Transcript Document
BANKS EDUCATIONIST CONFERENCE HYDERABAD 281105 PwC Forces shaping banking sector Indian banks are facing substantial competitive pressures as banking landscape gets redefined Increasing availability of risk management products like derivatives Managing asset quality, NPA Deregulation E-Business Privatisation / corporatisation / IPO’s BANKS Improving productivity Consolidation / Increasing M & A activity Greater managerial autonomy to banks Increasing financial disclosure requirements and credit rating requirements for banks Basel-II requirements, income recognition and provisioning standards PwC Major drivers for Banking Sector, world wide PwC Proposition:The Challenges of building a Financial Brand Products Profiles Exception Handling CONTENT CHALLENGE Skill sets Out-tasking Financial Brand Relationships Speed of response EXECUTIVE CHALLENGE BUSINESS CHALLENGE E-process Edge Any Other?? Value Network Channel Conflict PwC Imperative: New Business Initiatives The new business initiatives coupled with changing customer profiles are being partly addressed by technology enabled support infrastructure in banks. To successfully implement its business strategy, banks will need to conduct an organization restructuring initiative to ensure seamless conduct of multiple business processes for every business unit • Changing customer profiles Customer Relationship Management • Increasing demands by customers for varied services • Higher expectations of service quality especially for ‘anytime, anywhere’ banking Infrastructure Support Product / Service Development • Technology upgradation triggering the need for redesigned processes • Increase effectiveness of the HR function • Increased focus on retail banking • Tie-ups with financial institutions to market third party products • Foray into merchant banking PwC IT as a Ecosystem PwC IT & Business Dynamics Overheads Technology at the heart of it all !! PwC Technology- leads the Winning Combination “The winners will be those institutions that tie their technology to their strategies in order to meet their challenges.” Cost • Cutting Cost through Integration • Better Information Management Customer • Reaching Customers Faster • Managing Diverse Needs Competition Key Banking Technology Aspects Performance & Evaluation • Better Metrics to Benchmark Against • Objective Evaluation Process • Competitive Edge its Strategic Group Risk Management Complexities •Easier Risk Identification •Easier to Assess Risks PwC in Importance of core Banking solution Benefits of CBS Faster Response to Customer Demands Allows Faster New Product Developments CBS Architecture Allows for Existing Products to be Quickly Customized Online Validation of Data – at the Time of Entry Independent from the Organization Structure and Supports the four Primary Entities – Customer, Account, Product and Business Organization Runs in Real Time Update Mode PwC Technology creates new potential as well as new challenges New information technology impacts jobs in the organization in the following areas. E.g. By evaluating the impact of technology in operational areas, we can estimate the corresponding changes in the workforce profile. Multiskilling: Shifts in Workloads: What new skills are required: systems, functional, data analysis, management. I can check account balances and credit line immediately. Changes in the tasks, roles and responsibilities for users Does more empowerment mean more work? Integration and Timing: How we Communicate: The way the departments and individuals communicate. That information is now on-line for you to view. Accountability: What responsibilities individuals have in terms of entering accurate and reliable data, as well as analyzing data The application forms must be completely and accurately filled for me to generate an accurate scoring report. CENTRALIZED BANKING APPLICATION How and when groups within the organization interact to perform certain activities and achieve set performance measures. In order to disburse the loan I must receive the sanction letter two weeks beforehand. Decision Making Capabilities/Processes: The way decisions are made and/or who makes the decisions. Given the information I have in the computer, we’re not able to take decisions on providing services to this customer PwC Initiatives Taken as Winning Strategies Slashing Expenses Product Structuring Attempting Culture Change Optimal HR deployment Total Quality Management Initiating continuous improvement PwC A Process Risk Check Framework All the types of risks are verified through checklists when designing processes and risks are classified with the action plan detailed for controlling the same. Every process is run through a set of detailed checklists for each type of risk. Strategic Risk Operational Risk What are the inherent risks in the critical strategies adopted by the organization • What are the risks inherent in the processes which the organization has chosen to implement? How