Agility in the context of banking doesn’t mean just speed in execution; it also means that the bank is nimble and flexible. Agility helps the bank to win a marathon, as opposed to a hundred meter dash.
Agile Banking – Managing the Challenge of ChangeUniversal Banking Solution System Integration Consulting Business Process Outsourcing
Business Agility tap new and emerging platforms and channels like Social Media, which can be used to crowdBusiness agility is the ability of a business to source the development of products that canadapt rapidly and cost efficiently in response to cater to the needs of a particular segment.changes in the business environment. Businessagility can be attained by maintaining and Time Agility defines the speed with which a bankadapting goods and services to meet customer can roll out new products and services to takedemands, adjusting to the changes in a care of the varying needs of customers. For abusiness environment and taking advantage of bank to be time agile, the processes and systemshuman resources. that underlie operations should be capable of handling the frequent changes in the bank’sAgility in Banking offerings. The use of state-of-the-art banking solutions will enable the bank to turn aroundAgility in the context of banking doesn’t mean newer products quickly and manage diversejust speed in execution; it also means that the products and services as time progresses.bank is nimble and flexible. Agility helps thebank to win a marathon, as opposed to a Challenge of Changehundred meter dash. Hence, an agile bank is one that is on the moveA bank, which is agile, will be able to roll out and constantly undergoing change. An agilenew products at a much more rapid pace to bank will also have a large number of alliancesmeet the target of treating each customer as a with partners who contribute to various parts ofsegment of one. This rapid product development the product and service offering. The way theand rollout can be managed only if the bank is change is managed will determine whetherbacked by a clear process strategy to handle the bank succeeds at increasing customerproduct complexity and accompanying growth. satisfaction and profitability or ends up with aThis combination of product and process in large number of offerings that add to the chaos,an agile bank is expected to increase the but not to customer satisfaction.quality of customer experience, which can bebenchmarked using a metric of growth combined Some of the key steps on the journey towardswith stickiness. By growth, we mean that a agility, which will help in managing the challengebank is able to attract new customers as well of change, are as follows:as more business from existing customers. Identify the Change DriverHigh stickiness means low customer attrition. The need for agility in a bank can arise from aHence, agility helps a bank to streamline its change driver. This change driver can be internalprocess such that it can roll out newer products or external. External change drivers arise fromat a rapid pace to increase the quality of factors over which the bank has almost nocustomer experience, and thereby retain existing control, like a reduction in margin because of acustomers and attract new ones. hike in interest rates, or an increased regulatoryTypes of Agility compliance burden on account of heightened Central Bank norms. Internal change driversAgility can be classified in two ways. A bank can can arise from factors such as merger andbe either Range Agile or Time Agile. acquisition or a reduction in workforce. The driver of agility needs to be identified andRange Agility defines the ability of the bank to communicated clearly within the bank and tobroaden or shrink specific aspects of its all its stakeholders.capabilities. This also implies that the bank isable to increase or decrease the portfolio of Identify the Agility Enablersits products and services. This can happen bysimultaneously expanding or shrinking the After identifying the change drivers, the bankbank’s processes and the capabilities of its needs to identify the agility enablers againstpeople. A range agile bank will also be able to each. The current and target states need to be Agile Banking – Managing the Challenge of Change
identified for each of these drivers as well as Effective Decision Makingthe enablers that will take the bank to itstarget. For instance, the loss of customers due An agile bank, working in a dynamic businessto the unavailability of mobile banking, can be environment, needs to respond to change toa change driver. The agility enabler in this case tap growth opportunities. The effectiveness ofcould be the adoption of a new technology decision-making will determine the quality ofsolution for Mobile Banking. Another driver the response. The performance metrics and datacould be the need to reduce the waiting time relevant to the bank need to be extracted andat the teller window. The agility enabler in this presented within the shortest possible lead timecase could be service automation through an for agile decision making. The best-in-classATM or kiosk, supported by IT infrastructure at IT solutions for banks come with their ownthe backend. analytics solutions, capable of generating the data required for analysis, at a click. If thereStrategy Formulation and People Management are multiple enterprise systems and multiple subsidiaries operating within the bank, it is worthThe top management of the bank needs to exploring an Enterprise Decision Dashboardidentify the strategy for each of these enablers (EDD). An EDD will have the data extractionand communicate the same to the unit or and presentation capabilities to take the outputdepartment concerned. In each unit, a core team from multiple systems and present it to themust be formed to manage the transition, as decision makers.well as communicate with the people within.More often, the strategy formulated by the bank Review and Monitoringmust encompass the change in its technology A steering committee consisting of the CXOs oflandscape. The bank might replace the legacy the bank needs to be formed, and chargedsystems with the latest Banking system to cover with conducting periodic review and directingits end to end operations. This might necessitate course correction if required, in the journeydeveloping the skills of the bank’s employees. towards agility. Under the steering committee, aHence, every strategy formulated to reach the core team comprising members from eachtarget state of an agility enabler must consider concerned SBU or department must be formedthe people dimension, especially from the that will drive and monitor the progress made instandpoint of minimizing chaos. their respective departments.Effective Business Process Management ConclusionThe business processes needs to be clearly The journey towards making a bank agiledocumented; in the case of an agile bank, involves changes, which affect its people,Business Process Management (BPM) needs processes and products. This is accompaniedto be constantly updated, preferably by the by a change in its technology landscape topeople who carry out the business processes. facilitate rapid innovation and transformation.The business rules, constraints, processes and These changes needs to be carefully calibratedpolicies need to be documented as part of BPM. and managed so that the bank’s existingThe generation of business process maps is not customers do not feel any adverse impact anda one-time activity and will constantly undergo the bank also attains a larger market sharechange as the bank changes its products and and higher customer satisfaction at the end ofprocesses to become more range agile. Hence, the journey.it is prudent to identify the owners for eachbusiness process, who will be responsible for Referenceskeeping the process documentation up to 1. ‘Agile Banking: Leverage the Integrateddate. An enterprise BPM solution will help the Banking Platform’, Rajashekara V. Maiyabank in managing business processes andalso making them accessible to all their 2. ‘IT agility: striking the right balance’, Kishorerespective stakeholders. Sengupta and Andrea Masini Agile Banking – Managing the Challenge of Change
3. ‘Strategic Agility Planning for Banks’, Prashant 6. ‘Benchmarks of agility at banks’, Rajashekara Gupta and Prashant Tewari V. Maiya4. ‘Towards Enterprise Agility through Effective Decision Making’ by Sriram Anand and Author Jai Ganesh Kartik Ramadas5. ‘Business Process Management: Facilitating Consultant - Finacle Enterprise Agility’ by Akash Saurav Das, Infosys Limited Sandeep Gaikwad and Vivek Raut Agile Banking – Managing the Challenge of Change