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Business and IT Alignment in Corporate Banking


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Business and IT Alignment in Corporate Banking

  1. 1. Business/IT Alignment in Corporate Banking Service Oriented Architecture (SOA) Business process management (BPM) Gherda Stephens November 2010
  2. 2. TOP IT SPENDING PRIORITIESRecent research from CIO and IDG Research Services shows that companiesacross industries have put customer experience technologies at the top of theirpriority lists, and many companies say they plan to spend on thesetechnologies in the next 12 months Exhibit 1
  3. 3. BUSINESS-CRITICAL DECISIONSRecent survey by IDC Financial Insights noted that the sentiment amongclients is that digital services are very important in keeping them as clients(>80%) Exhibit 2:
  4. 4. “Banking is an IT game– everything is around IT Management competence and IT capability.”Australian bank GM The combination of SOA and BPM is the transformational technology platform of the decade” Belgian bank CIO
  5. 5. SOA and BPM to ensure Business/IT alignment in Corporate Banking • At the heart of Business/IT alignment is the ability of IT applications to support business strategy through business processes • Connecting current available application technologies to the existing banks legacy systems and to clients’ and/or partners’ systems must be a fundamental part of any bank’s business strategy • This is a recommendation to investigate SOA and BPM as a possible solution to address the above 5
  6. 6. COMMON FINDINGS FROM ANALYZING THE „AS-IS‟ PROCESS 1. Difficult to predict with accuracy when an application or case will be completed and how much effort / cost required 2. Current process dependent on experienced people 3. Hard to gather metrics on current performance 4. 80% of workload runs across 20% of department 5. Inconsistent approaches across different departments 6. No interdepartmental visibility of case work 7. Limited SLAs in existence and are largely unclear 8. No defined escalation paths 9. Systems are not integrated, have to manually transfer data
  8. 8. Horisontal Maps of the Corporate Coverage Landscape “How we do business” (Our Business How we do Business Strategy &Operating Model) Who is accountability Who is accountable? New Business (For each of the Origination/Deal Business Process What Support do we require end-to-end Team Concept Owner for each Business end-to-end Processes) process Business/IT alignment Existing Client Business Process What Support do Relationship Steering we require? Management/ Committees for (Business/IT Client-Centric ongoing Product Management Alignment) Approach Office (PMO) management
  9. 9. IT APPLICATIONS TO SUPPORT BUSINESS STRATEGY 1. SOA is an approach to integrate IT resources to enable leveraging of existing assets, while at the same time building an infrastructure that can respond to new and emerging business challenges and deliver new dynamic applications in a highly flexible manner 2. When it comes to information visibility and assurance, business process management (BPM) protocols allow both the IT and business sides to properly monitor bank transactions... 3. The combination of SOA and BPM is becoming the transformational technology platform of the decade
  10. 10. THE OPPORTUNITIES 1. Connect & inter-operate various legacy systems giving Bankers access to an enormous amount of data 2. Technology to help Bankers devise strategies and technology solutions around the business-critical issue of client engagement 3. Localising and rectifying problems, rapidly, by having both a holistic view of the process, and knowledge of whats happening in the process at each step
  11. 11. Banking Examples of SOA Payment Service, Charge Fee service Internet Banking Registry and Repository: Find Stop Business Process: Stop PaymentSecurity: Authenticate user Manage and monitor ESB: Routes to appropriate core system Data Services Process Services Business Logic: If Orchestration: Customer_Status = Gold Service_Fee = $8 else Service_Fee = $20 Fee database DDA / Current Account
  12. 12. Example of BPM: Open New Checking Account Human Business Process Management (BPM) Existing No Scan KYC Run ChexSystem Result Customer? Information OK? Yes• Features of Human BPM: – It involves human interaction (such as scanning KYC information) – It uses external processes such as Chex System. – It can be used to standardize business processes and reduce operational risk.
