Digitalization: A Challenge and An Opportunity for Banks
Report
Jérôme KehrliFollow
Feb. 28, 2017•0 likes•5,589 views
Digitalization: A Challenge and An Opportunity for Banks
Feb. 28, 2017•0 likes•5,589 views
Report
Internet
Today’s banking industry era is strongly defined by a word - digital. The urgency to act is only getting severe each day. Banks using digital technologies to automate processes, improve regulatory compliance, and transform the customer experience may realize a profit upside of 40% or more, while laggards that resist digital innovation will be punished by customers, financial markets, regulators, and may see up to 35% of net profit eroded, according to a McKinsey analysis. The vital question to answer is, do we get digitalization right? Why is it getting extremely urgent to digitize?
Jérôme KehrliFollow
More Related Content
What's hot
E governanceAbhishek Sheth
Internet Bankingsnehateddy
e-commerce and internet bankingArushi Grover
E-commerce project in brief pdfkapil sharma
Internet bankingNAMITHA SUDHAKAR
Digital payment systemBharatHajare1
Viewers also liked
5 Step Guide to DigitalizationMiikka Leinonen
DigitalizationCyril Danthi
Digitalization. A perspective.Roope Ruotsalainen
Digitalization - How to build a killer ecosystem by aligning customer experie...Milos Radovic
The Process of Digitalization - A How-To GuideSuperior Consulting Services Luettgen
DevOps explainedJérôme Kehrli
Similar to Digitalization: A Challenge and An Opportunity for Banks
Transformando la vida cotidiana a través de Big DataUX Nights
Gartner: Top 10 Technology Trends 2015Den Reymer
Digital Transformation Major tech trends through the customer lens and relati...Larry Smith
CPCU 2016 future of underwriting insurtechintellectseec
Identifying the new frontier of big data as an enabler for T&T industries: Re...International Federation for Information Technologies in Travel and Tourism (IFITT)
Bigger and Better: Employing a Holistic Strategy for Big Data toward a Strong...IT Network marcus evans
More from Jérôme Kehrli
Introduction to Operating SystemsJérôme Kehrli
Introduction to Modern Software ArchitectureJérôme Kehrli
A proposed framework for Agile Roadmap Design and MaintenanceJérôme Kehrli
The search for Product-Market FitJérôme Kehrli
Big data in Private BankingJérôme Kehrli
From Product Vision to Story Map - Lean / Agile Product shapingJérôme Kehrli
Recently uploaded
IT-Security-20210426203847.pptIan Dave Balatbat
OpenID 4 Verifiable Credentials + HAIP (Update)Torsten Lodderstedt
Serverless and event-driven in a world of IoTJimmy Dahlqvist
Microsoft Blockchain Case Studies.pptxJoelJohn481077
![[FediForum] Reisman FairPay - Rethinking Revenue.pdf](https://cdn.slidesharecdn.com/ss_thumbnails/fediforumreismanfairpay-rethinkingrevenue-230921142132-d55847d0-thumbnail.jpg?width=384&height=256&fit=bounds)
[FediForum] Reisman FairPay - Rethinking Revenue.pdfTeleshuttle Corporation
wikipedia.docxrajsharma175677
![[FediForum] Reisman FairPay - Rethinking Revenue.pdf](https://cdn.slidesharecdn.com/ss_thumbnails/fediforumreismanfairpay-rethinkingrevenue-230921142132-d55847d0-thumbnail.jpg?width=1600&height=908&fit=bounds)
Digitalization: A Challenge and An Opportunity for Banks
- 1. Digitalization A challenge and an opportunity for Banking Institutions February, 28th 2017
- 2. Presenter Jérôme Kehrli Head of R&D, NetGuardians @jeromekehrli
- 3. Summary • Introduction What is the digitalization ? • Financial Services are impacted • Some definitions … • Challenges and opportunities for banking institutions • NetGuardians
- 4. Introduction What is the digitalization anyway ?
- 5. 2007 2017
- 6. Facts In 2020, Global Mobile Traffic will exceed fix PCs Internet Traffic. Global Internet Traffic flows ratio Today, 3 billion people are inter- connected, all the time, everywhere.
