NCB Jamaica Technology Enabled Transformation
Bank Profile
National Commercial Bank (NCB) is the strongest capitalized bank in Jamaica and is the market leader in foreign exchange trading, pension fund management, stock-broking, and credit cards. NCB is regarded as a pacesetter in the financial sector, being the first to introduce a local proprietary credit card, private label, co-branded, and international credit cards to Jamaica. NCB provides a world of financial services to its clients, both through its strong network of branches and subsidiary companies.
Key Business Drivers
NCB grew through mergers and acquisitions during the 1990s to become the dominant force in Jamaica's financial sector. However, the mergers had created conflicts within NCB because of differences in the cultures of the banks that had merged to form NCB, and more importantly because of their diverse infrastructures. Administration of these totally decentralized systems was a nightmare. NCB's proprietary mainframe based core banking system could not coordinate the disparate databases in the branches. Customers were restricted to doing transactions with their own local branch, and bank employees took a long time to close the books at the end of the day. Without standards in place, the bank was unable to implement the applications needed to improve the situation. In the mid nineties, the bank came under indirect government control, which further restricted its ability to invest in necessary changes until its financial health had been fully restored. Essentially, NCB had problems everywhere - people, processes, and technology.
The year 2002 saw the beginning of a new era at the bank when AIC Limited, Canada's largest privately-held mutual fund company, acquired just over 75% of the shareholding in NCB from the Jamaican government. AIC realized that they had inherited an inefficient firm with antiquated operations, and the only way to regain the bank’s position in the market was to embark on a complete transformation. The goal was to revamp virtually every aspect of the bank's operations - replace the antiquated core banking system with a new generation open solution, bring in operational efficiencies by centralizing back office operations, elevate customer facing processes and add a host of new delivery channels.
Solution Overview
After a thorough evaluation of leading banking solutions, NCB selected Finacle, the core banking solution from Infosys Technologies and set up a dedicated program management office to handle the multiple projects within its core banking transformation program. The bank also created a steering committee that met on a weekly basis to monitor every stage of the implementation and ensured that all issues were resolved.
NCB adopted a big-bang approach for the Finacle core banking deployment where all branches and lines of business went live simultaneously. The Finacle implementation took only six months, proving wrong initial estimates by leading consultants that a core banking implementation at NCB would take up to five years.
In the following months, NCB deployed various other components of Finacle, consumer e-Banking, corporate e-Banking, CRM, treasury, and the alerts application. NCB and Infosys created a comprehensive implementation plan for change to guide all personnel involved in the transition process. Infosys also carried out a business process re-engineering to bring in process innovation to align NCB's processes with some of the best business practices within Finacle.
Reaping the Benefits
Technological Advantage Leading to Innovation
Using the powerful customization and parameterization capability in Finacle, NCB has been able to launch innovative products with minimal effort, such as Senvia Money Services, a money transfer service targeted at the large expatriate Jamaican community that facilitates remittances between the United Kingdom, Canada, the Cayman Islands, and Jamaica. Savings Bonanza, a new savings product from the bank where the bank holds monthly lucky draws instead of offering interest on savings accounts, has helped the bank increase their local savings pool by nearly ten percent. Another innovative product, NCB Payroll Plus, has been extremely popular, leading to a 129 percent growth in the bank’s consumer loan portfolio. Payroll Plus enables employees to assign their future salaries to the bank to access bank loans that help them with activities such as paying school fees, undertaking home improvements, and even starting their own small businesses.
Improving Customer Relationships
The technology renewal program has helped NCB transform itself into a customer-centric service-oriented organization. With the CRM solution from Infosys, the bank now has a unified view of their customer relationships across the group, which empowers them to service requests across various financial products of the group such as credit cards and insurance. In addition, under its ‘customer experience management’ initiative, the bank has expanded its electronic offering such as an expanded telephone banking facility, internet banking service, alert messaging service and a state-of-the-art customer care center. Using the consumer e-banking solution and the alerts solution, customers are able to conveniently access a much wider range of banking services including account management, bill payment, alerts, and a series of ad-hoc service requests. As part of this transformation program, NCB has also re-designed their entire branch infrastructure and trained the front-office staff on improving their customer service.
Reducing Cost and Increasing Revenues
NCB is continuously focusing on extracting maximum benefit from the new technology platform both in cutting costs and in increasing revenues. For instance, the new technology platform has helped NCB renew their corporate lending business by enabling the bank’s corporate banking division initiate skillful financial structuring arrangements, which have been well appreciated by their corporate customers. NCB is also one of the first banks in the region to offer corporate banking over the Internet. With recommendations from the business process re-engineering exercise carried out, NCB was able to centralize various operations that were earlier carried out at the branches, which helped the bank cut the end-of-day book balancing time from 150 minutes to 30 minutes. Further, centralization of several activities such as clearing and account opening has enabled the bank’s branches and other units to focus more on activities like customer delivery, achieving economies of scale, reducing operating costs, and managing operational risk more effectively.
View From the Top
|
"Infosys had a very impressive clientele. By engaging Infosys as our technology partner, we knew we'd be in a position to take advantage of these clients' brainpower and the lessons they'd learned. None of these Infosys implementations has ever failed. An essential component of our formula for success is risk mitigation, and we all felt confident based on Infosys' track record that our implementation would also be successful. Before making the final decision, we established a scoring system to compare the functionality, and Infosys won hands down."
Herb Phillipps Jr.
Member of Board and Head – Transformation Initiative, NCB
|