Agile Financial Times October 2009 Edition

8/14/2019 Agile Financial Times October 2009 Edition

1/20

AGILIS 1KEY BI Suite

Bancassurance

CUSTOMER SPOTLIGHT

PERSPECTIVE

Bancassurance

Reliance Mutual Fund

Business Intelligence

in BFSI

AgileFINANCIAL TIMES

October

2009

SOLUTION SPOTLIGHT

AGILIS 1KEY BI Suite

Emergence and Global Trends


2/20


3/20

Be Agile!

Shefali Khera

Chief Marketing Officer

Write to us at [email protected]

CONTENTS

Editors Note

CUSTOMER SPOTLIGHT

Reliance Mutual Fund 4

COVER STORY

Bancassurance -Emergence and GlobalTrends 6

NEWS

Global Update 10

PERSPECTIVE

Business Intelligence inBFSI 12

SOLUTION SPOTLIGHT

AGILIS 1KEY BI Suite 15

October 2009


4/20

Reliance Mutual

Fund

Leveraging data for analytics

4

Reliance Mutual Fund is India's

largest mutual fund company,

and is part of the Reliance AnilDhirubhai Ambani Group.

On the equity side, it has the

largest workforce, comprising

economic teams, separate core

teams and fund managers.

Reliance Mutual Fund (RMF) is one of India's leadingmutual fund companies, with Average Assets UnderManagement (AAUM) of ~ INR 11.7 bn and an investorbase of over 7.4 million individuals.

The Challenge

As part of its regular business operations, RMF carries outhigh level research for more than 500 companies. As a result,huge amount of data is generated, posing a challenge interms of analysing this data and developing different reportsfor various stakeholders. The existing IT systems werestruggling to handle this, and would generate static reportsfrom within the application, which could not be viewedunder different scenarios.

Though the CRM solution had reporting capabilities, itwould often fall short when it came to providing detailed

reporting.

Project Background

RMF found it a significant challenge to handle the scale ofdata and make analysis and insight available to users across180 locations. Some of the issues they faced included:

analysing the data of 7 million customers andunderstanding their behavioural patterns

Lack of real-time access to decision making information,due to which productivity of business users was

adversely impacted. Inability of end-users to consolidate data being gathered

through sales activities and campaigns, mapping it to theCRM and then preparing reports.

CUSTOMER SPOTLIGHT


5/20

5

CUSTOMER SPOTLIGHT

Supplier Selection

RMF was actively searching for a Business Intelligence (BI) tool that would beeasy to learn, use and deploy across the enterprise. It evaluated a couple oftraditional BI tools but found that they had some serious limitations. They weremeant for a select few expert analysts, difficult to deploy and involved excessivetime for training users. RMF chose 1KEY Agile as the front-end tool, as theinterface was similar to Excel, yet powerful enough to deliver on-the-fly reportrequirements of the business users. In addition, as 1KEY Agile was developedon the Microsoft .net framework, it could be easily deployed on the Windowsplatform which was being used at RMF. The fact that the deployment wouldtake only a couple of days worked in favour of the application during theselection process. The timeframe for the implementation across the enterprisewas just one month, with a day required for technical and functional training ofthe fund managers and research team.

Implementation

The technology involves multiple database access that was made available toend-users, who were identified by the BI team at RMF based on theirrequirements and subsequently mapped to 1KEY Agile. Information wasconsolidated across all internal applications, including portals. Usermanagement was implemented through Active Directory, which is supportedby 1KEY Agile, and was deployed on Citrix server for faster deployment andinstant access to web-based reports. 1KEY Agile was made a standard interfacefor all reporting and analysis requirements, a decision which helped RMF saveenormous time and the trouble of building custom reports. 1KEY Agile wasfound to be similar to Excel in terms of ease of use, at the same time offeringbetter features and better control on the data. It has become a standard

interface that gives flexibility and has considerably reduced the learning curve.

Business Benefits

With 1KEY Agile, RMF can generate different types of reports for varioususers involved in equity research based on their roles, albeit from the same data.The RMF team is very happy and satisfied with the 1KEY Agile deploymentand the fund managers, who need to modify their queries at various stages oftheir decision-making process, find it very easy. Reports that earlier requiredintervention from the IT department and took 15 minutes, are now beinggenerated by business users in a fraction of that time. Marketing and operationsteams, fund managers and research teams, all log in to 1KEY Agile to generatereports and access all their applications. The ad hoc reporting facility from

1KEY Agile has been found to be the most valuable and sought-after feature.Sales teams are now using 1KEY Agile to effectively sell funds to distributors,as it gives them the ability to quickly generate historical reports to target andqualify specific advisors. RMF also uses 1KEY Agile Scheduler extensively tosend scheduled reports via e-mail. Due to its comprehensive capabilities andremarkable flexibility, 1KEY Agile has taken immense pressure off the IT teamand has given users the freedom to self-serve themselves.

Conclusion

1KEY Agile has been instrumental in increasing operational efficiency at RMFsubstantially. In a phased manner, RMF plans to extend the usage of the

application to all its users, including sales teams, distributors as well as all thebranches. With 1KEY Agile, RMF was able to save cost and turn-around-timerequired to cater to the reporting needs of the fund managers, research teams,MIS team, risk team, operations and IT.

The RMF team is

very happy and

satisfied with the

1KEY

deployment and

the fund

managers, who

need to modify

their queries at

various stages of

their decision-

making process,

find it very easy

now.