- 7. More facts (Source : Nielsen - http://www.nielsen.com/us/en/insights/news/2011/40-of-tablet-and- smartphone-owners-use-them-while-watching-tv.html) 40% of tablet and smartphones owner use them while watching TV
- 8. We are inter-connected on different kind of medias during a continuous time for every possible need Today
- 9. Tomorrow
- 10. All these sources generate data … a lot of data ! 5 exabytes of data (5 billions of gigabytes) Were generated since the first measurements until 2003, In 2011, this quantity was generated in 2 days In 2014, this quantity is generated in 10 minutes Source: IDC’ Digital Universe Study, sponsored by EMC, December 2012 « Data is the new Black Gold » Clive Humby
- 11. The digitalization urges corporations to • search for new business models and • rethink their operating model
- 12. Financial Services ARE impacted ! and heavily
- 16. The digitalization • shakes the fundamentals of our society, • shocks our references and • revolutionizes our business models
- 18. A first definition « The digitalization is the integration of digital technologies into everyday life by the digitization of everything that can be digitized.» (Source : BusinessDictionary - http://www.businessdictionary.com/definition/digitalization.html )
- 19. A definition « The digitalization is the impact on corporations and organizations of the fact that people and things are always and everywhere inter-connected for every possible need. » (Source : OCTO Technology - http://blog.octo.com/digitalisation-une-definition/ )
- 20. Digital Transformation Evolution of means • Internet of everything • Consumerization • Mobile usage developments • Power of crowd • Availability/volume of data Evolution of behaviours • Digital literals / Milenials • Immediacy • Infectiousness • Individualization • Multiplication of behaviours Organization / Processes • Agile Corporation • Devops • Management 3.0 • Flat organization • Customer Centricity Corporate Culture • Lean Startup • Customer Development • Autonomous teams • Operational Efficiency Marketing approach • Digital Marketing • In- / Out- bound marketing • Mass customization / implication • Profiling / Behaviour prediction • Co-creation / Co-innovation influence / force transform Technology • Mobility • Open Source Software • Open Data • Open API • Big Data • NoSQL / NewSQL • Cloud • Multi-Data Centers clusters • Internet of things • Web 3.0 Fiber last mile • 5G / SUPERFLUIDITY • Social Networks • Mobile walets • Blockchain • New Human-Machine Interfaces Induces Enables
- 21. Challenges and opportunities for banking institutions
- 22. Challenges Competitiveness • Fair price • Clarity • Simplicity • Tailor-fit / custom Marketing and Branding • Reputation (seriousness and trust) • Innovation Risk Management / Mitigation • Reduce intervention delays • Continuous monitoring • Fraud detection • Smarter / Deeper / Faster controls Operational Efficiency • Process automation • Process efficiency • Reduce intervention delays Customer centricity • Make customer autonomous • Inspire needs • Listen to demands • Meet the customer Customer Satisfaction • Availability (24/7) • Walk the talk • Give visibility Challenges
- 23. Benefits Competitiveness • Simple products • Customizable products • Co-creation • Co-innovation Marketing and Branding • Digital Marketing • Sandboxes • Convergence of networks (enterprise and private) Risk Management / Mitigation • KPIs / KRIs follow up, dashboards • Data Analytics (Big Data, AI) • Fraud prevention • Real time Operational Efficiency • Process dematerialization • Paperless corporation • Digital signatures Customer Centricity • Adapt to customer channels • In- & Out-bound marketing • Finer segmentation Customer satisfaction • 24/7 Support availability • Customer Follow-up processes automation • Open price / product comparison Opportunities
- 25. NetGuardians, where do we kick in ? Risk Management / Mitigation • KPIs / KRIs follow up, dashboards • Data Analytics (Big Data, AI) • Fraud prevention • Near Real time Risk Management / Mitigation • Reduce intervention delays • Continuous monitoring • Fraud detection • Smarter / Deeper / Faster controls Challenges Opportunities We address We provide NG|DCFBank IS NG|Screener Daemon NG|Screener UI / NG|CaseManager NG|Screener Analytics Platform
- 26. The NG|Screener Analytics Platform Behaviour Analysis Profiling Predictive Analytics Prevention NG|Screener Daemon Dashboard Investigate Notification NG|Screener UI Workflow Document Prosecute Notification NG|CaseManager Business Data Users and Customers Activity Sys. Admins Activity DBA Activity NG|DCF NG|DCFBank IS NG|Screener Daemon NG|Screener UI / NG|CaseManager NG|Screener Analytics Platform
- 27. With the digitalization, new opportunities for growth and innovation are emerging. New regulations, and moreover changes in regulations to address these challenges will increasingly appear at an unprecedented pace. Focus on identifying your risk needs and key controls, and let us take care of the Technology.
