However, they certainly include those whom banks need to serve but cannot do so profitably in the existing banking environment.

Though these consumers need access to banking for savings, loans and microfinance, they do not have bank accounts. The reasons for this include lack of steady and substantial income leading to a fear of insufficient funds for an account, limited access to banks (especially in remote areas), lack of formal employment that precludes a financial history, poor financial literacy or even psychological factors such as mistrust of financial institutions. Another important reason for this predicament of the unbanked is that banks do not offer them suitable products tailored to their needs. In effect, they have been excluded by the banks’ inability to understand the unbanked market requirements and the banks’ unwillingness to adopt innovative models to serve them. However, this billion also constitutes an enormous opportunity – if banks are willing to accept the challenge of including them with an eye on the bigger picture.

This paper provides a regional perspective to this issue and examines what banks can do to capitalize on this opportunity as converting the periphery into the mainstream has now become a business imperative.

The ASEAN Retail Banking Agenda

The retail banking industry accounted for a dominating 57 percent of global banking revenues till recently. Boston Consultancy Group expects this trend to continue till 2015 and even beyond.... However, to make this a reality the industry needs to continuously deal with increased global competition and issues like transitioning to e-products and handling of numerous regulations. At the same time the ever changing needs and behavior of customers should be satisfied.

The growth opportunity in the ASEAN region in retail banking is being seen by top consultancy firms, like McKinsey, as among the biggest and potentially the most lucrative one with estimated revenue of about $180 billion by 2010. But banks need to realize that growth requires innovation and flexibility in products, services, strategy, mindset, technology, processes and operations. Hence, there is a need to align and integrate processes across channels and the various entities of the entire organization, while employing suitable IT solutions. In order to present a truly customer-centric experience banks need to leverage their knowledge of various markets and establish a robust back office infrastructure.

This paper outlines the imperatives impacting retail banking products and services with specific reference to the ASEAN nations, and explores what banks need to do to forge winning strategies in the dynamic and demanding retail banking market.

Banking the Unbanked: Going Mobile

A new billion-strong segment is slowing emerging today which is increasingly catching the attention of banks worldwide. This segment includes those unbanked people whose requirements for financial services ... has remained unsatisfied due to reasons like lack of steady and substantial income or limited access to banks due to dwellings in remote areas. Though these consumers need access to banking for savings, loans and microfinance, they do not have bank accounts. The challenge for banks is to service this segment and to do so profitably in the existing environment.

Mobile and e-banking solution is emerging in a big way as it enables convenient, fast, simple and secure branchless banking. By leveraging the mobile Short Message Service network, which will quickly and cheaply provide SMS-driven banking services in unbanked areas, banks can increase their outreach. Banks, thus, need a solution vendor who provides the right IT infrastructure which will enable mobile banking in becoming a success.

This paper provides an insight into the special needs of the unbanked population and also gives a detailed checklist of a mobile banking solution’s architecture and functionality that a bank needs to look into.

Championing the Customer Cause at the Bank

Managing customers is of prime importance and this realization has placed customer management at the core of all other strategies that are being devised by banks. Banks all over the world are making a visible effort ... in moving from being product-centric to becoming customer-centric. But, banks need to understand that customer-centricity is not about just wanting to strengthen relationships with customers. Nor is it about having a customer strategy which unequivocally states that customers are a bank’s most important asset. To achieve customer-centricity it is important that everyone in a bank realizes that each fragment of information about a customer should be recorded, analyzed, understood and then re-used to not only develop meaningful responses but also to address the needs of that particular customer. Progressive banks would do well to capitalize on some key initiatives like taking customer management and related issues straight into the board room, charting robust customer strategies and effectively managing shifting customer demographics.

There is an increasing diversity in demographics even within a local region and this is opening up a whole new world of challenges and banks need to become highly successful in exploiting the potential of any region. This paper explains the various factors banks should focus upon in order to ride the continuous demographic transitions that customers go through.

Olympic Growth Retail Banking in China

China’s banking sector is growing enormously akin to the country’s economy. It has been estimated that 30% of future growth and profitability will come from retail, small business lending and fee-based lending.... This is why domestic players and foreign banks are fighting tooth and nail to dominate the Chinese retail banking industry. Until a few years ago the banking sector of China had maintained a very conservative approach but today’s zooming economic growth coupled with wide-scale liberalization policies has thrown open numerous financial service options to the Chinese. Experts feel that to reap early profits and reduce the time required to understand the market foreign banks will need to enter into partnerships with local banks. Chinese banks also need to attract the vast population of unbanked customers, provide innovative products for different sections of people and incorporate efficient risk management processes.

In order to comprehend the Chinese banking sector one needs to study the growth of retail banking products as well as understand what might be the key future trends in the retail banking scenario in China. This article examines the booming banking sector in China and takes a look at the players, products and prospects.

Can Usability Improve Productivity in Banking?

Today, every major bank has invested largely in IT or has lined up plans for major investments. Banks look towards IT to improve productivity, operate in a global scenario and offer services in a wider market around-the-clock.... The organizational aim for higher productivity can be achieved only if end users of a product are able to use it to its full extent; in the manner it is best intended. Users should be able to learn the software and get productive quickly. Requirement is for software that lets the user create ‘n’ number of customers per hour increasing productivity of the bank by leaps, as compared to software that lets the user create only a fraction of that. A usable product is one that is easy to learn, increases users’ efficiency, minimizes user-errors and guides the users to resolve errors when they commit any. This will result in subjective satisfaction for users. That is, higher the usability higher shall be the productivity of employees. Productivity is basically a measure of the efficiency of production. Software that increases productivity also adds to the banks’ return on investment (ROI).

This paper looks into the main quality components that define usability to its essence. Usability includes all features that make the software usable for its intended users and paper emphasizes that the software is on target only if users can accomplish their intended tasks satisfactorily with the software.

Can Emerging Economies Bank on TV?