6/20

6

Emergence and Global Trends

Bancassurance is a

comparatively new

phenomenon in the financial

world and may have slightly

different connotations across

the globe, as it takes into

consideration many regulatory

and legal aspects.

In essence, bancassurance

refers to the partnership of an

insurance company with a

bank, where the former uses

the latter to refer, sell and

distribute insurance products

and services. The insurance

company trains and advises the

bank staff, with both parties

sharing the commission.

Bancassurance

Bancassurance emerged when a mature banking industry in France aimed atadding value to services for its customers, and decided to offer customers a one-stop shop to cater to all their financial requirements. With a positive impact onprofits, customer loyalty and diversification, the concept achieved a lot of successin the country, as is evident from the large number of French bank groups havinglife insurance subsidiaries. Another manifestation of the popularity ofbancassurance is that French bancassurers premium collection increased from 37percent of all life insurance premia in 1990 to 64 percent in 2006. Other non-lifeinsurance premium shares have also registered increases. The success has beenattributed to the capacity of retail banking networks to sell individual policies.

Banks are using success in life-insurance to build on their other services.Innovations in the form of non-standard policies such as company savings plans,death/ disability/ care/ illness insurance policies, property and vehicle insurancehave been introduced, depending upon the demographics of a region. Accordingto the European Life Bancassurance Review released by Milliman, bancassurancein France has maintained its market share as tax and regulatory changes wereoptimized adequately. Innovative products and services for customers andcreation of new opportunities helped sustain the growth.

After France, other European countries followed suit, with Spain and Austriabeing among the more successful. According to other findings of the Milliman

report, bancassurance was found to be a major distribution channel in Europe,accounting for over 60 percent of individual life insurance premiums in France,Italy, Portugal and Spain, and over 50 percent in Belgium. Countries such asUnited Kingdom and Germany have had limited success.


7/20

Over all, an extremely supportive regulatory framework, well-developed banking network, simple and innovativefinancial products, and strong relationships with banks havehelped in making bancassurance successful.

Concept Globalization: Mixed Response

Bancassurance has gained prominence and acceptance inother parts of the world only in the last few years. Manygovernments delayed their decision to allow banks to takeup insurance for the fear of giving them too much controlover financial markets.

The 2008 study by the American Bankers Insurance Association, in cooperation with Reagan Consulting, onBanks in Insurance revealed that 96 percent of bankscurrently distribute insurance products and believe that

insurance businesses add value for bank shareholders andabout 40 percent reiterate saying it adds "significant" value.

However, the progress of bancassurance has been slow inthe United States. As the industry coped with regulationsthat were not very favourable, banks attempted to achievesuccess more through distribution rather than throughinnovation. Penetration has been low as marketing initiativesto increase awareness among customers lacked efficacy.

Latin America

The European bancassurance model was successfullyreplicated in Latin America. Insurance penetration is low inthe region in the range of 5 to 8 percent. Regulations vary incountries in the region but most allow the sale of insuranceproducts to a banks customer base with certain restrictions.

For instance, Argentinian law requires the presence of anintermediary when selling insurance to a bank customer,while Chile does not allow direct sales to a banks customerunless such sale is incidental to a banking product.

The region needs to focus on making the distributionapproach more effective. Bancassurance is gaining

importance as a distribution channel in the region and itssuccess can be attributed to the following factors:

Emphasis on advanced financial market integration; Structural changes in the financial markets and insurance

industry; and Entry of experienced foreign insurers.

Brazil and Mexico dominate the Latin American insuranceindustry. Mexican insurance market generated more than 25percent of the total premiums in the region and the countryregistered an increase of 16 percent year on year in net

written premiums in the first nine months of the last fiscal.

Life insurance product sales through the bancassurancechannel played a major role, with penetrations close to 80

7

COVER STORY

Clive C R Bannister, Group Managing Director of

Insurance at HSBC Holdings plc, recently spoke at an

industry conference. Here are a few thoughts from his

speech, 'Delivering Growth through Bancassurance':

Bancassurance success comes from identifying a

customer need and providing key products, and is

strategically logical in the process of broader wealth

management. Bancassurance knows and touches

more client's financial needs than any monoline insurer.

There is a strong rationale for banks to focus on selling

insurance products. People who are over 50 years old

possess 70 percent of all financial assets. With better

healthcare, the longevity of population globally is

moving upward. These individuals need protection

(insurance) and advice on investments - not more

borrowing, thus building the case for life, pensions and

investment products.

Bancassurance also helps in internalising profits that

are otherwise paid away to an agency sales force, and

is a winning strategy because -

Customers want 'one-stop shops' that offer a full

range of banking, pension and investment products

to meet their total financial needs.

Most international banks have strong brands and

capital resources, which promote and provide good

financial certainty and long term risk protection,

respectively.

Banks have access to significant customer bases in

all major markets.

Banks possess appropriate channels e.g. branch,

sales forces, direct marketing and internet banking.

Insurance is a logical 'add-on sale' to loan products. Insurance allows banks to diversify earnings from

interest to fee-based income.


8/20

percent of the total life market in Brazil. A number of joint ventures are active in the region, some of the prominentones being Bancomer and Aetna in Mexico, Banorte andGenerali in Mexico, AXA and BCI in Chile.

Asia

Asia has been a region of high growth, primarily due to theIndian and Chinese markets. Changes in policies and otherregulations are fast paced and bancassurance stands tobenefit.

As part of a pilot program launched in April 2009, four largestate banks in China will be allowed to operate insurancecompanies. "We have reached an agreement with theinsurance regulator on allowing banks to set up their owninsurance companies, and the big four banks will be the first

to run it on a pilot basis," said Lai Xiufu, an official from theChina Banking Regulatory Commission (CBRC).