- 28. At NetGuardians, we: • Implement your risk and fraud detection controls • efficiently and • online / near real-time • Keep you up to date with regulations • Address the increasing complexity of regulatory compliance • Benefit from cour experts • Digitalize your risk and control processes • Move towards automated, integrated, comprehensive and continuous control and audit • Leverage our Big-Data Analytics Platform for all your risk use cases Attend to our next webinar to find out how : «Compliance of the Future: Control Digitalization, 15 March 2017»
- 29. Thank you! @jeromekehrli kehrli@netguardians.ch NetGuardians SA Headquarters Rue Galilée 6 1400 Yverdon-les-Bains Switzerland Tel: +41 24 425 97 60 Email: info@netguardians.ch www.netguardians.ch Linkedin.com/company/netguardians Facebook.com/NetGuardians @netguardians
Editor's Notes
- Jerome Kehrli Head of R&D at NetGuardians for almost 2 years 15 years of experience in software Development for the Financial Industry Passionate about innovative technologies and Big Data concerns and technologies specifically. I animate the NetGuardians community and Fintech Blog
- Our society is evolving, Yesterday – in 2008, we were amazed by the first smartphones. Today they have almost become a part of ourselves. We cannot go without them anymore. Today everybody has in his pocket a computer that is more powerful by several order of magnitudes that the computer that sent people to the moon Later, 30 years ago, we had computers still way less powerful than an iphone that were fitting an entire room, Today an Iphone stands in our pocket Is it the biggest invention of the decade ? Likely, but the previous decade, not the current one. I’ll get back to that. Nowadays, new technologies emerge first in the consummer market and then spread into business. New solutions emerge every month and corporations cannot keep up the pace. This new reality has a name : it’s the consumerization. The consumerization has a consequence. Increasingly, the trend is to hire employees with their devices and applications. This is the BYOD for “Bring Your Own Device” trend. It comes from the fact that employees are more comfortable and more efficient with their own devices. The direct consequence of the consumerization is a use of a mix of professional and personnal tools by employees (Office Suite, Gmail, Google+, Twitter, Facebook, Dropbox, evernote, ...) Nowadays many companies are still blocking acccess to these personnal tools from their employees, mostly financial institutions I have to say. Tomorrow, that won’t be possible anymore. People are used to be connected all the time, with highly efficient devices on highly responsive services, everywhere and for every possible need.
- Some facts. Global sales of PCs never really exploded. On the other hand, Global sales of smartphones and tablettes explodes. Global Mobile traffic went from 1% in 2009 to 4% in 2010 and 12% in 2012. Today it reaches 40%. In 2020, Global Mobile Traffic will exceed fix PCs Internet Traffic. For instance in India, the wired telecommunication infrastructure could never be developed as it could be in Europe or in the US. There, the mobile traffic already exceeded the Desktop traffic in 2012. In 2017, over 3 billion people will be connected all the time, everywhere and for every kind of needs. Global sales of smartphones and tablets has exploded !
- More facts We look at our smartphones 150 times a day We are using our smartphones all the time, even when watching another media. Even when watching TV, we cannot refrain from using a connected device at the same time, either a smartphone or a tablet. As a funny note, men and women are using their smartphones or tablet at this time for significantly similar reasons. There are 2 exceptions: Looking at sport results on an ipad while watching TV seems to be rather a man thing. While looking at facebook feeds while watching TV seems to be rather a woman thing.
- I cannot stress enough how much this is important and what it means in terms of change of society. Today, we are inter-connected on different kind of medias, during a continuous time and for every possible need. This has become a part of the human behaviour. In a few years (Ok maybe a little more) the majority of the workforce will be composed by millenials, by people almost born with an iphone. But this is today …
- Tomorrow there will be dozens of billions of additional sources, in the form of smart devices connected on internet and exchanging data. The Internet of Things - or IoT - refers to uniquely identifiable objects and their interconnection on internet, as well as their automatic exchange of information with third party services. Dr. Henrik Christensen, Professor of Computer Science and the Chair of Robotics at the Georgia Institute of Technology, said, not long ago : “My current prediction is that kids born today will never have to drive a car” There are 3 billion people connected in 2017 and exchanging data on Internet. Gartner thinks there will be 26 billion devices on the Internet of Things by 2020. ABI Research is even more optimistic and claims that 30 billion devices will be wirelessly connected to the Internet of Things by 2020. The internet of thing is the coming big thing ! The “internet of people” and the “Internet of Things” form the “Internet of Everything”. Cisco defines the Internet of Everything (IoE) as follows “ The Internet of Everything brings together people, process, data, and things to make networked connections more relevant and valuable than ever before-turning information into actions that create new capabilities, richer experiences, and unprecedented economic.” The Internet of Everything is the coming evolution from the interconnection of people and objects, always, all the time, everywhere and for every possible need.
