ABN AMRO Bank – technology-led excellence
ABN AMRO Bank is a prominent international bank and its origins go back to 1824. It ranks 8th in Europe and 12th in the world, based on tier-1 capital. The bank has 4,000 branches in more than 53 countries, a staff of about 99,000 full-time equivalents and total assets of EUR1,120.1 billion (as on November 1, 2007). ABN AMRO Bank is listed on several stock exchanges, including Euronext and the New York Stock Exchange (NYSE).
In India, ABN AMRO Bank set up base 81 years ago. The bank is today poised for tremendous growth with a rapidly growing customer base, which is serviced across branches in nine major Indian cities, using various new-age delivery channels. These include ATMs, Internet, mobiles, and call centers, in addition to the branch network.
Key business drivers
ABN AMRO Bank started its India operations and, like other foreign multinational banks, focused primarily on wholesale banking, to service top-tier corporate clients. This changed in the 1990s, when strategic business imperatives and an increased level of competition both from domestic and multinational banks in India led the bank to look at retail banking as a key area for growth.
In an effort to strengthen its retail banking presence, ABN AMRO acquired Bank of America’s retail banking operations in India. As part of the acquisition, the bank migrated to Bank of America’s technology infrastructure, which was based on ICBS solution from Fiserv, running on an IBM AS/400 platform. However, the existing solution was not flexible enough to meet the requirements of a competitive consumer banking environment, where offering a range of products and services to customers across multiple delivery channels is critical. With frequent maintenance requirements, the platform was also proving to be a drain on the bank’s resources. At the same time, the focus at the bank was on reduction of total cost of ownership (TCO); therefore, a mere upgrade to a newer version of the existing, aging system would not have met the objective. As a result, the bank decided to replace the legacy system with a new generation, robust core banking solution.
The cornerstone of a successful consumer banking strategy is to have a technology platform that can offer anytime, anywhere banking through multiple delivery channels like the Internet, ATM, mobiles, and call centers. ABN AMRO Bank required a platform that could easily support existing delivery channels and add new ones, while seamlessly integrating them to provide a relationship view of customers’ interactions across all delivery channels.
Being a multinational bank, ABN AMRO Bank was also keen to adopt best practices being followed in other countries, such as the ability to roll out new products and services in line with domestic market requirements. Equally important was the need to roll out these customizations rapidly so as to gain critical time-to-market advantage. This could only be achieved by deploying a platform that was flexible and easily extensible. After intense discussions and evaluation, ABN AMRO chose Finacle, the new-generation universal banking solution from Infosys, to address its needs in core banking and consumer e-banking spaces.
The following are some of the key features that Finacle offered:
True 24/7 banking
Finacle enabled zero downtime at both the central- and branch-level server, ensuring that ABN AMRO was up and running on a 24/7 basis, across electronic delivery channels and branches. Finacle’s architecture also enabled the bank to offer basic consumer banking services to customers, either during the planned end of day (EOD) blackout windows, unscheduled outages of the central data center of the bank, or during disruptions in branch network connectivity.
Leveraging straight-through processing
Finacle provided an interoperable and open architecture that ensured tight integration with all delivery channels using standard message protocols. The powerful straight-through processing (STP) feature ensured that several transactions were completed end-to-end, without manual intervention. Turnaround times have drastically reduced for issuing check books and account statements, thereby enhancing productivity and customer satisfaction.
Unique extensibility features
Finacle’s unique Extensibility Tool Kit, comprising scripting engine, workflow, and a remote application interface (RAI) provided the much needed flexibility to ABN AMRO Bank. Thus, enabling it to easily and rapidly add new business rules, launch new products, and modify processes. Using this tool kit, ABN AMRO developed a loyalty reward program for its customers, wherein the bank offered incentives like charge-free demand drafts based on certain business rules like maintaining a specified minimum balance. Such programs have helped the bank reap the twin benefits of customer retention and an increase in low cost funds. Some of the modules that have been quickly rolled out by ABN AMRO are:
- Direct Sales Agent Module: To track the performance of direct sales agents (DSAs) of the bank and have customized commission computation logic for the DSAs based on predefined parameters like product type, geography, and hierarchy.
- Complaint and Request Tracking System (CARTS): To ensure a fast-track approach to complaint and request tracking without manual intervention as well as assign priority – based on customer profile and severity of request – by seeking reference from the Finacle core banking database.
- Card Management System (CMS): The Card Management System (CMS), a repository of customer card information, the CMS acts as a focal point in various events relating to cards like issue, reissue, and maintenance. An additional feature of this module is the ability to communicate on an online basis for activities like ‘hot carding’ a card and activation / deactivation of cards
Reaping the benefits
For ABN AMRO Bank, the choice of an enterprise banking platform hinged on factors like flexibility, translating into ease of customization, availability of an integration infrastructure with multiple delivery channels, and reduced TCO. Finacle has delivered on all of these points while providing the bank with crucial time-to-market advantage and business agility, thus helping script a retail banking success story.
View from the top
“The continually changing business dynamics in the new-age economy requires banks to respond with a high degree of agility. Today, technology has emerged as both the key enabler and driver of change. We believe the Finacle universal banking solution from Infosys is not only functionally rich and technically robust and scalable, but also that its new generation architecture – based on the Web paradigm, true 24/7 operability, and straight-through-processing infrastructure – provides ABN AMRO the crucial time-to-market advantage and business agility to gain and retain competitive leadership in the consumer banking space.
We are confident of achieving a very healthy return on investment (ROI) on this technology project and have already experienced various costs savings. For instance, we have experienced over 60 percent increase in realization of fee-based income. Besides, in Infosys, we see a strategic partner who has the global reach, rich experience and expertise in financial services, and a wide range of technologies. It is this rich repository of experience and skills that have helped them carry out this demanding implementation project within budgeted costs and time frames.”
Executive Vice President and Country Representative, ABN AMRO, India
ABN AMRO Bank