With the insurance sector growing at about 20 percentannually, even mid-sized banks are looking to capture theopportunity. According to Daniel Wong, analyst at Moodys,a positive longer-term growth of bancassurance in China isexpected.

With the growing demand for insurance products and theexisting low level of bancassurance penetration of themarket coupled with the banks capability to reach

customers through their extensive branch networks, will allwork in favour of the industry.

Similarly, the constitution of a panel by the InsuranceRegulatory and Development Authority (IRDA) in India, toexamine the need for a separate regulation for thebancassurance model indicates the interest generated in thecountry. The panel will evaluate the current regulatoryrequirements for banks that allow them to tie up with onlyone life insurance company and one general insurancecompany for bancassurance, which is restricting the growthof this industry. India has a strong network of banks in thepublic, private and co-operative sector, but a dismal 3 to 4

percent insurance penetration rate.

The Japanese market is dominated by agents and has one ofthe highest rates of insurance penetration. Other countriessuch as Korea, and the Philippines have only recently startedto experiment with this channel of insurance delivery.

Africa

Bancassurance has been introduced in the recent past inmost African countries, with private players tying up withvarious banks and insurance companies to set up operations.

The insurance penetration level in most countries in thisregions is abysmally low.

Bancassurance has been stated to be the fastest growing

revenue stream for banks in Africa. For instance, StandardChartered Bank recently entered into a deal with Sanlam tooffer insurance in five African countries. These countrieshave also been identified as regions that have potential forsuccess in bancassurance as consumers become more andmore demanding.

Standard Chartered, which is considered by many to be afront runner when it comes to innovation, plans to tap thismarket by offering policies that will appeal to the region and will cover illness, funeral expenses, savings, education andlife insurance.

Middle East

Insurance products could be a major source of revenue forbanks in the Middle East, but call for changes in legislation

and internal processes. Bancassurance is still in its nascentstages of development in many Middle East countries.

According to an industry expert, bancassurance has theability to generate 50 percent of a banks fee-based incomeand considers legal issues as the major stumbling block to itsgrowth in the UAE.

Going Forward

Markets that are greatly liberalised and have higher insurancepenetration have not really been able to showcase similar

success when it comes to bancassurance. Bancassurancetypically works better under a regulated environment wherepenetration is low and closer interaction with customers caninfluence decisions.

Technology is also expected to play a major part in thegrowth. Different needs of different models create achallenge for users, both for insurers and banks.Automation, quick access to clients, flexibility to cater to theentire value chain, are some of the facilities that technologycan enable.

Globally, there is considerable debate about best practices

for bancassurance. It needs a strong backing of regulatorymeasures, and banking and insurance policies that can aid itsgrowth. To sustain growth the service needs to build on theexisting advantages of its ability to cross sell to the largebase of bank customers, get huge volumes in exchange fora marginal commission paid to banks and be able to use theexisting bank infrastructure.

Markets that have recently introduced this service can expectto witness a large number of mergers and acquisitions asplayers with the capacity to service high volumes will capturenew markets.

Similarly, the ability to innovate in order to cater to regionalrequirements and experience in other markets will helplarger players to capture a greater market share.

8

COVER STORY


9/20

9

COVER STORY

Making Bancassurance AgilePresentation at the 4th Annual Bancassurance Conference in Vienna

Kalpesh Desai, CEO of Agile FT, recently spoke at the

4th Annual BancAssurance Conference in Vienna,

Austria, on Making Bancassurance Agile.

The audience included senior representatives of the

banking, insurance and financial services globally who

travelled to Vienna specially to attend the conference.

Captured here are a few highlights of the speech:

Bancassurance has now grown to become one of the

largest distribution channels for insurance companies

across the globe. In order to reduce dependence on

interest-based income and alleviate the effects of

increasing competition and declining margins, banks

too have been actively exploring different avenues to

generate income, hence their interest in cross selling

insurance to their incumbent customer base.

With an increasing number of insurance companies and

banks partnering to explore this business model, thecompetitive pressure on productivity, efficiency and

customer service standards has led to an aggressive

adoption of technology. On one hand, the alignment and

integration of various processes have resulted in

helping insurers and banks to achieve seamless

integration, while on the other hand, technology has

been a key enabler of customer segmentation and

superior service delivery.

The recent trend among BFSI companies in general and

bancassurance providers in particular is to move

towards technologies which offer higher variability in

expense control.

With platform-enabled outsourcing emerging as the

definitive model for many banks as they strive to lower

operational costs to ensure a high return on investment,

there is no better time than now, to leverage

functionality-rich application software platforms!

Platform-enabled service has evolved from the

software-as-a-service model and is a step ahead. It

provides a completely flexible and configurable platform

to create, run and operate applications. Applications

include design, development, testing, deployment,hosting, and application services such as security,

scalability and versioning. All this is completely available

as an integrated suite from the internet, where no

software or installation downloads are required.

In addition, with the Infrastructure-as-a-service model,

there is no need for corporations to allocate capital

expenditure to purchase servers, software, and data

centre space or network equipment, but instead they

can buy these resources as a fully outsourced service.

In a scenario where most banks and financial

companies are already straddling a host of legacy and

fragmented systems within their own set-ups,

technology imperatives for bancassurance may seem

to be prohibitively high. Meanwhile, companies active in

strategic bancassurance partnerships continue to seek

technology which can provide the necessary fuel to

enhance flexibility in adopting, integrating and

implementing change. Technology that can provide all

this without "locking-in" companies in heavy

investments will help bancassurance providers become

truly agile.