As banks reap the benefits of non-branch service delivery channels that came of age in the recent past, their quest to expand reach via innovative offerings never ceases. Banking services made available via television media ... have been one such innovation. Banking industry analysts had initially written off this mode of service delivery for advanced geographies, primarily quoting the bright future of Internet/PC paving the way for internet banking as the preferred option over television as the reason. However, most banks have realized that online banking channel feats can only be complemented by using ubiquitous presence of television infrastructure as a viable channel. T-Banking is about exploiting television’s existing reach into households as a viable banking service delivery channel. The commercial applications that can be further built on top of this platform could enable users to perform T-Commerce activities like paying for tele-shopping, making bill payments et al.

This paper highlights some published trends on the internet, that showcase the potential of T-Banking and T-Commerce market, particularly for India. There is also a description of how bankers can exploit the innumerable T-banking and T-commerce opportunities that are present in the market and what are the channel adoption risks and remedies.

BPM, Not Just Another Technology Fad

Business processes control and describe how business is conducted internally and externally in terms of data and information flow, and also details the interactions between individuals and partners... with the concerned organization. However, business processes are complex in nature, span across multiple systems and involve interactions across several business units and trading partners. So to keep a particular process operating smoothly, employees devise workarounds and links between applications such as manual transfer of data, telephone conversations, fax, email or simply face-to-face meetings. Unfortunately, this is a sub-optimal solution as organizations are not able to achieve maximum operational efficiency, nor are they equipped to deal with change if business processes evolve, as they inevitably do. Now a new approach labeled Business Process Management (BPM) is emerging which is essentially an approach to effectively automate and manage cross-functional processes by orchestrating people and applications using supporting software tools. But, it is important to realize that unlike other technology trends, with BPM, ‘IT’ does not take precedence over ‘business’. Technology does not dictate the way a firm’s processes are structured. Rather, it is a collaborative approach between business and technology.

Paper discusses the various benefits that an efficient business process management system will bring to the bank that deploys it. A point of focus is how BPM has grown from being a mere concept to becoming an essential in the banking industry.

Strategic Agility Planning for Banks

The growing banking industry needs greater agility to address challenges such as vulnerability to economic cycle vagaries, transient customer loyalties, increasing regulatory pressures and heightened expectations from other stakeholders.... Also, agility is required for harnessing new opportunities such as Mergers and Acquisitions (M&A) and new product segments. Thus, banks need to carefully factor-in agility into their ‘Business-As-Usual’ (BAU) philosophy.

Agility is a mean to achieve and sustain high performance on accounts such as customer base, employee satisfaction, IT infrastructure. An agility framework, if adopted effectively, can provide banks with a structured, mutually exclusive and exhaustive set of methodologies to initiate, measure, track and monitor agility programs. Banks while adopting an agility framework should keep in mind challenges faced by the same which vary from proactive tracking of drivers to controlling the spill-over of program indicators such as time and cost. A comprehensive framework will help banks overcome such challenges.

This thought paper provides an insight into the various components an agility framework should encompass. Paper also highlights the importance of an agility dashboard for keeping the stakeholders informed and with the help of case studies, illustrates the different focus areas in developed vs. developing countries.

Understanding the Role of Technology in Anti-Money Laundering Compliance

Today, money laundering has become a key funding mechanism for international religious extremism and drug trafficking, and curtailing these illegal activities has become an important focus.... These activities pose a serious threat to financial institutions present worldwide. While many Anti-Money Laundering (AML) solutions have been in place for some time within the financial community, the efficiency with which these older AML solutions were able to detect, alert and prevent potential money laundering schemes was dependent on the quality of the data collected by the financial institution and the capabilities of the tools that were tasked with analyzing that data. As a result, a “second” generation of AML technologies has emerged with the ability to monitor every single transaction, discover various types of unusual behaviors and alert officials to the activities that represent true risk to the financial enterprise. These “intelligent enterprise system” are able to learn and adapt, comprehending new money laundering schemes as they arise. They take an enterprise-wide approach, determining every transaction that is unusual, as opposed to looking for a specific patterns or behavior, while analyzing both the client profile and the transactions undertaken by the financial firm.

The paper discusses in detail the key risk assessment components that these systems use.

The Adoption of Web Based Cash Management Systems

The ever growing internet is finding its foothold in the banking industry as retail customers are quickly coming to realize the advantages and benefits. It is not surprising that banks and their corporate customers have begun jointly ... to explore the mutual benefits that could possibly accrue to them by leveraging the Internet. Over the years we have seen a strong shift, in some parts of the world at least, from text-based systems to computer-based solutions and finally to the present situation, namely, Web-based cash management systems. As the demand to move from a thick-client to a thin-client system increased among corporate clients, it is natural to expect that customers would want to have and retain every bit of functionality around the traditional services of collections, payments and reporting and this is where Web-based management system comes into picture.

Web- based management system can be used for multiple operational front-end systems such as customer relationship and branch banking and this is precisely the reason why large numbers of leading companies from different industries are investing heavily in this region.

This paper describes the advantages a Web-based management has for both - the customers as well as the banks and how technology can be an enabler for a smooth- transitioning to a more efficient processing architecture.

How will web services impact cash management?

Businesses, today, are increasingly valuing agility in their processes and systems, and past models of monolithic application design are no longer effective. One way of increasing agility is to leverage the twin advantages... of a Web services-based architecture – openness and modularity. Web services improve the flexibility and reach of existing IT infrastructure enabling businesses to fundamentally change the manner of enterprise application development and deployment. Web services attempt to address the problem of integration, though many banks have been reluctant to adopt such new technology.

In its specific implementation in the cash management process, the role of web services in large banks is to provide better integration of data and ensure better interaction between legacy and newer technologies so as to protect investments. Simple web services were initially expected to aid projects that leverage on the characteristics of Internet-enabled computing to showcase applications that have an outward (inter-enterprise) focus; later the requirement was for facilitating what is termed “global collaboration”. However, this requires buy-in from senior management of the potential of web services architecture, and needs management’s shared vision of the long-term business advantages.

This article is an executive’s guide to web services and how they are likely to impact the cash management function in financial institutions.