- Since we started estimating and measuring the amount of produced data until 2003, 5 exabytes (5 billions gigabytes) have been produced. In 2011, that quantity was generated in 2 days (think of facebook, twitter, google searches logs, financial transaction logs, etc.) In 2014, this quantity is generated in 10 minutes. Today it is likely generated in a few minutes Not only do we generate more and more data but today we have the means and the technology to analyze, exploit and mine this data to extract meaningful business insights The data generated by the company’s own systems , such as logs, user and customer activity tails, etc. can be a very interesting source of information regarding customer behaviours, profiles, trends, desires, etc. But Big Data, since this is the topic here, becomes really relevant only when one also considers the data external to the corporations, such as facebook status feeds, twitter logs, linkedin news, etc. Today, a whole lot of additional sources are available to corporations to gather business insights related to market trends.
- To summarize. what we are experiencing : the digitalization of the masses the era of power the availability of massive amount of data More importantly, the ability to analyze and use this data The always and everywhere interconnection of people The internet of things The coming internet of everything MUST LEAD CORPORATIONS TO RETHINK THEIR BUSINESS MODEL AND THE WAY THEY WORK The moment is now. Corporations must understand what this means and how this change of behaviour of humanity as a whole will require to adapt their business models to the digital era.
- Now when I run this speech in financial institutions, it happens sometimes that I hear comments such as “Yeah well all of this makes surely a lot of sense for fancy internet companies. But we’re a bank here. We’re doing serious business, we’re not Facebook.” I’m always puzzled by this kind of reactions because in my opinion, serious businesses such as banking institutions are in contrary on the front line when it comes to meeting the digitalization challenges. It’s now wonder fintechs have become such a thing and are increasingly eating the banking business. Think of millennials, think of these people that are almost born with a tablet or a smartphone in their hands. My father, used to go to the banking institutions that was closest from where he lived and where he worked. That’s how he made his choice. I myself, I have chosen my banking institutions at the time I was a student. My choice was driven by the conditions that banks were giving to students, such as a free credit card, no additional costs, etc. Then I simply remain loyal to my first choice. Millenials choice will be different. They will choose the bank that provides them with the best online experience. That will be their main driver. For these people born with twitter, facebook and all these fancy online services, it will simply seem impossible to have to physically go to a branch to perform whatever operation they will need related to their banking account, including its initial opening. Let me give you some examples …
- Wells Fargo announced plans earlier this year to close over 400 branches in the US. The tendency of big financial institutions is to close physical branches at an unprecedented pace, as a reflection of people’s preferences for online and mobile banking. [DOWN] (pause) In online banking there is also a clear tendency from 2012 onwards. Mobile banking usage skyrocks while fixed Internet banking is stagnating or even slightly shrinking. [DOWN] (pause) On one hand, rising compliance costs and restrictive regulations is the new normal. This forces banks to increase operational efficiency at all costs, which is pretty difficult when regulation related costs tend to explode. On the other hand, reduced margins and increased costs is forcing banking institutions to adapt. Growing the Investment management business line is a relevant approach of course but diversifying earnings with new retail banking initiatives aimed at ensuring a first place on the online banking market is mandatory (pause) The digitalization is shaking the fundamentals of the banking business.
- Just as technology as disrupted the transportation business with Uber, the lodging business with AirBnB, the consumer lending business with so many peer-to-peer lending platforms available, Technology is about to disrupt investment banking. This is happening. [DOWNJ (pause) Alternative financing models are progressing throughout the business lines. Peer-2-Peer consummer lending, Crowdunfing, Peer-2-Peer business lending, all of them are exploding over the past years. This chart shows the situation in the UK but the worldwide situation is pretty similar. The important information here is that the volume of peer-to-peer and crowd financing is doubling every year since 2012. [DOWN] (pause) This is the landscape of alternative financing firms and startups. More companies are appearing every month, almost every week. If you look at the global fintech landscape, you can multiply the count of companies here by 20. (pause) Fintechs are eating the banking business. Banking institutions need to adapt, or eventually a lot of them will disappear.