Financial institutions need to ask themselves - are we

taking advantage of the benefits that can be soughtfrom this model in order to stay ahead of the

competition and drive innovation?


10/20

results in huge savings in terms of travel costs as well astime, for the users. To facilitate an efficient flow of funds,Nokia is building a wide network of Nokia Money agents,

where consumers can deposit money in or withdraw cashfrom their accounts. "We believe mobile financial servicesoffer a market opportunity with long term growth potential.With more than 4 billion mobile phone users and only 1.6billion bank accounts, global demand for access to financialservices presents a strong opportunity to combine mobiledevices with simple but powerful financial services such asNokia Money", said Mary McDowell, EVP and ChiefDevelopment Officer, Nokia.

The Decoupling Debate

Decoupling alludes to the phenomenon that emerging

markets in Asia and elsewhere would remain indifferent tofunding received from the Western world and that theireconomic growth would no longer be a function of thehealth of the industrialised world. The belief that emergingeconomies had decoupled because of the existence ofstrong domestic markets, high currency reserves andprudent macroeconomic policies, bit the dust as the WallStreet meltdown set the global financial system trembling, Asian markets notwithstanding. So though it may still bepremature to declare decoupling, business cycles in Asia,especially East Asia, are fast moving towards more cohesivefinancial linkages. As the regional economies integrate, trade

as well as production accelerate, and consumer marketsdevelop, it is felt that Asian economies will reduce theirdependence on the US and European economies. Thiscoupled with dollar de-linking may well lead to decoupling.

Global

UpdateA quick review of industry news from

around the world.

Recession 'very likely over' - Federal Reserve

According to the Federal Reserve Chairman, Ben Bernanke,

the worst recession to hit the world since the 1930s, isprobably over. Bernanke cautioned however, that eventhough the economy is likely to show some growth now, itmay not be enough to prevent the unemployment rate fromrising, which is currently at a 26-year high of 9.7 percent.Bernanke expressed confidence about the ability of theCongress to avert any future crisis and that it was willing torevamp the nation's rulebooks in order to do so. "I feel quiteconfident that a comprehensive reform will be forthcoming.It has been too big a calamity over the past year, with thenear meltdown of the US financial system, for Congress notto take action," reiterated Bernanke. He found support inPresident Barack Obama, who urged the Congress to enact

legislation this year. Though official confirmation is awaited,many analysts have predicted that the economy which hadcontracted at a 1 percent pace in the second quarter, isgrowing at an annual rate of 3 to 4 percent in the currentquarter.

Nokia Money - Making Mobile Payments

Happen

Nokia Money, a new mobile financial service is a simple andconvenient medium through which consumers can sendmoney simply by using the receiver's mobile phone number.

The service allows consumers to pay suppliers for goods andservices rendered as well as pay their utility bills, or evenrecharge their prepaid SIM cards. The service includesaccessibility 24 hours a day from any location. This in turn

10

NEWS


11/20

Bank of England Sees Silver Lining

According to a senior policy maker at the Bank of England,the British economy could resume its tread on the growthpath as early as the next six to nine months. However, thereis an underlying cautionary note, that this growth may stillnot prevent unemployment from rising for at least a fewmore months. According to David Miles, an externalmember of the Bank's Monetary Policy Committee, theremay be a few quarters where the economy could witnesssmall increases in the GDP. Technically, this implies that thecountry could be out of recession in six to nine months. But,he also indicated that the current levels of spare capacity andlow inflationary pressure may keep the interest rates at lowlevels and it would take a while to rebuild the banks' cashand reserve levels.

CIC to Acquire Stake in Noble Group

China's sovereign wealth fund, China InvestmentCorporation (CIC), proposes to buy a 15 percent stake inNoble Group. It is proposed that US$850 million worth ofnew and existing shares of Noble will be sold to CIC at 8.1percent discount to the last traded price. CIC has decided toincrease investments in commodities after it earlier lostmoney on financial firms including Blackstone Group LPand Morgan Stanley. Noble, the Hong Kong-based supplierof commodities, will benefit from China's demand for coal,iron ore and soybeans. The second-quarter profit at Noble

doubled as China boosted raw material imports to fuelUS$586 billion of stimulus spending needs. China is theworld's biggest buyer of commodities including soybeans,soybean oil, cotton, iron ore, aluminum, copper and zinc.

Asia to Lead the Bounce Back

Asian Development Bank (ADB) in its flagship publication,Asian Development Outlook (ADO) 2009, says that Asia isproving to be more resilient to the global downturn than wasinitially thought. The update to ADO forecasts economicexpansion in developing Asia to come in at 3.9 percent in2009, up from the 3.4 percent expected in March. In 2010,

the growth projection is likewise upgraded to 6.4 percentfrom 6.0 percent. Stronger growth in East Asia and South Asia underpinned the improved prospects. This can beattributed to a number of factors such as affirmative actionby many governments and central banks, the existence ofrelatively healthy financial systems prior to the global crisis,and the rapid turnaround in the region's larger, less export-dependent economies.