Customer Strategies

Solving the "Cross" word puzzle PERSPECTIVE – An integrated approach to cross-selling

Conventional CRM wisdom has it that, selling to an existing customer, is about six times cheaper than acquiring a new customer. This implies that revenue through cross or up sales would contribute much more to the bottom-line than the revenue through new acquisitions.... Cross-selling also helps to increase stickiness with the customer by forming a virtual exit barrier. Especially in the banking industry, by increasing the number of products or services availed by the customer, the bank can significantly reduce the tendency of the customer to shift to a new bank. This thought paper details the integrated approach that will enable the bank to set up an effective and sustainable cross-selling mechanism spurring organic growth.

A Fresh Look at Banking Loyalty Programs

Businesses basking in the security of satisfied customers have to think again. There’s a world of difference between truly loyal customers and those that are merely satisfied. A study of automobile customers conducted by a loyalty think-tank based in the UK showed... that barely half of those satisfied with their purchase went back to the same dealer! With consumer inertia coming down, there’s a huge premium riding on customer loyalty. Small wonder, that loyalty programs have found their way into a huge number of businesses worldwide.

Drawing inspiration from customer-focused industries such as aviation and retail, the financial services sector added the loyalty program to its armory several years ago. However, barring the odd exception, banks’ loyalty programs are longer on rhetoric than ideas.

How Canadian Banks can Retain, Sustain and Grow Customers

Royal Bank of Canada has shown the way by taking a highly customer-specific approach in their business. They used intense statistical analysis to understand customer potential and growth prospects to ultimately arrive at their “lifetime value”.... The analysis also enabled them to predict the need for additional products and services among different customers, based on which they were able to extend highly customized offers. At the same time, preventive measures were initiated to retain customers who were most vulnerable to attrition. The strategy paid off handsomely, with the bank being able to increase penetration and contribution by as much 10 percent.

By pursuing a concentrated strategy to retain, sustain and grow existing customers, as discussed above, banks vying for the Canadian market can also enjoy similar success.

Success Follows Canadian Banks that Follow Their Customers

Canadian banks are faced with the unique challenge of having to serve a customer base that moves location for a large part of the year. Their clients are also among the most diverse in the world.... Therefore, they need to have a fail-proof strategy that keeps them on their customers’ radar despite a lengthy separation. A combination of international branch expansion and channel innovation should help them achieve this objective.

Who's the Right Banking Transformation Partner for You?

The implementation of a new universal banking solution is invariably accompanied by a change in banking processes, which is necessary to deliver the benefits expected of the transformation.... A vendor with a long and reliable track record would immediately recognize those processes that need to be dismantled and have a clear perspective of the best practices that must be put in place. This allows banks to hit the ground running, and enjoy the benefits of their revised processes from the outset, without having to undergo a painful transition during which they are forced to juggle new systems with old processes.

Hence, it is imperative that banks ask their prospective vendors whether they can deliver an application-led business transformation. Does their application prescribe the best methods to conduct routine transactions, manage channels or decide pricing and so on?

Channel Transformation

A Compelling Case for Channel Innovation

Technology is indeed a great leveler. The commoditization of banking services is living proof: banks that have shifted from legacy to modern core banking systems are pretty much on equal footing in terms of the products, services and experience they offer.... So, how can banks build competitive advantage in a market where product differentiation is becoming blurred while customers are becoming increasingly fickle? The answer lies in innovation, which ironically, is enabled by the same technology.

Banking innovation can work at the product, channel, process and business levels, to name a few. While the relative importance of each is open to debate, there is no denying that channel innovation has impacted banking behavior the most. Channel innovation, which has changed the face of banking in recent years, must continue to spearhead the charge. There is much to be gained from innovation including improved customer engagement, agility and efficiency. Not to mention, that even banks’ long term future might depend on how well they innovate.

Impact of Regulatory Changes on Banking Channel Strategy

Emerging regulations across Europe and North America governing telecommunications and network services will impact the online delivery of services by most industries, including banking. In particular, banks will have to adapt their mobile... and Internet banking offerings in a bid to fulfill a dual objective – comply with the new directives as well as leverage opportunities presented by them.

Shifting regulations may present challenges for banks from the compliance point of view, but they also open up opportunities to develop a more creative channel strategy. As banks look for ways to improve customer satisfaction, they must ensure that they have the right partner, channel and technology mix in place. At the same time, they must not lose sight of consumers' interests defined by their preferences and need for privacy and security.

Optimizing Channel Transformation

Although the world is going through economic pain, there is also emerging from this turmoil, new and innovative means of addressing business challenges. A case in point is the surfacing of truly enabling technology-led strategies, in response to the evolving business climate.... Progressive banks believe that now is an opportune time for introspection and revalidation of business and technology strategies as well. A closer look at the strategies driving their delivery channels is on most banks' agendas.

e-Banking

Web 2.0 in Banking and Financial Services Industry

Web 2.0 is changing the way we interact online. Web 2.0 tools like Wikis, blogs, surveys, ratings, polls, widgets and social networking are being widely used across industry verticals for improving customer loyalty and thus business... This paper attempts to explore the possibilities of Web 2.0 in banking and financial services industry and the ways in which such tools can be deployed to improve customer stickiness and bring increased business to financial Institutions.

Online Sales Tools: The Relationship Manager's Best Friend

Today's banking customers are faced with a problem of plenty. They are pursued by a number of competing financial institutions, all of them fighting for share of wallet. The decision process is further confounded by the variety of products on offer. Customers must choose between products that are largely similar, but subtly different....

When conditions are uncertain and finances under strain, customers are understandably more cautious about where they'd like to park their money. That makes the job of relationship managers even more challenging – they must recommend the right solution for their customer and maximize business for their bank. In order to establish credibility beyond doubt, they must be equipped with the right tools that can demonstrate the veracity of their recommendations.

Internet Banking: Relevance in a Changing World

Banks will do well to partner with an Internet banking solution provider which has not only the expertise to translate their vision into a cutting edge e-banking experience for the user, but also the foresight to define boundaries for safety.... With security concerns adequately addressed, next generation Internet banking is full of exciting possibilities. Banks that seize the opportunity may find that Internet banking can become a means of differentiating themselves from competitors, rather than a mere cost cutting tool. Clearly, providing a more powerful and interactive e-banking experience, is the way forward.