- The blockchain. Back in 2010 nobody ever heard that word. Only very high tech or finance specialists were aware of any crypto-currency. Today everybody knows bitcoin and most people heard about blockchain. [DOWN] (pause) While the blockchain technology is not ready yet to completely replace the trust third party, it has the potential to disrupt the very root of the worldwide financial system. Happily here financial institutions have understood this from the beginning and a lot of blockchain initiatives nowadays are led by big financial institutions. I focused a lot on how the digitalization is challenging the banking business. But the blockchain technolofy is a good example that there are opportunities as well. [DOWN] (pause) A team in the university of California has designed a model aimed at predicting stock prices evolution by using statistics of tweets, sentiment analysis and relationship discovery algorithms. Not only they are able to predict stock prices evolution one day in advance but they came up with a model much more accurate that pretty much every other initiative so far. Technology, here Big Data, also offers unprecedented opportunities for financial institutions. [DOWN] (pause) Another interesting example. Royal Bank of Scotland engaged IBM Watson to take care of the simplest customer request coming from online channels, as a way to enhance operational efficiency. I myself am not necessarily a big fan of IBM or Watson but this is a pretty sound use case for Watson. And in any case it’s a brilliant example of how technology can help banking institutions increase operational efficiency.
- Again, both the evolutions of means and the evolution of behaviours induced by the new technologies such as the digitalization of the masses The Big Data technologies The internet of everything Have strong consequences on corporations and the society in general The digitalization - shakes the fundamentals of our society, - shocks our references and revolutionizes our business models Corporations need to adapt.
- I think you should now understand what I mean with the term “digitalization” so it’s a good time to give a few formal definitions
- (pause) A first definition that I think is good, from Business Dictionary : “The digitalization is the integration of digital technologies into everyday life by the digitization of everything that can be digitized” This is really what is happening. Everything that can be digitized, either is digitized or is getting digitized. I realized recently that I myself haven’t written anything down on paper for a pretty long time. I use Internet to do my payments, book my holidays or business trips, search for a phone number. I take notes on my laptop or my smartphone. I even take my medical appointments using email. The digitalization is the increasing integration of digital technologies into everyday life. Corporations need to adapt their business models and operating model to follow this trend. They need to transform their business and make it suited to the digital era.
- (pause) This is the definition of the digitalization from OCTO Technology. I think it’s brilliant "The digitalization is the impact on corporations and organizations of the fact that people and things are always and everywhere inter-connected for every possible need." I think is brilliant especially in the context of my webinar today. What interests us today is the impact of the digitalization on corporations and in this context the definition from OCTO Technology is crystal clear, accurate and most relevant. Another way to put it would be : The digitalization is the impact on enterprises and organizations of the Internet of Everything.
- One definition remains : what is the digital transformation. I could not find any easy way to present the notion of digital transformation as a one sentence. Instead, I find the following schematic most relevant in presenting what is the digital transformation. This square is a corporation. The blue form represent its organization, its processes and its culture. [DOWN] (pause) The most recent technological evolutions, - The always and everywhere inter-connection of people - The internet of everything - Big Data technologies - etc. Influence the society and causes an evolutions both of means and behaviours. [DOWN] (pause) [DOWN] (pause) In terms of means, think of the always and everywhere interconnection of people ands things, the consummerization, the new businesses such as crowdfunding and crowdsourcing, The availability of massive amount of data and the ability to analyze it, etc. [DOWN] (pause) In terms of behaviour, think of the increasing digital literacy of people, the digital natives, all the behaviour changes brought by social networks and the increasingly connected world and real-time communication means. People want everything, now and tailor made. [DOWN] This evolution of our society as a whole forces the corporation to transform its operating model, adapt its organization and its culture. The 4th industrial revolution [DOWN] [DOWN] Corporations need to adapt three most essential aspects. [DOWN] (pause) [DOWN] (pause) First, the internal organization of corporations need to be adapted to match the responsivness and dynamic required to design products in the digital era. Key practices here are Agility and DevOps at every level in the company around the IT