Uruguay Sells Bonds in Overseas Markets

Uruguay sold US$500 million of bonds maturing in 2025 in

its first international debt issue in three years. Uruguayissued the 16-year bonds to yield 340.3 basis points abovethe US Treasury, according to data from Bloomberg. Theissue is the first since October 2006, when the government

sold US$500 million in a re-opening of its 7.625 percentbonds due in 2036. The South American country tappedoverseas debt markets amid a rally in emerging-market debt,sparked by a recovering global economy. The country'soffering follows a US$1.75 billion debt sale by Mexico last week. Uruguay is also preparing to hold presidentialelections in the end of October and Latin Americancompanies have stepped up debt sales this month. PetroleosMexicanos, the largest oil producer in Latin America, soldUS$1.5 billion of 5.5-year bonds, while Brazilian iron-oreminer Vale SA sold US$1 billion of 10-year bonds.

Iran to Replace the Dollar with the Euro

Iran's President, Mahmoud Ahmadinejad, has ordered thereplacement of the US dollar by the euro in the country'sforeign exchange accounts. As per a report from the Mehr

News Agency, the September 12th edict was issuedfollowing a decision by the trustees of the country's foreignreserves. Since the introduction of the euro by the EuropeanUnion, the euro has gained popularity internationally andthere are now more euros in circulation than the dollar. Themove will also help decouple Iran from the US bankingsystem.

Higher Tax - Indicator of Faster Recovery?

Indian companies have paid twice the amount of tax thisquarter as compared to the last, fuelling discussions that

growth in the Indian economy may be accentuated. Advancetaxes paid by corporates was at INR 440 billion in the July-September quarter.

United Korea - a Force to Reckon With?

According to Goldman Sachs, a united Korea, which impliesthe coalition of Asia's fourth biggest economy with one ofits poorest, forms an economy that could surpass that ofGermany or Japan in terms of GDP, within the next threeto four decades. Although North Korea's economic systemappears to be on the verge of a collapse, it brings in its wakehuge mineral resources and a large, cheap workforce. Even

though this reunification may not be without risks, GoldmanSachs feels that it can be made viable by restricting interKorean migration and adopting policies similar to those inthe case of Hong Kong/China.

Reduction in China Export Slowdown

China had been experiencing a decline in exports sinceNovember last year. However exports from China fell attheir slowest pace in nine months in September 2009. Theshipments from China dropped 15.2 percent to US$115.9billion as compared to September 2008 (a recent survey of

economists had estimated the average decline at 21 percent). The fall in the rate of exports decline was mainly onaccount of shipments to the US and the European Unionpicking up.

11

NEWS


12/20

Supported by the latest technology, banks are striving toidentify new business niches in order to develop customisedservices, implement innovative strategies and capture new

market opportunities. With further globalization,consolidation and turmoil in the financial industry, thebanking sector is becoming more complex by the day.

Furthermore, the modern financial industry has broughtgreater business diversification. Some banks in theindustrialised world are entering into investments,underwriting of securities, portfolio management and theinsurance business. All put together, these changes havemade banks a potent entity in the global businesscommunity.

Business Challenges

The evolution of the financial services industry is fraught with challenges and opportunities. Over the last severalyears, financial modernisation, industry consolidation, risingnew institutions, shifting trends in borrowing and lendingand emerging technology, have influenced and affected theoperation of financial institutions.

Institutions are in a perpetual balancing act with credit riskson the one side and satisfying the changing needs of theircustomers with a wide variety of products, such asmortgages, home equities, credit cards, lines of credit,

savings and checking accounts, insurance and investmentproducts, on the other.

In addition, with money laundering on the rise around the

Business

Intelligence in

BFSI

Gateway to greater profitability

- Sanjay Mehta, CEO, MAIA Intelligence

The banking and financial

services industry, like manyothers, is changing

fundamentally and is in a state of

rapid transition. Banks have

become complex financial

organisations offering a wide

variety of services to

international markets and

controlling billions of dollars in

cash and assets.

12

PERSPECTIVE


13/20

world, regulatory response has also increased. It focuses onan institution's lack of consistent internal controls, poorgovernance and oversight. Financial institutions need to beable to estimate and review risk and compliance withregulations such as Basel II and mandatory capitalrequirements. Now, more than ever, banks need betterunderstanding of key indicators and best practices fordecision making in all areas of operations, including:

Improving customer service and retaining customers Acquiring new customers using competitive market

initiatives Enhancing sales and service Pricing and analysing return on investment Managing risk and preventing fraud Drawing financial flows, valuations and forecasting

Technology Challenges

Apart from their core solutions, organisations need to havesoftware applications, preferably based on a service-orientedarchitecture (SOA) addressing data and informationmanagement to proactively analyse and learn from largevolumes of transaction data.

The primary challenges that a typical bank or financialservices company would face are:

Consolidation - Data for reporting typically resides in

multiple systems with no interface between theseapplications. While the data is refreshed on a daily basisin one application, the previous day's data is lost if notloaded in the central data warehouse. Companies need toinvest in an ETL Tool.

Volume - A large number of reports are required on adaily/weekly basis for the ongoing sales, marketing andcustomer campaigns and schemes.

Industry Solution

Fierce competition, sharp decline in margins andprofitability, tighter regulatory and disclosure norms and the

need for robust risk management and early warning systemshave compelled organisations to look at data warehousingand business intelligence solutions to manage theirbusinesses more efficiently and effectively.

Companies use data warehousing solutions normally forprofitability analysis and to enhance their risk managementcapability. They use customer relationship management(CRM) solutions to enhance their ability to manage andgrow their customer base in the most desired manner.

In the Indian context, most banks have already implemented

or are in the process of implementing an enterprise-widecore system to facilitate processing of transactionsseamlessly across the enterprise. Many of them have alsoaggressively implemented a multi-channel delivery capability

including e-commerce and ATMs. Deploying a datawarehousing and business intelligence capability will be thelogical and immediate next step for banks in their strategicuse of information technology.