Mobilizing Customers: Mobile Banking in the US

All over the world, people are experiencing the convenience of mobile banking. Gartner has estimated that there will be 33 million mobile payment users worldwide in 2008, expecting this number to triple to 103.9 million users in 2011.... Mobile banking is set for rapid growth with the number of global mobile banking transactions predicted to ramp up from 2.7 billion in 2007 to 37 billion by 2011, according to Juniper Research. The analyst forecasts 41.5 billion mobile financial service (MFS) transactions will be made by the end of 2011. In its report, ‘Mobile Financial Services: Banking & Payment Markets 2007-2011’, Juniper forecasts there will be an additional 517 million mobile users of MFS over that four year period, with a total of 612 million users globally generating more than $587 billion worth of financial transactions by 2011.

In contrast with the rest of the world, mobile banking in the US took some time to take off. One of the primary reasons was the legislative hassle involved. By tying a bank’s mobile service to particular telecom service providers, banks lost control over the application’s pan-American availability and its look and feel which were essential to brand identification.

The banking environment is a tough one in the best of times. The current economic situation is not helping. Thus, banks need to look at a channel that can help add value to customer relationships in a cost-effective and efficient manner.

Banking the Unbanked: Going Mobile in Africa

With an estimated 278 million subscribers, the mobile phone is a key economic driver in Africa. With only 25% of the population having bank accounts, the unfulfilled needs for financial services have found a solution in mobile banking.... The unbanked, if tapped, represent a significant growth opportunity for banks. A mobile and e-banking solution enabling convenient, fast, simple, and secure branchless banking, with the support of e-payment gateways, is indispensable for banks reaching out to the unbanked. Such a solution can help reduce costs while increasing speed and efficiency through SMS-driven banking services.

Mobile banking services have been successfully adopted by a few countries in Africa. For example, in Kenya customers exchange cash at an agent in return for an e-money account. South African customers can use their mobile phones to make payments, transfer money, and pay utility bills without worrying about minimum balance requirement and fixed monthly fees. Similarly, Nigeria and Egypt have also witnessed an overhauling of their banking systems with offerings like new scratch card-based savings payments system.

This paper details key success factors for such a solution as well as examines the mobile banking scenario in the African continent - the strategies adopted, the policies followed and the market realities.

Partner Portals – What's in it for Banks

Portals are those Websites that aim to be entry points to the World Wide Web, typically offering search engines and/or links to useful pages, and possibly news or other services. ... Partner portals are portals owned by companies that give access, based on the function involved, to their various partners so as to forge deeper relationships. The applications are transparent to the partners. Typically there is a single sign on mechanism used to log in the user. Based on the organization and the role of the partner access is given to various tools and the required application. Partner portals are popular with businesses that rely heavily on indirect sales and support.

Today banks are growing both organically and inorganically and partners have started to play a very important function in their growth strategy. Banks are increasingly using partners to expand business and enhance efficiency. A partner portal provides a common eco system and extends bank’s reach so as to provide seamless and efficient transactions with partners. Apart from access to applications, banks also provided information access to their partners so as to help them conduct business.

This paper highlights the available partner portal offerings as well as presents various scenarios describing the advantages for a bank that deploys partner portals.

The Next Wave in Internet Banking

The Internet banking model was originally built with a view to merely replace identified brick-&-mortar services and provide an online means of reaching out to the bank. This model was not mature enough for the market as these Internet banking solutions ... served as mere aggregating mechanisms. Slowly new features like inter-bank local payments, international remittances, communication through secure e-mail with dedicated relationship managers from the bank and exposure of account relationships through online channels were added. Banks then started to use the model as a ‘differentiating’ factor.

Today, the banking business is driven by one mantra - virtually all types and kinds of banking services to be made extendable across channels, including the Internet. With the growth of Internet banking being driven even harder by the retail boom, banks can increasingly rely on new-generation electronic banking solutions built on open architecture, with robust security features, that provide true relationship banking functionality as well as be scalable and flexible to meet the changing demands of the retail customer.

This paper looks at what Internet banking has been so far and delves into what the future ahead could be like. It also highlights the importance of having solution vendors who move in sync with the market, focusing on building beyond their core competencies.

Enticing SMEs- The Online Banking Way

Financial institutions have started to give a serious look at the small & medium enterprises segment due to issues like global economic slowdown and want of better profit. But, there is a need to keep in mind that business scope and legal structure ... of the firm are criteria that should not to be overlooked while approaching the SMEs. The approach best suited for a bank should be dependent on existing customer profile and the strategic objective behind SME initiative. Some banks view SME banking as a specialized division within the bank. They claim that SME customers have specific needs, demand greater flexibility and need personal touch. However, this could mean higher operating cost and needs higher breakeven volumes. Some other banks consider SME banking as an extension of High Net Worth (HNW) banking. The basic idea is that owners of businesses are retail customers of the bank. On-line SME Banking offering is effectively a toned up version of the Retail Internet Banking offering.

This paper highlights approaches to SME banking that banks follow as well as the service expectations from on-line SME offering as it is one of the most efficient methods of delivering banking services and products to the SME segment and banks need to take higher efforts to increase adoption of the same.

Maximizing Value To Corporate Customers- A WBCM Approach

Cash management is evolving and gaining value in many countries across the world. Specifically, a lot of attention is being paid to the cash management services required by the corporate sector and quite rightly so as the volumes of business ensures ... the investment requirements for offering innovative solutions. These days’ sophisticated services are offered by banks to address the needs of the corporate treasurer, centered on the seemingly simple job of efficient management of receivables and payables. Companies are also becoming more and more receptive to the Internet model as security concerns are increasingly being addressed well by the world-class cash management offerings. They are becoming more open than ever to the idea of employing a cash management services provider. However there is a need to focus on certain criteria before deciding on a vendor. These criteria might include points like ability to provide strong back office capability, adequate delivery systems and reasonable pricing. The success of a cash management solution depends as much on the solution offering as on the operational and strategic support extended to the initiative.

This paper discusses the functional modules that should be expected of a state-of-the-art cash management system while keeping in mind the specific needs of a corporate treasurer. A detailed description of the common offerings in the area of Web-based cash management system will clearly emphasize the complexity involved in offering a value added service.

