Trends in Banking and Finance
IT has been playing a major role in enabling the BFS sector to provide better services and support to customers and at the same time not burden their employees with unnecessary tasks and problems. Like all other verticals, a BFS employee's satisfaction needs have also gone up. Just to demonstrate this fact, we provide you with some interesting data. Out of the 200 odd projects received as nominations for the PCQuest Best IT Implementation Awards 2010, about a quarter were from the BFS industry. This amounts to the highest number of projects amongst all verticals. This clearly shows a tremendous upsurge in the way BFS is looking towards providing better services to their customers using IT.
IT Implementation Trends
Till last year, BFS companies were deeply engrossed in deploying CRM solutions to retain their existing customers, because further expansion could not happen due to the economic slowdown. With the KYC (Know Your Customer) norms as the backbone behind that trend, the recession also taught the BFS the importance of connecting with the customer to understand and fulfil his requirements. Now that CRM solutions have already been deployed, this year BFS looked at building on that data and have largely deployed BI on top of these solutions to gather business benefit out of the data received from CRM solutions.
As can be seen from the types of projects deployed this year, 18% of the projects nominated were of BI and DSS type.The enterprise wide data warehousing project from PNB for instance, consolidates all data from its various apps to bring out meaningful reports. ICICI's Pre-Delinquency management system collects all data of its loan and credit card customers who're likely to default and automatically creates easier payback options for them. Similarly, other banks have deployed different levels of BI to aid in analyzing their customers base better. Another 18% of the projects were Web-based solutions. These vary from simple things like an online portal or Internet banking services to SaaS or Cloud Computing based solutions. The banking and financial sector is using the web pretty innovatively to reach out to its customers. Take SimpliBank for instance, winner of the project with the maximum social impact this year. The company has deployed a complete CBS in the cloud, and is offering banking services to customers via mobile. Another case in point is NSE's NOW, which offers NSE's IT infrastructure in the cloud to its sub-brokers.
IT infrastructure optimization was the third kind of activity we found the BFS segment doing this year. These activities ranged from server consolidation to WAN optimization, Unified Communication, data center build-up, and even DR and BCP solutions. Here again, some of the approaches taken were fairly interesting. PNB for instance, took one PC from every branch's network and converted it into a BCP PC. In other words, this PC would maintain the latest records of that branch's customers. So even if a network link was broken, the bank could continue to provide uninterrupted services to its customers.
12% of the total projects submitted by the BFS segment were for business process management and automation. Here, the types of deployments range from automating a loan process to deploying a CBS across all the regional rural banks that come under a particular public sector bank. The other types of projects being deployed by the BFS segment include Green IT, security, mobility and field force automation, information systems, and even business apps like CRM and HRM. Here again, we saw everything from massive deployments that span the globe to small and simple deployments.
Tech used
Green hardware and the technologies that support and promote green IT are being taken into consideration while deploying new hardware. Essentially, blade servers from across the brands i.e. IBM, HP are extensively being used by BFS to consolidate their enormous data centers into leaner data centers. These blade servers save on the management costs along with high amounts of savings on cooling and power costs. They are available in high configurations supporting multiple instances of virtualised servers. Next in line are server operating systems. Apart from the varied instances of customized open source operating systems being used, most BFS companies were found to be using Windows Server 2008 R2 to run multiple virtualized instances of servers. As we know, most of the technical deployments regarding the BFS have to take into consideration the copious amounts of data that these organizations have. Through the BI application, an organization can run efficient reports and analyze data received from HR and payroll, CRM and BPM systems to track employee productivity, improve margins, review markets, and identify growth opportunities. Sybase IQ was deployed by most BI projects we received in this segment. Solutions from Salesforce.com and Oracle's PeopleSoft HRMS package also feature in the technologies being deployed by various banking and financial services companies. Microsoft Sharepoint solution also makes a mark as the solution for collaborative working.
Key challenges resolved
The main challenge that the banking and finance sector faces is the tough competition prevalent in the market today. Customer loyalties change with changing schemes from different organizations as these organizations cater to the basic pain point of every individual, which is to be able to manage his finances in such a manner that it is secure as well as gives him a good return on investment. To be ahead of the competition, the BFS needs to understand the nature of their customer and what could be the types of investment options that he might want to have. The IT deployments also follow suit and the IT department of these organizations have done enough and plan more in the future to be able to provide the business departments with the necessary data to go ahead and involve the customer more. Also, the customer wants to be able to manage his assets not only in an organized manner but the basic requirement is also the availability of information about his assets on the go. Internet banking, mobile banking solutions have been majorly deployed for this. Web based solutions which can be accessed over the internet and mobile, largely empower the customer to go paperless which essentially means better manageability and quick availability of information. The customer need not waste time by visiting these banking and finance institute premises. He can simply log onto the Internet and make transactions.
The old and rusted hardware that was being used had to be managed within times of recession but now since the recession appears to have been over, the organizations are again spending on their infrastructure. This is visible from the huge number of IT infrastructure projects received as nominations this time around. But the point to be kept in mind is that the organisations have been spending wisely. IT infrastructure is being upgraded and consolidated. Although it does bear a cost but these upgrades are being made keeping the future in mind.
Current application and service requirements are being fulfilled through the new hardware being purchased but high scalability and reliability is also kept in mind.
The BFS is aware of the fact that slowdowns are a reality and quick replacement of hardware may not be possible every time. Future proof and scalable hardware is being purchased with the green initiatives also being a high point of discussion.
Green technologies like blade servers and multiple virtualization instances not only lower the cost of operation but also contribute to the lowering of the carbon footprint which is soon set to become an area of concern.
Some of the other challenges cited by the key IT decision makers have been the reluctance to use new and improved methodologies in lieu of old tried and tested methods. There have been multiple instances of workforce reluctance to use IT but strong implementation strategies coupled with timely training have resulted in quick and effective adoption of IT techniques. It has also helped the BFS in being able to manage large chunks of transactions and data without human errors creeping in. Automation of multiple entities and Internet based self service modules provide error proof, time saving mechanism for the customers to manage their holdings. Minimal human intervention helps the employees to work on areas which require probing and where the work force is required.
As can be easily observed, the BFS is increasingly moving towards automation of all possible entities and IT is playing an increasing role in providing solutions. IT is working well as an enabler to the business problems that do or are most likely to crop up.
Date: 30th September, 2010
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