will the organization identify, quantify and manage these risks? What is the organization? risk appetite of the • How does the organization identify, quantify and manage the same? • How does the organization adapt its What risks emanate from e-business activities as strategies and process developments? changes Information Risk Financial Risk • Have operating processes put financial resources at undue risk? • Is our data / information / knowledge reliable, relevant, and timely? • Has the organization incurred unreasonable liabilities to support operating processes? • Are our information systems reliable and secure? • Has the organization succeeded in meeting measurable business objectives? • Do our security systems reflect out ebusiness strategy? PwC Process Example – New Sales Process New Sales Process to to relevant relevant process process Start Start Establish Establish initial initial customer customer details details (if (if existing existing customer, customer, access access records) records) name name address address contact contact number number unique unique ID ID Establish Establish enquirers enquirers needs needs and and wants. wants. Gather Gather any any preliminary preliminary information information relevant relevant to to enquiry enquiry Existing Existing customer customer service service Determine Determine relevant relevant solutions solutions Go Go to to application application essential essential details details fact fact find find no Information Information only only no Have a solution yes Product Product selection selection and and comparisons comparisons Still Still interested interested no yes Determine Determine relevant relevant solutions solutions and and provide provide information information Further Further requirements requirements New yes New product product application application yes Third Third party party yes Record Record reason reason why why not not accepted. accepted. no Notify Notify no no solution solution Collate Collate data data inform inform marketing marketing End no PwC Possible Approach & Methodology Processes would be redesigned using the Zero Base approach through a series of workshops to ensure buy-in and ownership Zero base • • Does the work need to be performed at all? Can the activity be performed differently? Eliminate Which are the NVAs (Non Value Adding Activities) in the process? • Is the customer willing to pay for it? Do v/s Outsource • • • Can the work be outsourced? What are the costs & potential benefits? Re-design • Are the core processes customer-centric? • Would the re-engineered processes help eliminate organizational silos? Information Technology • Can existing IT systems be leveraged to enable radical process redesign? • How to improve ROI on the IT investment? PwC The Winning Model – technology driven customer focus CUSTOMER Customer Management DELIVERY Manage Delivery Channels: Post Internet Tele-Marketing iTV ATMs / POS Sales Force Branches Call Center(s) Third party Desktop Banking Originate Credit Service Customers Excess Management KNOWLEDGE MANAGEMENT Core Banking INFORMATION MANAGEMENT SERVICING Market & Sell Manage Customer Relationships OPERATIONS PRODUCT MANAGEMENT Process & Maintain Accounts Develop Products Money Transmission Marketing Manage Products Monitor Credit SUPPORT FUNCTIONS Recover Assets HR Manage Property IT Finance Treasury PwC Administration Imperatives: Impact on the HR function • Redesign the HR Infrastructure to exploit the opportunities provided by the environment: – Redesign HR systems and policies in the areas of: • • • • • • Workforce planning and deployment Rewards & Incentives Workforce performance management Training & Development Career & Succession planning Talent sourcing PwC Cont….. • Ensure that the HR function is geared to address the changing business environment – Capability to handle workforce issues like deployment and reskilling arising out of emerging opportunities – Capability to address the workforce requirements of the new business initiatives – Capability to handle the workforce issues arising out of the growth plans of banks specifically through the acquisition route PwC Towards A Balanced Approach The core performance management system should integrate the collection, aggregation, management, distribution and analysis of a balanced set of information to positively affect stakeholders’ decisions. DATA Strategy Definition Validation Access Tools & Technology Hardware Software Communications Integration People & Process Sponsorship Profiles Manage change Value added Tools & Technology People & Process BI Data / Analytics Business Strategy Data Warehousing Strategy Data Warehouse Program Application Development Program Subject Areas Data Resource Management Program Technology Architecture Program Network/ Communicati ons Program Geographical Areas Business Units People/ Process Users Departments PwC • Thank You Contact: Robin Roy [email protected] 022 56691561 098202 98237 PwC