Managing Security in Mobile and Wireless Services

As banks adopt multi-delivery channels in response to customer demands for greater convenience and lower costs, the wireless channel has seen growing acceptance in the retail payments and brokerage segments.... This is being driven by the ubiquitous nature of wireless devices and their consumer acceptance as well as by the benefits of convenience and low transaction costs. With the increased benefits and convenience of mobile and wireless applications in the banking industry there are also increasing risks in security and hence, the need for security solutions. Three points of security vulnerability exist: the mobile device itself, the wireless channel, and the network connection between the wireless Web servers and the back-end transaction servers. Handheld devices and wireless local area networks (WLAN) are especially vulnerable to potential viruses. The wireless signals may also be picked up beyond the intended recipients creating potential security hazards. Thus, stricter security policies, WLAN security upgrades, the use of encryption technology such as virtual private networks and end-to-end security solutions are highly recommended. Effective enforcement of security policies is as critical to mobile security as is the implementation of comprehensive mobile security solutions.

This paper delves into the security challenges that mobile and wireless services face and also describes the need for end-to-end securities solutions.

Real-Time Alerts - A Big Step Forward in Collaborative Banking

In the age of the Internet, we can access the Web and get to-the-minute updates of events as they unfold anywhere across the globe. This is the age of the wired consumer - one who demands, and gets, information ‘here and now’.... Technology has obviously played a very big role in ensuring this. The challenge before banks in this era will really be to ensure that multi-channel integration ‘really’ takes place and this, in turn, will ensure that the customer’s experience is a more fulfilling one. Among the many different technologies that are contributing to this, one such is that of alerts. As the name suggests, these are essentially notifications or messages, which are sent to customers on the happening of a certain event. The alerts are delivered across a wide variety of channels and devices including email, mobile phones, PDAs, fax etc. Alerting technology is one that is expected to grow strongly, particularly as customers realize that it offers them increased control over their interaction with banks.

Alerting technology offers banks an opportunity to take a giant, but cost-effective step in refining their customer relationship management strategy.

This paper talks about other such drivers for implementing the alerting technology.

Corporate Banking

Financial Meltdown and Corporate Credit Risk: Back to Basics

Technology can help a bank's users to configure the construction of the balance sheet and profit and loss account, cash flow statements and define financial ratios, for different industries. Borrowers in different sectors like manufacturing, financials, construction/real estate, commodities, technology would have unique financial statement structures..., and hence technology can play a role in providing configuration capability for different spread sheet templates for these industries, as well analysis of the statements. Technology can help banks to define the competitors in the industry and to compare the borrower's financials against industry peers.

Cross Border Liquidity Management – A Key Differentiator

Ensuring smooth functioning of business houses by managing and maintaining adequate liquidity is one of the KRA's of a corporate treasurer. Cash flow management, appropriate investment of excess cash and borrowing cash... when it is required are the three basic aspects of liquidity management which demand considerable focus from a corporate treasurer.

Corporate Relationship Management – A Perspective

KYC or 'Know Your Customer has more than one connotation to it. The obvious connotation is from the regulatory viewpoint. The other dimension of KYC refers to knowing your corporate clients in order to design the right... solutions for them, which in turn creates stronger business relationships. To the bank, it means supplementary business opportunities and better service, and to the customer, it means better business support and value for money.

Corporate Banking: Towards A Paperless Haven

The banking industry has seen investment of millions of dollars in technology-led business transformation. Myriad systems exist in a bank to manage corporate customer relationship, maintain customer databases, regulatory ... compliance, origination and on boarding, financial analysis, accounting, transaction management, portfolio management and much more.

Corporate Origination

Deals in the corporate and investment banking world are significantly different from retail lending. With corporate houses getting a flurry of offers from several banks, deal structures, rates and fees are negotiated.... The banker or relationship manager who has the best relationship wins the deal, possibly not always on desired terms, but at rates closer to the best offered by competition. Given the relatively lower volumes, and the high degree of flexibility required (read manual intervention), it is no wonder that automation is yet to make a complete inroad into corporate origination. The senior corporate bankers are busy dealing with their high end corporate customers and sewing up highly structured deals. Accessing systems either for inquiry on the portfolio or originating a loan has, till now, been passé.

However, this view is set to change. This paper highlights that the rarefied world of corporate origination is now practically the final frontier for technology led transformation. Technology can play a significant role in transforming the current paper-intensive process into a more efficient one, improving productivity, reducing turn around time in processing credit applications, and more importantly bringing in electronic audit trails. From a system perspective, paper also discusses the various challenges that the elements of the corporate origination process pose for banks worldwide.

CRM

Social CRM - A Way to Innovate Banking CRM

Banks may derive both quantitative and qualitative benefits by upgrading their CRM system with Social CRM. On the quantitative side there are benefits of cost reduction. There is a benefit of reduced capital cost by owning less capacity database.... Further, there is a benefit of reduced operational cost by getting away from the maintenance of this database. On the qualitative side again there are benefits of cost reduction. Increased engagement of bank representatives and DSAs will result in increased productivity and hence reduced operational cost. Also, the way in which customer information is used by social CRM will result in to greater customer satisfaction and hence increased business for banks. Therefore, banks may improve both top line and bottom line numbers by adopting social CRM.

Conclusively, it makes sense to upgrade banking CRM with Web 2.0 capabilities and to assume that customer data may not be owned by CRM itself.

CRM in banking

This paper brings forth the views that were discussed at FinacleConnect Virtual Industry Roundtable by a panel of industry experts who deliberated on the current trends in CRM, and how banks are using CRM... to deepen their relationship with customers.

Basically, CRM is a key element of differentiation that lets banks develop their customer base and sales capacity. Today the environment is changing dramatically, and so is banks’ approach to their customers. A well thought out CRM strategy lets them improve the sales experience of the customer; develop the potential value for customers, increase sales, productivity and efficiency; and create personalized one-to-one service. It is important that the client not the product is in the center. This is the reason why banks should try to improve the following processes and support it with systems -customer service and advice, customer analytics and campaign-management .CRM, at the end of day, should be a business strategy more than anything else.