Business intelligence aids organisations with critical insightsinto core business strategies and strategic policies. It revealsconcealed trends in the past as well as the present andreveals future obstacles that the company may not haveotherwise been aware of.

Traditionally, financial institutions have invested money andeffort in predictive and descriptive models to understand keyinfluencers and predict changes in the business by analysingthe data collected in daily business operations. Businessintelligence may be used to design reports and executivedashboards as well as to understand risk and fraud,

determine marketing return on investment and improvebusiness operations at every level. Global competitiveadvantage requires highly developed data analysis to improvecustomer profitability, manage risk, reduce operating costsand provide better service offerings.

CRM solutions, when implemented and integrated correctly,can help significantly in improving customer satisfactionlevels. Data mining helps the industry to analyse andmeasure customer transaction patterns and behaviour. Thiscan aid in creating forward-looking suggestions that willhelp to:

Segment and predict behaviour of homogeneous groupsof customers

Detect patterns of fraud Identify causes of risk, create sophisticated and

automated models of risk Uncover hidden correlations between different

indicators Create models to price futures, options and stocks Optimise portfolio performance

What Can Business Intelligence Do for You?

The ability to make fast and reliable decisions based onaccurate and usable information is essential to all businessenterprises.

Business intelligence provides the user with a competitiveadvantage as it supplies timely information about customerrelations, markets, suppliers, emerging trends and patterns,thereby delivering the right information to the right personat the right time.

In addition to greater profitability, business intelligenceprovides the following business benefits:

It helps in identifying loyal customers with better abilityto sell services that address specific customer needs

It allows for differentiation in the eyes of a customer

13

PERSPECTIVE


14/20

It facilitates better exploitation of changing andwidening markets

It uses a customer centric approach focused onoptimizing the lifetime value of the customer

It allows concentration on financial budgeting, costcontrol, and risk management

It looks at new ways to minimise costs, while increasingprofitability and shareholder value by effectivelymanaging consumer relationships

Customer Analytics

Customer Segmentation Analysis Customer Loyalty Analysis Customer Credit Scoring Customer Life Time Value Customer Churn Analysis

"Recency", Frequency and Monetary Analysis

Customer analytics helps the company acquire idealcustomers, maximize customer value, determine and retainprofitable customers, identify ideal customers for cross-selling techniques, manage risks, identify the time of the year when customers get raises or bonuses so that financialschemes like bonds and term deposits can be timed better.

Marketing Analytics

Product Preference Study

Attribute Preference Mapping Market Segment Analysis Target Market Identification Market Basket Analysis Campaign Performance Management - Leads analysis,

Sales and Retention Benefit Analysis, Product wisebreak-down of Sales and Retention

Marketing analytics can help the banking and financial

services industry effectively track and optimise theperformance of the campaign and its components, measurethe performance of the campaign in terms of sales benefitand retention benefit, access and track cost per lead,calculate revenue and return on investment, improve leadquality through segmentation, streamline lead generationand sharing, track the status and outcome of referrals insales pipeline, compare status of in- progress referrals overmultiple time periods, explore the possibility of a newproduct or service in a particular market segment

Operational Analytics

Call Centre Operator Scorecard - number of questionsactually asked as against standard number of questionsto be asked

Lead Activity Exception Report

Leads Delivered Report

Operational analytics prevents crucial data from getting lostby loading it in the data warehouse using an ETL tool.

Also, the reliable data reports along with their graphicalformat, aid in effective presentation, analysis and correctiveaction by the management. The deployment of such reportsresults in considerable time saving.

Performance Analytics

Number of loan accounts Average loan amount per branch Loan to deposits percent Current recovery rate percent per branch Non-performing assets percent

Performance analytics results in better loan management,interest income management and credit risk management.

Loan management results from taking into cognisance ofvarious aspects such as the average loan amount per branch,the type of loan taken the most, the customer segment thatdefaults the most, the current recovery rate, annual loan-loss

record, average outstanding amount per customer oraccount, total non-performing assets, loans that havedefaulted the most, the share of non-performing assets perbranch, etc.

Interest Income management accounts for aspects suchas interest income generated through loan accounts, interestincome generated through inter-bank loans, branchesearning the highest interest income, high income customersegments, etc.

Credit Risk management looks into the loans of various

types that are approved by different branches, the reasonsfor which loans are rejected, percentage of delinquent loans,distribution of delinquent accounts by buckets, andpercentage of delinquent accounts written-off.

14

PERSPECTIVE

About the Author

Sanjay Mehta

CEO, MAIA Intelligence

Sanjay leads a team of

technocrats with a vision to

change paradigm in the

business intelligence (BI)

space and make it available to

the masses. Sanjay has 14 years of experience in

the software product business. Sanjay, who holds a

Bachelor of Engineering Degree in Electronics fromMumbai University, is a Microsoft Certified

Professional and ISB Alumni.


15/20

15

SOLUTION SPOTLIGHT

1KEY Agile

BI SuiteA business intelligence solution from

Agile FT

1KEY Agile BI Suite is a comprehensive BusinessIntelligence (BI) application catering to the strategic, tacticaland operational levels of data analysis and reporting needs

of multiple vertical industries. It is a single layer, inter-operable, ground-up built, end-to-end BI product. Anintegrated offering with modules to pick and choose from, itenables organisations to deploy the BI framework withminimal investment.

