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.

Web-based solutions, IT infrastructure optimization, and business process automation & mgmt were the three areas where banks were active this year.

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.