In the roundtable some issues discussed were benefits that banks can hope to achieve through deploying CRM solutions, how has the understanding of CRM in banking changed today as compared to a few years back and how the technology has matured in this time and the impact it has on banks today.

The 2nd Generation of CRM

Customers and customer relationships lie at the very core of the business of banking. It is therefore not surprising that CRM (customer relationship management) solutions promising banks the ability to manage... customer relationships were instantly popular when they were launched over a decade back. Unfortunately, a majority of these initiatives turned out to be costly, complex enterprise-wide projects with lengthy implementation time and banks did not get adequate returns from their massive investments. In those early days, neither banks nor the vendors realized that CRM goes much beyond technology. The organizational structure and processes at the bank need to change to adequately support a CRM solution. Now, banks realize that CRM is a continuous process – it is a journey, not a destination. To be successful in this arena, they need to embrace CRM as a philosophy and adopt a strategy for managing customer relationships that effectively addresses three key areas: people, processes and technology.

This paper emphasizes that in addition to the sales, marketing and service capabilities inherent in a generic CRM solution, these specialized solutions should offer banking specific features like a CIF tailored to the banking environment, ready-to-deploy banking templates and requests, origination integrated with sales and service and comprehensive support for call centre agents. Banks will, thus, easily be able to gain the long sought after 360 degree view of customers real-time. Buoyed by developments in technology that has made CRM deployment much simpler than before, banks are all set to ride the second wave of CRM.

Treasury

Modular Solution, Modular Implementation: A Stand-out Option for Medium-sized Treasuries

The decision to go in for a new treasury solution is a tricky one, particularly for mid-sized banks, as it is fraught with complexity. For big banks with operations spanning the entire treasury spectrum, from money markets to equities to credit derivatives..., the logical option is a big-bang transformation with a full-fledged treasury solution, as a part of, or on top of their core banking application. However, those that are just starting out or have limited play in this area have an expedient alternative in the form of a best-in-class, boxed-up package that can be deployed modularly and quickly, but at the same time be customized to their needs.

Basel II Compliance in Finacle Treasury

Basel II, the second of the Basel Accords, provides recommendations on banking rules and regulations issued by the Basel Committee on Banking Supervision. The Basel Capital Accord ensures that capital allocation ... is attuned to the risk that the bank is carrying on its books, segregates operational risk from credit risk and quantifies both ;finally it attempts to bridge the gap between economic and regulatory capital to reduce the scope for regulatory arbitrage. One of the principal objectives of supervision is to alienate depositors from the financial risks of the bank. In today's volatile markets, it is imperative to ensure that capital set aside for capital adequacy measures is readily available for depositors in adverse market conditions. However, it has largely left unchanged the question of how to actually define bank capital, which diverges from accounting equity in important respects. Basel II uses a "three pillars" concept to promote greater stability in the financial system - minimum capital requirements, supervisory review and market discipline.

In this document we will outline the key features provided by Finacle treasury solution to achieve Basel II compliance for each of the 3 pillars.

The FX Marketplace: Trends, Opportunities and Challenges

The foreign exchange marketplace is in a state of flux. The rules of the game are being re-written by the advent of new players and different ways of transacting FX, thanks mainly to technology advances.... The so called 'real money managers' (insurance and pension funds), hedge funds, proprietary trading desks and leveraged investors are becoming increasingly interested in foreign exchange as an asset class, as an alternative to fixed income and equities. Technological advances are allowing the entry of many more exchange type places to offer their services to customers. Algorithmic trading is now being facilitated by proprietary desks and hedge funds that treat FX as an asset class. Also visible is a continuous growth in international trade and capital flows. Electronic trading is being seen as the only possible way to service low-value high-volume retail customers profitably and banks should make concerted efforts to move these customers online.

This paper discusses these and many more trends that are prevalent in the FX marketplace and details opportunities and challenges that the FX marketplace presents to the old and new market players.

The Changing Face of Treasury Technology

Bank and financial institution treasuries have traditionally been involved in in-house trading in foreign exchange, money markets, securities and derivatives and they also offer these products to their corporate... and retail customers. Banks deployed different systems in these areas which led to an increasing overhead of integrating them. However, the global FX market today is much different than what it was even few years back. Over time the banks have realized the importance of increasing operational efficiency and reducing operational delays by using straight-through-processing applications which combine front, middle and back office functionality in a single application. Banks offering e-trading facility to their institutional customers have seen increased cost savings on delivery of this service by further integrating customer facing applications with back-end treasury applications.

This paper delves into the various trends prevalent in the marketplace which are forcing this change and forcing banks and other financial institutions to re-examine their treasury business and technology strategies to better meet and exceed the requirements of internal and external customers. There is also a detailed description of the reasons behind explosive growth in the derivative markets and trading volumes.

Treasury Organization - Picking the Right Model

Treasury, in its strictest sense, refers to one function: asset liability management, especially when used in the context of banks. In a wider sense, treasury includes a whole range of activities encompassing various markets.... As the definition of treasury expands, companies must choose the treasury organization model they want to base their operations on, regardless of their underlying business. Organizations exhibit patterns in their choice of treasury organization models. Two important dimensions for which these choices differ are the range of activities covered by the treasury and the extent of centralization of management control.

This paper discusses these dimensions .It analyzes the relationship between various organization models and the factors that influence decisions on the model to adopt, the objective being to investigate if certain models are better suited for certain organizational situations. Also, key factors that impact the choice of model adopted are - the primary motive for the treasury within the organization, the scale of operations, the geographic spread of the business and the complexity. Thus, companies are also advised to consider certain key factors which impact the organizational models as these factors can be collated to form a decision matrix, which is a useful tool for any debate on treasury models.

Treasury: Back to Basics

The operating environment for bank treasuries has changed dramatically in recent months with news from the market only serving to exert greater pressure on the profitability of bank treasuries,... as inflation and interest rates are poised to scale northward. Prevention of increasingly sophisticated fraud is becoming a burgeoning concern and risk aversion is reaching phobic magnitude as treasurers focus on hitherto neglected operational and concentration risks. Awaken to a new reality banks are aggressively seeking to cut back the splurge, as they struggle to manage their cost structures.