Features

Scalable and adaptive SOA Dashboards and visually stunning reports Dynamic Expression and Query Builder for ad hoc

reports Connects to multiple applications and multiple databases Performance to handle silos of data Intuitive and friendly user interface

The BI framework may be implemented through the use ofone or more of the following modules:

Online Analytical Processing

1KEY Agile Online Analytical Processing (OLAP)transforms raw data to reflect the real dimensionality of theenterprise as understood by the user, and gives remarkableperformance on the ever growing size of the databases.

It connects to and synchronises with multiple raw databasesand creates an OLAP database in a user desired flavour. It isakin to having a middleware engine, where the data can be

A successful BI tool must

provide a highly interactiveinterface, flexibility and intuitive

reporting that facilitates decision

making. In addition, users must

be able to access any or multiple

enterprise data sources.


16/20

restructured and cleansed, allowing the users to create theirown OLAP Data-Warehouse with ETL Process. Theadvantages of OLAP include:

Calculations and modelling applied across dimensions,through hierarchies and/or across elements

Trend analysis over sequential time periods Slicing subsets for on-screen viewing Drill-down to deeper levels of consolidation Reach-through to underlying detail data Rotation to new dimensional comparisons in the viewing

area

1KEY Agile TREE

The solution has an intuitive visual data representation ofOLAP and raw data in a hierarchical tree based drill down

expandable structure. 1KEY Agile TREE is used to drilldown into a number and see the relative importance of eachof its constituent parts. While drilling down into anydimension at any node in the tree, the OLAP client ranks thenext level of detail from left to right by value and percentageof the total. Hence, the user can readily grasp the relativeimportance of any group of products, sales regions,customers, or any other dimension of the cube. Theadvantages of 1KEY Agile TREE are:

It allows users to read OLAP models, SSAS cubes,query-based OLAPs.

It is built on the concept of on-demand load whichincreases performance. It allows users to do further filters, displaying the results

in charts, setting other aggregates like percentage andmin/max counts, and also export and email. Users cansave their own layouts or what they drill from any othermodel.

1KEY Agile CUBE

The solution is a comprehensive data analysis, data mining,and multi-dimensional visual reporting solution. It is apowerful tool conceived to help business users understandtheir data, compare and contrast scenarios, and deliver thisinformation inside and outside of their organisation. Themodule has the "rapid-in" memory cube which representsraw data for multi dimensional analysis.

With 1KEY Agile CUBE, the user can visualise multiplecharts within cubes based on selected data. Users can drilldown into raw data in any manner they require using theeasy-to-understand pivot table functionality like in Excel,and instantly render the desired output. The advantagesinclude:

The powerful data architecture allows the customer toslice and dice information efficiently and provide for anextremely intuitive experience.

Regardless of the perspective, data can be rendered toanswer business questions - and it allows business usersto focus on business rules rather than creating dozens ofreports.

It has numerous runtime customisation options thathelp users to create on-the-fly reports and layouts with various permutations of dimensions for runtimeanalysis.

1KEY Agile VIEW

This module provides users the flexibility of analysing dataand creating complex reports of great business value. It hasbeen engineered to fully address the BI needs and reportingrequirements of an organisation. The advantages of thismodule include provision of two-dimensional tables forruntime analysis, grouping and column customizations withparent-child relationships, drill down and drill backfunctionalities.

1KEY Agile CHART

1KEY Agile CHART is a graphical representation and visualreport which represents business performance throughmeaningful diagrams. It helps drive organisationalachievements by giving information in a consolidated andeasy to understand manner. Its advantages include:

Capability to filter and change the chart type (column,bar, line, pie, dial gauges, speedometers, heat maps andmany more data visualisation methods) on run time toderive more value from data available directly from thegraphic representations.

Customer segmentation, forecasting and trend analysis

are all made easy for proactively managing andmonitoring business processes.

Run-time user definable drill down and drill backfunctionality.

16

SOLUTION SPOTLIGHT


17/20

1KEY Agile Key Performance Indicator (KPI)

KPIs are high-level snapshots of a business or organisationbased on specific pre-defined measures. Typically acombination of reports is needed to correctly depict andmeasure KPIs. The reports may include global or regionalsales figures, personnel statistics, real-time marketinformation, or anything else that is deemed critical to anorganisation's success. In developing KPIs, a user ordeveloper defines target performance levels and thendecides the best way to represent variance from that target.Business users are empowered to set the KPI values on theirown without depending on the IT team. The advantages ofthis module include:

Visualisation of key performance data effectively withgraphical pointers

Convey performance results quickly with visuals Monitor red zones and define threshold levels to set

indicators and trigger alert deliveries Link individual KPIs to corporate goals Allow goals to be observed with the help of different

warning metrics which switch on as defined, and give theuser a quick view of how well or how poorly each goalis met.

Give business executives a high-level, real time view ofthe health of a company by visually displaying vitalstatistical information about the company.

1KEY Agile DASHBOARD

This module gives a single window view of all types ofnumbers, facts and figures in multiple ways, and provides formulti-data presentation. Users can define their ownDashboards with a combination of multiple reports on onesingle screen. The advantages of this module include:

The dashboards, which are lightweight extensions, wouldaccess only the required portions of data and be rapidlybuilt.

The value is high as data can be disseminated quickly toa large number of employees and thus eliminates the

need for labour intensive data gathering workflows.

1KEY Agile TICKER

1KEY TICKER is an enterprise alternative to YahooWidgets, Google Gadgets, Vista Sidebar, Apple Dashboard.What makes it stand out is that it is part of a BI reportingsolution with presentation layers which are similar toconsumer applications. This module is meant to beamcommercial enterprise data (which could be across multipleenterprise data sources) to all authorized users. Theadvantages include:

It is a handy application which can bring life to thedesktop and change the way users work with reportingdata. It does not affect the desktop's performance or

jeopardise the commercial data in any way. It authenticates the user with a 1KEY Agile server with

all permission rights and then beams role-based data in ascheduled manner.