  13. 13. Service Oriented Architecture (SOA) THE OPPORTUNITY • Improve the efficiency with which we do business by breaking down the barriers between systems and applications • The key is a connected network of support systems, both across the organisation and across its stakeholders THE PROBLEM • Incompatible IT systems necessitate manual interventions across system boundaries, resulting in redundancy and errors • The need to provide client-centric services across multiple products and channels whilst having to meet an increasingly complex web of compliance & regulatory needs THE SOLUTION • SOA is an approach to integrating IT resources to enable leveraging of existing assets, while at the same time building an infrastructure that can respond to new and emerging business challenges and deliver new dynamic applications in a highly flexible manner THE RESULT • Microsoft and other service providers (next pages) have SOA offering that provides developers, architects and IT professionals with the tools, technologies, framework and guidance for building and maintaining SOA solutions • Provides business users with personal productivity software that increase productivity and optimising business processes 13
  14. 14. Business process management (BPM) THE OPPORTUNITY • Reduce the risk of increased communication errors by eliminating highly fragmented processes that require multiple handoffs • Improving processes across BU boundaries can contribute enormously to efficiency THE PROBLEM • banks Legacy systems that neither interoperate nor connect • Internal line of business applications not integrated with client service systems • Localising and rectifying problems—rapidly—is extremely difficult to do without both a holistic view of the process, and knowledge of whats happening in the process at each step THE SOLUTION • Business process management (BPM) can help financial services organisations obtain the needed visibility into their business processes. THE RESULT • Provides a graphical modelling environment • Enables prototyping and simulation • Automates the processes at runtime, plugging into existing IT systems (CRM, DMS etc.) and providing work-queues for staff 14
  15. 15. BUSINESS PROCESS MANAGEMENT (BPM) PLATFORMS INFINANCIAL SERVICES Real business projects are being delivered on BPM platforms today. They include trade management, client reporting and the process of bringing new business on board. Who are the firms doing these projects, and what are they actually achieving? DERMOT MCCAULEY 15
  16. 16. Singularity‟s Business Process Management PlatformAt runtime, the system drives work among teams, supporting complex routing and synchronizing manual activitiesAt the simplest level, tasks can be allocated to groups as well as individuals enabling a team to work on completion of a set of activities 16
  17. 17. Adobe‟s Business Process Management Platform • Rapid development environment • Automated document generation •Service-oriented architecture • XML-based data exchange • Digital signatures • Certified documents • PDF forms • Rules-driven engine • BAM
  18. 18. Microsoft‟s Business Process Management Platform• Allows businesses to expose its existing information assets as reusable services• These services can then be used to compose business transactions that connect with these services and aggregate into higher level business processes, and to compose user interactions that can be delivered to clients and consumed using their experience channel of choice 18
  19. 19. GEF‟s eXtreme Transaction Processing (XTP) Platform• GEF delivers a rich development framework that may be used to develop rich applications within a SOA Engineering paradigm • Logging and tracing Distributed Messaging • Business Process Flow Definition • Business Process Execution • Management Deployment • Service Containment 19
  20. 20. Create new applications from scratch or through reuse • For financial institutions, finding ways to get more mileage out of core applications, • The leverage-and-extend entry point helps financial institutions build flexible architectures and create new applications or services from existing code or from scratch by taking advantage of industry models or using a service-oriented architecture (SOA) approach. • Using industry models and/or SOA can accelerate deployment of new services, processes and user interfaces. • Using an SOA enables financial institutions to create independent services that can be used across platforms. • The IBM Rational offering helps enable your teams to accelerate your modelling, architect and assemble new business processes from existing services, and rapidly build modern Web2.0 interfaces. • The IBM Rational offering for leveraging and extending applications can also help reduce costs on application development and delivery time. 20