In order for bank treasuries to be able to respond to the dynamics of this changing business world, to seize the opportunities it holds and emerge not just unscathed but successful they need to harness the potentials of three key fundamental but truly powerful enablers. There should be a move towards minimizing risks, maximizing simplicity and finally, optimizing their technology.

Technology will play an important role in a treasurer’s journey ‘back to the basics’ and provide bank treasuries the solutions to manage robust yet lean operations, strengthen risk management and rationalize costs. This paper discusses one such treasury solution that will empower treasury operations with the technology backbone to stand up to the challenges of changing business dynamics.

Wealth Management

Leveraging IT to Win in Bancassurance Segment

In pursuit of fee based income avenues, banks across geographies have joined the Bancassurance bandwagon. Various business models have been implemented by banks to leverage the bancassurance opportunity.... Models like working as a pure distributor, setting up new insurance businesses, acquiring existing insurance firms and setting up joint ventures along with seasonal insurers have been observed across the globe. In certain cases, a reverse flow has also been witnessed whereby insurance companies have set up / acquired banking business to compete with the serious bancassurance players.

Among the various business models available, the pure distribution model, wherein a bank ties up with insurers to distribute insurance products to their customer, has been particularly popular. The reasons that work towards making this an attractive proposition are primarily low capital requirements, lesser time to market, simpler regulatory requirements and ability to generate considerable income streams without getting involved in core insurance processes like underwriting, risk management, claims and benefits processing, among others.

Here we will take a brief view on the distribution based bancassurance model and highlight the technological solution required to harness the true benefits of bancassurance business.

Wealth Management: The New Revenue Frontier
for Banks

The wealth management business is a significant revenue generator for banks and financial institutions today. Banks have progressed from being mere distributors, facilitating transactions in various mutual funds to performing an advisory role for their clients.... Client expectations have also increased manifold with the emergence of a stronger relationship between the bank as wealth managers and their clients. Customers are looking at banks as a one stop shop to meet their financial needs. On the other hand, wealth managers aim at managing their clients’ wealth holistically, offering solutions for all their financial requirements.

Relationship managers are expected to manage their clients’ mutual fund portfolio in such a way so as to meet their stated investment objective. Wealth managers aim at growing their clients’ wealth by constantly tracking their portfolio, comparing it against benchmarks and re-balancing when required. This expansion of banks’ role as wealth managers provides new opportunities to enhance their fee income generation capabilities.

The Corporate Actions Landscape

A corporate action is any event that results in a material change to a company and affects its stakeholders. The ranks of stakeholders include shareholders, both common and preferred, as well as bondholders. ...

Processing scenarios for corporate actions are many and varied and pose a serious challenge to any attempt to automate. Some events are simple and in a sense passive as it results in automatic disbursement of cash or securities or other entitlements. However the discretionary or voluntary options e.g. rights, buy backs or dividend options require the investor to make a decision and are complex and more difficult to automate.

China: The Wealth Management Agenda

China is the second largest wealth management market in Asia with significant wealth creation driven by unprecedented economic growth in recent years. However, the wealth management market in China remains in its infancy,... but it can be expected to evolve rapidly, in line with the development and de-regulation of financial markets. The key to growth is dependent on a number of factors but will first be prompted by continued local regulatory relaxation. The wealth management market place is evolving with the expansion of the affluent client pool and increased competition through mergers, acquisitions and the introduction of nontraditional players. The considerations to create or strengthen a customer-centric model are complex, but most firms have recognized that long-term success in this competitive market is dependent upon the ability to deliver customer-centric products and services.

Paper discusses the wealth management service canvas for banks as well as gives a componentized view of offerings of an efficient wealth management system. Paper also discusses the changing landscape of the wealth management environment by focusing on issues like present market dynamics, increasing focus on advisory services and the key technological trends – present vs. future prospects.

Wealth Management and the Retail Strategy – an APAC Perspective

There is a new segment of customers present in the market that is already sizable and growing at above-average rate. These customers are the “middle class millionaires”- those with net worth between... $1million and $10 million. Bankers are quickly realizing that the needs of this segment are markedly different from the rest of the middle class. In addition, banks can also make above average margins from these customers compared to a typical retail customer. It is, therefore, required of retail banks to carefully align their retail banking strategies to take into account the needs of these wealthy individuals.

Asia Pacific, as a region, holds the third largest number of HNWI (High Net Worth Individuals).But, despite the expanding wealthy class in the Asia Pacific region financial services institutions are inexperienced in providing services to this unique group of customers. Most are still in the process of exploring different models and approaches that would best suit their target clients and business environment.

Explaining briefly what wealth management is and how it is different from retail banking, the article proceeds to talk about the trends observed in the Asia Pacific wealth management market which include increasing breadth of offerings, selling competitor’s products, changing profile of wealth management providers et al.

Gold Rush: The Shift Towards Wealth Management in Banking

Similar to retail banking, the initial wealth management offerings were largely undifferentiated and commoditized, with some cosmetic changes by way of stratifying higher-end retail customers as ‘Gold’, ‘Preferred’, ‘Platinum’ etc.,... which was often based on very simple criteria like account balances, deposit/ asset values etc. But the market is seeing an emergence of a new subset of “individual” or “retail” clients who have the potential to amass significantly higher levels of wealth. Naturally, such clientele require a higher level of personalization, both in terms of relationship management as well as product offering. There is a need to understand the customer’s current financial position, ongoing financial needs, funds flow requirements, risk appetite levels and provide a basket of investment options and value-added advisory services so as to enable maximization of wealth of the customer. Banks have acted swiftly in responding to these interests. After all the “high perceived value” of wealth management has more attraction than the “low cost transaction” for the retail market. This brings unique challenges for the service provider and opens up immense opportunities for IT players to offer solutions which can cater to the entire life cycle events of wealth management offerings.

This paper tracks what are the requirements from a financial advisor and the wealth management products and services that are present in the market. Paper also discusses the impact that technology and IT platforms has on wealth management domain.