1KEY Agile REPORTER

1KEY Agile REPORTER is a client-side application thatbuilds reports based on query model. Using a simplifiedinterface, one can link multiple queries and create on-demand reports. 1KEY Agile REPORTER is a genericreport writer for designing compliance reports, pre- printedforms, vouchers for printing and viewing. The advantagesinclude:

Developers can drag and drop fields to arrange datafields on a page intuitively.

It gives freedom to create a range of simple to complexreports.

The intuitive reporting integrated developmentenvironment allows the developer to do multiple eventformatting, runtime scripting for each cell with J#, C#and VB.net.

It has formula and function editors which can be

embedded with reports and enhanced formula buildershaving VB Functions, as well as Financial, Math,Conversional, String and Aggregate with advancedconditions and multiple operators

1KEY Agile QUERY EXPERT

This module has a dynamic query engine with expressionbuilders and model creators. It provides the facility of usinga simple graphical interface to build SQL statements andcreate views in a database.

The module has graphical panes that display the SQLstatements visually and a text pane that displays the text ofthe SQL statements. One can work in either the graphical orthe text panes.

17

SOLUTION SPOTLIGHT

CIOs are able to deploy anenterprise-wide, secure

dynamic reporting platform

in as less as 6 weeks

irrespective of the database

setup of the existing core

application.


18/20

18

SOLUTION SPOTLIGHT

1KEY Agile SCHEDULER

1KEY Agile SCHEDULER enables users to schedule their reports as per therecurrence pattern in a variety of formats like PDF, TXT, XLS, HTML, MHTand RTF to be stored on a hard disk or emailed to respective business users, orto Share Point. This module automates the complete process of reporting andavoids the cumbersome work of manually creating and delivering reports torespective business users on a periodic basis.

1KEY Agile FILE READER

1KEY Agile FILE READER is a utility that imports data from Text Files,Excel Files and stores it into 1KEY Agile CUBE or 1KEY Agile VIEW fordirect reporting and analytics.

The advantages of this module include: Users can choose single and multiple files and sheets at one instance.

Users can select data range on their own. Users can select data columns in the required format for analysis. Users can save layouts and use the same whenever required.

1KEY Agile CONSOLE

1KEY Agile CONSOLE is a powerful enterprise administrative security systemfor managing the application with user rights, authentication, log writing, back-ups and permissions. It has modules like My Desk, All Managers, User Rolesand Report Rights, SMTP settings, Control centre.

This module has active directory integration for single sign-on. It also has

service oriented architecture with web services and offers integration with thirdparty services. It connects to multiple servers through OLEDB, ODBC, MAIAOLAP, SSAS, SAP and XML.

1KEY Agile User Hierarchy, Role Based Security

1KEY Agile User Hierarchy, Role Based Security is provided in 1KEY Agile.The access control over complete business information is well mapped as perthe employee hierarchy of the organisation. The information displayed as a partof reports is trimmed as per the user logged into the system. 1KEY Agileprovides full end-to-end control of sharing and display of businessinformation.

Parametric Control: 1KEY Agile uses "parametric control" for controllingaccess to business information which is available to users for their reportingneeds. Parameters are mapped to the user hierarchy of the organisation andthis governs the access to the relevant data.

Parameter Mapping: The parameters defined in the system are mapped toeach field based on the User Hierarchy maintained in the organisation.

Access Control for Business Information: Information displayed will bebased on the parameter considered and mapped to the Role based - UserHierarchy of the organisation.

With 1KEY Agile BI Suite's client as well as web interface, CIOs are able todeploy an enterprise-wide, secure dynamic reporting platform in less than 6

weeks. Irrespective of the database setup of the existing core application, thesolution can assist organisations in creating a single reporting structure in aheterogeneous database environment. Large enterprises are already reaping thebusiness benefits from 1KEY Agile deployment.

The solution has acomprehensive data

analysis, data mining,

and multi-

dimensional visual

reporting solution. It

is a powerful tool

conceived to help

business users

understand their data,

compare and contrast

scenarios, and deliver

this information

inside and outside of

their organisation.


19/20

www.agile-ft.com

Views expressed in this publication do not necessarily represent the views of Agile FT and the information contained herein is only a brief synopsis of the issues discussed herein. Agile FT makes

no representation as regards the accuracy and completeness of the information contained herein and the same should not be construed as legal, business or technology advice. Agile FT, the authors and

publishers, shall not be responsible for any loss or damage caused to any person on account of errors or omissions.

Agile Financial Technologies

808-A, Business Central Towers

TECOM, Dubai Internet City

P.O. Box 503007

Dubai

United Arab Emirates

Tel: +971-4-4331825

Fax: +971-4-435-5709

Agile Financial Technologies Pvt Ltd

701-A, Prism Towers

Mindspace, Malad (West)

Mumbai 400064

India

Tel : +91-22-42501200

Fax: +91-22-42501234

Agile Financial Technologies Pte Ltd

20 Cecil Street, #14-01

Equity Plaza

Singapore 049705

Tel: +65-64388887

Fax: +65-64382436


20/20

Date post:	30-May-2018
Category:	Documents
Upload:	agile-financial-technologies
View:	217 times
Download:	0 times

Agile Financial Times October 2009 Edition

Documents