organization designing the digital products. Management and hierarchy should also be adapted to enable low response time to market events and customer feedbacks. Finally, every action and decision within the corporation should be taken with customer centricity in mind. [DOWN] (pause) Entering the digital era requires a significant evolution of the culture of the company. Lean Startup principle and practices should be embraces and a thorough Customer Development Process should accompany the Product development processes in place. Also, in the digital era with reduced margins and increasing complexity of products and regulations, operational efficiency should be a constant focus. [DOWN] (pause) Finally, The marketing approach should evolve to meet the customer expectations in a digital world. Customers expect corporations to meet them where they are, in a mostly online world. Corporations already started the digital marketing move many years ago, but that is not sufficient. TODO In & Out-Bound marketing. In this ever more selfish world, people are looking for tailor-made. It’s all about me, myself and I. Corporations need to consider this and thanks to a sound adoption of Lean Startup principles such multivariate tests, corporations have the possibility to provide customers with very customized solutions. Even further, it is nowadays common to implicate customers in the design of the product itself and even in the process of searching for new products to develop. Think co-creation and co-innovation. [DOWN] Interestingly, just as technology is the driver behind the evolutions forcing corporations to adapt, technology is also the solution to the transformation of corporations. [DOWN] Corporations need to understand that they have no choice. They need to digitalize significant portions of their business and understand the central place that technology has to take. Corporations that still believe today that IT and Technology is a center of cost instead of the key vector for innovation will eventually disappear. Whatever the industry, IT and Technology must be considered as a key investment and the most important vector of innovation
- So all this definition part has been pretty generic. I would want now to focus a little bit more on the digital transformation of financial institutions. I would like to consider the digital transformations on two perspective : - First perspective concerns the challenges that the evolution of means and behaviour from the digital era is causing to financial institutions - Second perspective is the opportunities that the digital era is offering to financial institutions.
- [DOWN] Competitiveness In the digital ear, comparisons and advising web sites flourish and new comparison services appear almost every month. As an example, my father still buys his consumer electronic devices from the physical store closest from where he lives. I myself, I am using an aggregation and comparison web site to buy my devices from the online shop offering me the cheapest price. The same evolution that impacted consumer goods will eventually apply to absolutely every business including the banking business. Banking institutions need to adopt a fair price policy and emphasize clarity and simplicity when designing their products. [DOWN] Customer satisfaction In a digital world, people wants everything immediately. In addition, reputation is very important and can be harmed in no time. People suffering from stolen credit cards will express themselves on social network and can harm the reputation of an institutions that dealt badly with such a situation in no time. [DOWN] Customer centricity. Today more than ever replacing enhancing a thorough product development process with a customer development process, meeting the customer where he is, focusing on needs and demands needs to be the core focus of financial institutions. [DOWN] Marketing and brand. It’s all about innovation and reputation. Design the best products, the most innovative ones, implement striking online and mobile services, communicate about them on the right channels and the chances they become viral are important. At the same time an anecdotic fact , discussed widely on the internet and becoming viral, can cause a lot more harm to a company than a bad balance sheet. Again, making a difference in the digital era is all about innovation and reputation. [DOWN] Operation Efficiency. With shrinking margins and increasing product development costs, corporations need to rethink the way they work. Tracking and eliminating waste should be part of the business processes used to run the company, not a side activity to be done once in a while when shareholder complains. The key leads here are Process automation and the reduction of intervention delays. [DOWN] Risk Management and Mitigation In a digital world, the attack surface for cybercriminal or simply thefts is much larger than in the traditional world. New channels, especially digital channels, to access the banking institutions products come with higher risks. While a sampling approach to control and audit could be sufficient before, it is not the case anymore with the Digitalization. Banking institutions need to move their controls towards continuous, automated, comprehensive and real-time control and audit approaches. State of the art fraud detection systems are not optional anymore.