Wealth Management Boom Time in 2008

Global stock markets have rebounded sharply and posted hefty gains during the last four years, after bottoming out in 2003. Property and commodity sectors have done exceptionally well.... Buoyed by rising global wealth, private banks and wealth managers globally are upbeat about the prospects for this sector. Notwithstanding the US sub-prime meltdown in 2007 and its attendant impact on the US and world economy, the core drivers for wealth creation including increasing integration of world economies, use of technology, changing demographics, creative finance, supportive governments, rule of law and immigration and trade are likely to ensure that wealth and correspondingly the wealth management business continues to grow at above average rates during the foreseeable feature.

Financial Planning Services – A Boon for Banks

In the current market scenario wherein advisory services from retail banking customers is steadily on the rise mainly owing to increasing market transparency, it is imperative for a progressive bank to transition... from transaction oriented banking to relationship oriented banking in order to differentiate itself from competition. At such a stage providing financial planning services to customers and prospects can have multifold advantages.

This paper highlights these advantages and also brings to light the fact that while deploying planning services might be a worthy investment for banks, it must essentially follow a careful consideration of the bank’s readiness to take on the rigors of the task. A bank needs to ask itself whether its financial consultation and planning regime is up to the challenge as most clients make their investment decisions or seek financial advice without providing sufficient information about their goals and requirements. By arming themselves with the relevant expertise, exploring service possibilities with disciplined yet groundbreaking thinking and harnessing the insight gained, banks can effectively leverage the advisory service advantage to gain an edge over competition.

Wealth Management - Transforming Banking in the Middle East

Banks in the GCC region are transforming themselves into end-to-end service providers straddling core banking services at one end and investment management or wealth management services at the other end.... This shift is in line with the huge amount of wealth being generated in the region, the changing profile of customers who want to have more say in how their investments are managed and increasing importance being attached to expertise offered by the bank in this niche area. Players across the spectrum from local regional players to specialized private banks are increasingly transforming themselves into one stop shops with wealth management services as a differentiator.

One of the clear differentiators adopted by GCC banks is to offer Islamic banking services. Another equally important transformation relates to the increasing need for these banks to offer wealth management services. Though most of the wealth creation is happening in the government sector; due to numerous actions taken by successive governments to share this wealth with the public at large, either through generous pay packets or with partial public ownership of these assets – the number of high net worth individuals in this region is increasing significantly.

Islamic Banking

Banking on Faith: Islamic Banking in the Middle East

Islamic banks are on the threshold of a historic opportunity. Oil prices are rising; the banks are flush with funds and are driving growth on the back of strong recent performances.... However, to deliver on the promise they need to address certain issues. Of primary concern are the disparate interpretations of the fundamental Islamic financial principles. Investments history is being re-written with the release of the first index series premised on faith-based investing. The companies included in the Index are screened according to principles found in religions, though the belief is that its range of environmental, social and governance (ESG) screens will appeal to a spectrum of investors, inside and outside of these religious practices. The emergence of a clear standard and a common framework will help bring about improved products along with more effective accounting, governance, transparency and management practices at Islamic banks. This can help these banks build stronger brands for improved scale and better performance leading to faster growth and higher margins.

The concept of interest is fundamental to the business of banking but Islamic banks function without interest and are still profitable. They also are growing at an astonishing rate in terms of assets, customer base and popularity. This paper focuses upon what and how aspect of this astounding banking process while exploring Islamic banking in the Middle East– specifically in the Gulf Cooperation Council (GCC) countries, the opportunities that beckon and the challenges that need to be overcome.

Risk & Compliance Management in Islamic Banking

Unlike conventional banks, Islamic banks share business risks with investors and borrowers.The fundamental difference between conventional and Islamic banking, from a risk perspective, is in the nature of risk sharing....

The profit sharing model in Islamic banking differentiates the nature of risk that the institution faces. This facilitates equitable distribution of profits and losses between depositors and banks or partners. With returns on the depositor’s investment offered on a profit sharing basis, they have an equal share in the business risks of the institution. Similarly, financing based on Islamic tenets changes the nature of risks faced by Islamic institutions. While the conventional bank assures fixed rates on deposits, regardless of whether it makes profits or losses, the Islamic bank offers no such guarantees. If the bank earns profits during the financial year, it offers depositors the agreed rates; conversely, if the year has brought in losses, depositors share the burden together with the bank. One of the most important risks unique to an Islamic bank is the risk of non-compliance with Shariah principles.

Retail Banking

Rural Banking in India: Realizing the Potential through Technology

Catalyzed by the growth of the domestic economy, the banking sector in India has truly come of age. But with the current slowdown and fears of a global recession, the Indian economy and the banking sector have been looking for new avenues of growth.... In the face of these circumstances, it is ironic that rural banking which has hitherto been a slow growth sector could prove the next development engine for Indian banks. With affordable and relevant technology driving penetration as well as providing an improved service experience, rural banking could bring in financial inclusion and help banks grow their business radically.

Future-ready and Futuristic: The Business of Retail Banking

Driven by forces that are often beyond their control, the banking industry in general and retail banking in particular are undergoing a major transformation. Banks are introducing enterprise-wide changes, spanning the dimensions of people..., process, and technology, to deal with the challenges and retain their competitive edge.

What impact will these changes have on the bank? What will the bank of the future look like? This paper seeks to explore banking of the future and its characteristics to better understand how a bank can ride the wave of change and use the gathering momentum to advantage.

Latin America: The New El Dorado of Retail Banking

The Latin American banking market is changing rapidly. From the mid-1990s, American and Spanish banks have led a foreign invasion, radically changing the banking landscape. Through a series of dramatic moves and mergers and acquisitions by global players..., process, and technology, to deal with the challenges and retain their competitive edge.

such as Banco Santander, BBVA and HSBC, the share of foreign ownership in the banking systems of Latin American countries has soared. Most of these acquisitions have been made by non-US institutions. Thirty-one of the Top 100 banks are foreign-owned, 29 by single banking entities, and two either by banking consortia or non-banking companies.

This paper explores characteristics of retail banking in Latin America that will help us understand the way forward for institutions to capitalize on the opportunities in the region.

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