Management Information Systems in the Banking Sector


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a look at the Management Information Systems (MISs) used in the Banking Sector.

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  • Management Information Systems in the Banking Sector

    1. 1. 1 Presented By:- FARHAN TARIQ (322) ISHAN PAREKH (315) CHITTESH KHILNANI(310) CHIRAG CHAUHAN (303)
    2. 2. CONTENTS  Sales & Marketing -Case Study on Axis Bank  Finance & Accounting -Case Study on SBI  Human Resources -Case Study on SBI & ICICI Bank  Customer Relationship Management -Case Study on ICICI Bank 2
    4. 4. INTRODUCTION  Axis Bank (Formerly known as UTI) was one of the few private banks to have began operations in 1994  The Bank was promoted jointly by the Administrator of the specified undertaking of the Unit Trust of India (UTI)  Life Insurance Corporation of India (LIC).  General Insurance Corporation Ltd (GIC).  National Insurance Company Ltd.  The New India Assurance Company.  The Oriental Insurance Corporation.  United Insurance Company Ltd.
    5. 5.  Incorporated as UTI Bank, headquartered in Mumbai  Registered office at Ahmedabad  Mumbai, Jul 30 2007 : UTI Bank rechristened itself as Axis Bank.  The Bank has a network of more than 896 branches and Extension Counters  One of the largest ATM networks in the country with over 4055 ATMs
    6. 6. INFORMATION SYSTEM • Implemented a new derivatives system-- Summit FT with the help of global financial applications provider – Misys. • Provides ability to structure derivative products in real time and give a single view of the entire transaction to the customer • The bank hopes to leverage the ability to rationalize its currently dispersed functions to provide a single view of every transaction to customers.
    7. 7. CONTD…..  Apart from creating a new derivatives product, it also helps from a regulatory compliance standpoint.  RBI favors transparent online systems that can track every transaction and report it exactly as it is.  An automated system removes this anomaly and improve compliance to a great extent.
    8. 8. SUNTEC’S TOOL FOR AXIS BANK  AXIS Bank Chose SunTec Business Solutions software to centralize and streamline the bank’s pricing and billing processes.  Implemented a solution that helps Axis Bank create personalized product packages and manage fee billing for payment and cash management, while having a unified view of its customers.  Axis Bank is SunTec’s second banking services client in India, after ICICI Bank.
    9. 9. SOFTWARE RESOURCES RisKompass: • Pyxis systems has provided AXIS bank its RisKompass as the software solution for financial derivatives risk management. • It enables clients to manage derivative trades in a further controlled way from the front to back office. • Automated system that can be accessed by anyone on the different locations of the bank. • Smoother deal processing, with verifying and online risk monitoring mechanism. • The system is user friendly, and the software offers good portfolio management features.
    10. 10. OTHER SOFTWARES  Atom Technologies, A Subsidiary Of The Bse-listed Financial Technologies (India) Ltd (FTIL), Which Runs The Multi Commodity Exchange Of India Has Innovated A Technology, Which Enables Mobile Payments.  Electronic Clearing Service (ECS Credit) .  Real Time Gross Settlement (RTGS).
    11. 11. ORGANISATION TRANSACTION PROCESSING SYSTEM: EBS (E-Billing Solutions): • It is the Merchant Account providing company partnered with Axis Bank. • Visualizes you how to become more competitive and help you to make the changes to your online payment processing for risk free business. • EBS "Payment Gateway" is specifically designed to accommodate the increasing demand by e-commerce companies for sophisticated payment solutions to tap the enormous opportunities for global Internet transactions.
    12. 12. HOW IT WORKS?
    13. 13. INFORMATION TECHNOLOGY:  Played a vital role in growth of organization  To retain a competitive edge, the Bank's technology infrastructure is continuously upgraded  Use of technology-  first among Indian banks in submitting centralised Return for foreign exchange transactions  first bank in the India to market EMV chip embedded Debit Platinum, Travel Currency and Credit Platinum cards
    14. 14. BENEFITS OF USING TECHNOLOGICAL ADVANCEMENTS  Extensive Network .  Centralized Service Desk.  Comprehensive MIS .  Mobile Alert Service.
    15. 15. FINANCIAL & ACCOUNTING INFORMATION SYSTEMS with a study on the information systems used in State Bank of India (SBI)
    16. 16. ACCOUNTING  It is the principal way of organizing and reporting financial information. It has been called the “language of business.”  To that end, an accounting system is used to identify, analyze, measure, record, summarize, and communicate relevant economic information to interested parties.
    17. 17. INFORMATION SYSTEMS  An Information system is a framework in which data is collected, processed, controlled and managed through stages in order to provide information to users.  It evolves over time and becomes more formalized as a firm grows and becomes more complex. It can be a manual or computerized system.  Firms depend on information systems in order to survive and stay competitive.