- [DOWN] Competitiveness In a digital world, technology can help putting in places platforms for co-creation and co-innovation, implicating the customers in both the identification of new products and the definition of new products, which are ultimately the best way to handle innovation and the requirement for tailor made. In addition, digital products can be made very customized. [DOWN] Customer satisfaction When processes and products are digitalized, achieving 24/7 availability is straightforward. A computer doesn’t sleep. In addition, communication about fair price strategies is easier when the catalog of products is available online. Finally, even customer follow-up processes can be automated. [DOWN] Customer centricity. The digitalization requires financial institutions to meet the customer on his preferred channels, but is also provides them with the means to do so. Getting online and digital, from a purely technological perspective, is not difficult. Changing the organization of the corporation to achieve the digitalization is the difficult part. [DOWN] Marketing and brand. It’s all about innovation and reputation. The digital world offers unprecedented opportunities to convince a customer to buy a product. Think of trial systems, demo systems, sandboxed. In addition digital marketing is now a field on its own. [DOWN] Operation Efficiency. Technology is also key to achieve Operational Efficiency. New products or technologies aimed at moving to a paperless corporation and dematerializing processes appear every month, not to say every week. Think of digital signatures, responsive interfaces, etc. [DOWN] Risk Management and Mitigation Here as well, most recent technologies such as Big Data Analytics, Machine Learning and real-time processing systems offer unprecedented opportunities to move towards continuous, automated, comprehensive and real-time control and audit approaches. In addition, web technologies have significantly progressed over the past 10 years making it possible to build responsive dashboards to monitor Key Performande Indicators and Key Risk Indicators as well as state of the art Data Discovery Platforms.
- So back to the topic “Risk management and Mitigation” both in terms of Challenges and opportunities. I recovered here what I have presented in the previous slides. This is where we, NetGuardians, kick in. [DOWN] (pause) This is the NG|Screener Platform is a Big Data Analytics platform that provides a continuous and comprehensive control framework for banking institutions. It covers a broad range of use cases going from User Behaviour Analysis to Predictive Analytics through continuous audit processes. I’ll describe the NG|Screener platform with more details on the next slide. [DOWN] (pause) The NG|Screener platform is in a unique position to help financial institutions in regards to addressing the Risk Mitigation challenges from the digitalization. In contrary to the usual BI approach, NG|Screener works online in near real time. It is designed from the grounds up to leverage Big Data technologies for continous and comprehensive control and audit processes. NG|Screeener comes out of the box with hundreds of controls aimed at detecting, and even further preventing, fraud patterns. [DOWN] (pause) In addition, NG|Screener makes financial institutions enter the digital era with their Risk Management and Mitigation processes. NG|Screener provides out of the box comprehensive dashboards and Data Analytics applications. The underlying Big Data Technologies leverage fraud detection algorithms to achieve fraud prevention. And it works in Near Real Time, addressing the usual drawbacks of Business Intelligence platforms which usually suffer from the one day later problem.
- The platform is composed by a lot of different components but there are four core components: [DOWN] (pause) First, the DCF – or Data Collection Framework – which extracts and normalized the various data we extract from the Banking Information System. The data we use from the Banking Information System is mostly business data, reference data, user activity trails and customer activity trails [DOWN] (pause) The second component is the NG|Screener Daemon. This is the big data analytics engine which runs control and operates the continuous and comprehensive control and auditing processes. Controls themselves cover a broad range of use cases such as producing compliance reports, searching for fraud patterns in the activity trails or profiling customers and users. [DOWN] (pause) The third component is the NG|Screener UI or User Interface. It provides internal control and compliance with a State of the art Dashboarding Application, a Data Discovery application and forensic investigations features. [DOWN] (pause) The last component is the NG|Case Manager application. Interestingly, this is the application that internal users of banking institutions are the most aware of since it’s the one they are confronted with. NG|Case manager is used to track alerts, reports and violations. It packages a state of the art workflow engines with enhanced notifications and integration capacities that tracks violation resolution, documentation and closing. It supports advanced statistics and analytics features. (pause) Of course NG|Screener can integrate with any GRC Software the banking institutions might already be using internally. (GRC stands for Governance Risk and Compliance)
- With the digitalization, new opportunities for growth and innovation are emerging. New regulations, and moreover changes in regulations to address these challenges will increasingly appear at an unprecedented pace. Experience shows that the structural changes needed to bring costs down and improve effectiveness in risk can be accomplished much like digital transformations in other parts of the bank. The distinguishing context of the risk environment, however, has important implications. Risk practitioners in most regulatory jurisdictions have been under extreme pressure to meet evolving regulatory requirements and have had little time for much else. Second, chief risk officers have been wary of the test-and-learn approaches characteristic of digital transformation, as the cost of errors in the risk environment can be unacceptably high. As a result, progress in digitizing risk processes has been particularly slow. At NetGuardians, we want you to be able focus on identifying your risk needs and key controls and take care of digitalizing the related processes for you.
- Follow us on Linkedin