  21. 21. Automated Client On-boarding Clien CCG t 21
  22. 22. Automated Client On-boardingTHE OPPORTUNITY • 75% of the total cross-sales that banks obtain from their clients occur in the first three months • Potential to capture 90% of transactional banking wallet and 80% of investmentsTHE PROBLEM • Client’s first impressions of their bank are shaped by the account opening process • The process is manual and paper-intensive, making it difficult to focus on client acquisition, cross- sell and retention.THE SOLUTION • Automation of the on-boarding process (i.e. Singularity’s Account Opening Accelerator) • Combines an easy-to-use interface for Bankers with a state-of-the-art process integration engine that weaves the workflow through the various back-office systems • The Accelerator drives a fast, structured account opening processTHE RESULT • 80% reduction in client on-boarding cycle time • 40% increase in throughput capacity • 90% reduction in client acquisition costs • 50% reduction in failed transactions • 50% reduction in management overhead 22
  23. 23. Automated Account Opening
  24. 24. Case Management Connecting Systems,People and Processes 25
  25. 25. Five Essentials of the Case ManagementPlatform1. Goal Management Use CIB Goals to drive the Case2. Empowerment of Case Participants • ―extreme collaboration‖ by all • ―active case management‖ for all3. Adaptability in Case Execution • Cases ―emerge‖ over time • Cases ―change‖ unpredictably • ―Jump back‖ or ―Step forward‖ or ―Re-do‖4. Effective Availability of Information • Data, documents, artefacts, etc • Rapid orchestration of technologies • Context-sensitive presentation • Security-sensitive presentation • Record retention & destruction5. Enabling Continuous Improvement • All participants contribute to re-design • Built-in support for modeling, simulation, etc • Mine case histories for improvement ideas 26
  26. 26. 27
  27. 27. Singularity is a leading provider of business process managementsolutions to the global financial services industry. From offices inLondon, New York, Singapore, Ireland and India, they implementmeasurable improvements in process performance for leading financialinstitutions including JPMorgan, BNPParibas, Morgan Stanley,INVESCO, M&G and UBS.5th Floor, 101 MoorgateLondon EC2M 6SLUnited KingdomEMAIL: 28
  28. 28. Rapid Solution DevelopmentTHE OPPORTUNITY • Development of client-centric solutions ahead of the competitionTHE PROBLEM • IT department under pressure to produce robust, working solutions in aggressive timeframes • The accelerating pace of business change drives a corresponding requirement for rapid turn around of IT change requests and the implementation of new solutionsTHE SOLUTION • Business Process Management (BPM) technology that automates the tedious and routine elements of coding (i.e. Singularity’s BPM platform)* • Using Singularity’s integrated development environment, IT developers work with Corporate Clients to rapidly prototype a solution and then deliver a working system in dramatically reduced timeframes • Auto-generates user interfaces, system integration and data integration code, enabling building of a working prototype within hoursTHE RESULT • Reduces solution development times by up to 80% while keeping solutions aligned to client requirements • Facilitates ongoing changes to deployed solutions 29
  29. 29. Mobile Corporate Banking – Get In the Game Christine Barry – Research Director, Aite Group Laurie McCulley – Managing Director, Treasury Strategies Rhys Jones – Chief Innovation Officer, Fundtech Moderated by Rebecca Sausner – Editor-in-Chief, Bank Technology News How will your bank respond to the demand for mobile corporate banking? Aite Group research shows that 65% of treasury professionals are interested in these services, and almost half are willing to pay extra for them. With the meteoric growth of tablet computers like the iPad, treasury professionals will be demanding mobile services that will provide them with up-to-the-minute bank data, enable them to take actions like approve payments anytime anywhere, and receive alerts when accounts reach defined thresholds. Our panel of experts will help you understand the market, build a strategy, and get in the game. Christine Barry will explain the state of the market and present her research entitled “The Business Case for Offering Corporate Mobile Banking Services”. Laurie McCully will explain the treasury professional’s point-of-view focusing on their top needs and expected benefits. Rhys Jones will provide an overview of Fundtech’s new mobile corporate banking platform Mobile ACCESSplus
  30. 30. Adobe LiveCycle Mobile ES2LiveCycle Mobile ES2 allows organizations to extend LiveCycle workflows to mobiledevices including task approvals, content management, and data capture