    18. 18. F & A INFORMATION SYSTEMS  An Accounting Information System is a unified structure that employs physical resources and components to transform economic data into accounting information for external and internal users. Resources Required:  Processor(s): Manual or Computerized  Data Base(s): Data Repositories  Procedures: Manual or Computerized  Input/Output Devices  Miscellaneous Resources
    19. 19. MODULES Systems are almost always composed of smaller subsystems, each performing a specific function supportive of the larger system. Modules:  Core Banking  Trade Finance  Capital Markets & Treasury Collateral  Forex  General Ledger Accounting
    20. 20. CORE BANKING  Accounts  Loans & Mortgages  Transactional Services  Single Comprehensive View  Real Time Integration of all Offices  Multi-Access Software Used: TCS (FNS) B@NCS: 2000 Vendor: Tata Consultancy Services (TCS)
    21. 21. TCS – B@NCS 2000 ARCHITECTURE  Based on Service Oriented Architecture (SOA)  Effortless Integration of other modules.
    22. 22. TRADE FINANCE  Data verification  Transaction status control  Calculation of fees, foreign exchange equivalents & liabilities  Production of various documents  Miscellaneous activities Software Used: Eximbills Enterprise Vendor: China Systems Corporation
    23. 23. EXIMBILLS ENTERPRISE ARCHITECTURE  Based on J2EE technology  Hardware independent & browser based  Supports a variety of 3rd-party RDBMS
    24. 24. CAPITAL MARKETS & TREASURY COLLATERAL  Consists of two major sub-modules:  Capital markets  Treasury Collateral Software Used: MX – 3 Vendor: Murex SAS
    25. 25. MX – 3 FUNCTIONS
    26. 26. MX – 3 ARCHITECTURE  Based on integrated platforms technology  Access through various clients based on APIs based on XMLs  Expanded capability using Dot Three Extension Framework
    27. 27. FOREX  Work-flow management solutions relating to currency & derivatives operations  All operations in real time  Capabilities to handle all forex products Software Used: Mercury – FX Vendor: Credence Analytics India Pvt. Ltd.
    28. 28. MERCURY – FX ARCHITECTURE  Browser based solution  Hardware independent  Adaptable & Compatible to help keep pace with business growth
    29. 29. GENERAL LEDGER ACCOUNTING  Acts as “facilitation”  Recording, analyzing & summarizing financial data  Monitoring of company’s financial health Software Used: FinnOne – GL Vendor: Nucleus Software Exports Ltd.
    30. 30. FINNONE – GL ARCHITECTURE  Uses Object Management Group (OMG) technology  Model Driven Archicture  Core processes & functions carried out by specifically constructed & programmed programs  Extensive compatibility with various modular applications
    31. 31. BENEFITS FOR SBI  Major customer satisfaction  Improved product offering  Growth in business per employee by over 250% in the last 5 years
    32. 32. CONS – F & A INFORMATION SYSTEMS  Lack of traditional forensic evidence  Imperative to involve accounting professionals  Adherence to high quality standards
    33. 33. HUMAN RESOURSES 33
    34. 34. WHAT IS HUMAN RESOURCE MANAGEMENT SYSTEM? The systems and processes involving Human Resource Management and Information technology comprise the Human Resource Management System (HRMS). 34
    35. 35. EVOLUTION OF INFORMATION SYSTEMS  Transaction Processing (e.g. payroll)  Management Information Systems (e.g. daily & monthly absenteeism summary)  Decision Support Systems (e.g. How many employees should we hire?) 35
    36. 36. HRMS TRACKS... People PositionsJobs Workers Compensation HR Planning Medical Records Recruit/ Selection Employment Equity Benefits Payroll Pension Admin Employee RelationsTraining and Development Compensatio n Health & Safety 36
    37. 37. KEY ACTIVITIES OF HRMS  Human Resource Planning  Human Resource Policies  Salary and Benefit Administration  Recruitment, Selection and Orientation  Performance Management  Training and Staff Development  Communications and Counselling 37
    38. 38. Processing (Calc. Net pay) AN HRMS EXAMPLE Output (cut paycheck) Input (hours worked) Feedback Loop (Is paycheck accurate?) 38
    39. 39. 39
    40. 40. MAKE VS. BUY? Packaged Systems Custom Systems Advantages Disadvantages - Cheaper, cost spread across many buyers - Quicker development; - Can easily evaluate to determine if needs met - Supported - Unlikely to meet all of organization’s requirements - Low distinctiveness - Many vendors/products to sort through - Lack of control in any updates/changes - Greater control; quickly adapt to changes - Unique needs addressed - Distinctiveness High - High Maintenance “burning platform” - Long development timeline - Poorly documented/Brain drain - Greater Staffing Reqs. (IS personnel) 40
    41. 41. STATE BANK OF INDIA - HRMS Company Scenario Before Deployment o Manual systems to manage around 3.7 lakh employees in 15000 branches across 32 countries. After Deployment o SBI is among the top hundred banks globally and is the only Indian Bank in the Top 100. o The Bank is in 200th Year of business and has made profit for all the years. o State Bank of India and its seven Associate Banks have already developed group synergy in areas like Real Time On-line Banking, ATM, Treasury and other IT areas. The proposed HRMS Solution would further integrate the Human Resources operations across the group uniformly. Implementation partner o SAP™ ERP 41
    42. 42. ICICI BANK - HRMS Company Scenario Before Deployment  Various manual and partly automated systems for managing the HR lifecycle After Deployment  Automated the complete HR life cycle of 36000 employees in one system which is 24x7 and has an uptime of almost 100%. .  Provision for handling the expected 2.7 lakh resumes in the next financial year. Implementation partner  PeopleSoft-Oracle 42
    43. 43. HRMS BENEFITS REALIZED (VERSUS MANUAL SYSTEM)  Saves money.  More efficient recruiting.  Better coordination of staffing resources.  Faster, more consistent screening of applicants.  Quicker, higher quality hiring decisions. 43
    44. 44. Perhaps the best Return On Investment an organization will realize is the investment in their staff. A final word… 44
    45. 45. 45
    46. 46.  Customer relationship management (CRM) is a business strategy to acquire and manage the most valuable customer relationships.  CRM requires a customer-centric business philosophy and culture to support effective marketing, sales and service processes.  CRM applications can enable effective customer relationship management, provided that an enterprise has the right leadership, strategy and culture. Customer complaints are the schoolbooks from which we learn.
    47. 47. 47 This diagram shows how the implementation of CRM enables customers to be connected to front and back office and possible third parties.
    48. 48.  CRM helps businesses use technology & HR gain insight into the behaviour of customers & the value them.  Provides better customer service, make call centers more efficient, cross sell products more effectively, help sales staff close deals faster, simplify marketing and sales processes, discover new customers, and increase customer revenues.  Banks must look into all of the different ways information about customers comes into a business, where and how this data is stored and how it is currently used. 48
    49. 49. 49
    50. 50.  Provide product information, product use information, and technical assistance on websites that are accessible 24 hours a day, 7 days a week.  Identify how each individual customer defines quality, and then design a service strategy for each customer based on these individual requirements and expectations.  Use internet cookies to track customer interests and personalize product offerings accordingly.  Provide a fast mechanism for managing and scheduling maintenance, repair, and ongoing support (improve efficiency and effectiveness). 50 Be everywhere, do everything, and never fail to astonish the customer.
    51. 51. 51 Flow of Information in an Organization is shown in this diagram.
    52. 52. 52
    53. 53. 53  Established in 1994, ICICI Bank is today the second largest bank in India and among the top 150 in the world.  It currently has assets of over US$ 79 billion and a market capitalization of US$ 9 billion and services over 14 million customers through a network of about 950 branches, 3300 ATM's and a 3200 seat call center (as of 2007).  ICICI Bank adds 300,000 customers a month, which is among the highest in the world.  The hallmark of this exponential growth is ICICI Bank’s unwavering focus on technology. Customer service is awareness of needs, problems, fears and aspirations.
    54. 54. 54 FCRM- Finacle Customer Relationship Management  The software used by ICICI Bank is FCRM i.e. Finacle Customer Relationship Management which is a part of the Finacle suite of products from Infosys.  It is a tool to enable Customer Relationship Management.  The name is derived from Finacle Core Banking that is used as the main product processor for liability products and banking transactions.  Finacle CRM aggregates customer information from all our major products - Liability products/ Deposits, Credit Cards, Loans and others.
    55. 55. Common sense if of paramount importance in business and customer service. 55
    56. 56. 56
    57. 57. 57
    58. 58. As the financial market system is questioned and people are seeking for alternative way of doing business, FCRM has been effective to the ICICI Bank in the following way: Communicating with the customers. Checking unusual movements on the account. Providing tremendous opportunities to their clients. Managing customer's questions flow. Secure the banks business models . 58 Customers are an investment. Maximize your return.
    59. 59. 59 Personalized Sales Home Page Activity Management Operational Inefficiency Removal Enhanced Productivity Good leaders must first become good servants.
    60. 60.  Underwent a phase of organic and inorganic growth.  Number of transaction boosted from 400,000 transactions a day, in 2000 to nearly 2.1 million, by 2005.  Associated growth rate increased 5.5 times.  Process 0.27 million cheques, per day.  Number of concurrent users managed are 7000.  Moved over 70% of routine banking transaction from branches to other delivery channels. 60 Do what you do so well that they will want to see it again and bring their friends.
    61. 61.  Increases customer acquisition.  Decreases cost and internal issues.  Increases revenue and hence profitability.  Increases effectiveness.  Increases morale of the employees.  Increases creativity and hence makes a path for innovation.  Increases customer satisfaction.  Decreases errors and time loss.  Decreases customer’s complaints.  Increases customer loyalty. 61 Customers don’t expect you to be perfect. They do expect you to fix things when they go wrong.
    62. 62.  Banks that are not improving their relationships with customers are gambling with the future of their businesses.  Focus on adding value to customers, not efficiency or control-oriented imitations.  If it weren’t for the Internet, there wouldn’t be CRM as we know it today. There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else. 62
    63. 63. 63