Hotspot 1 – Revenue enhancement
- U.K. Banks’ Profits Squeezed by Slow Lending Recovery – Bloomberg
- Aust bank fees down but revenue pressure for banks - ANZ Bank Blue Notes
- Bank of America’s Data Mapping Adds $1 per Share - Forbes
Consumers have become more demanding. To grow revenue, banks need to gain better insights about their consumers – their life style, their purchasing habits and their preference. Mining consumer data from social forums like Facebook and embedding analytics into banking processes delivers fact-based insights and help design personalized product offers. Banks are partnering with BPO services providers in areas such as managed marketing services to set-up integrated capabilities to improve marketing processes by using analytical tools, adopting campaign management platform and deploying proven process delivery capabilities. These steps help banks improve efficiency in marketing processes, drive digital and mobile channel adoption, identify opportunity to boost sales revenue by up to 25%, and gain faster return on investment (ROI).
Hotspot 2 – Technology shift
- St George to allow fingerprint access to bank accounts with new iPhone – Financial Review
- The way Bank now embraces a digital banking revolution – Lloyds Banking Group
- Barclays announces mobile payments to India through market leading Pingit service – Barclays
The nexus of forces – social, mobile, cloud and analytics are influencing how consumers and businesses interact. As social and mobile tools become increasingly important to support business activities, organizations need to integrate their current systems and processes to mimic this change. IBM Financial Services Automation and Analytics Asset (FSAA) does just that and help clients reduce process cycle time by up to 80% and enable 20% – 50% reduction in process cost. For example, IBM’s Digital Loan Processing Solution built on the FSAA platform allows lenders to transform the loan application process. It seamlessly integrates with existing Loan Origination System, helps customers collect and process documents; offers digitization capabilities for paperless processing through underwriting; uses robust business process and rules management to execute logical workflows and provides real-time process monitoring.
Hotspot 3 – Cost Reduction
- Citigroup still has a way to go in cost-cutting program – Reuters
- JPM investment bank boss says ‘laser focus’ on costs cuts – Reuters
- Deutsche Bank performance boost hinges on cost-cut plans – Reuters
Lowering operational expenses continues to be a critical imperative for banks. They are looking to streamline processes and adopt variable cost structures to adapt to the changing demands of their business. Financial services companies are partnering not just to reduce cost but industrialize operations across key functional areas – customer servicing, finance & accounting, procurement, and human resources to gain the advantages of standardization, innovation and improved cost and cash flow related benefits. Shared services model and cloud capabilities offer bank improved flexibility to adopt new business and operating models, and respond better by anticipating market shifts. These steps are helping banks achieve 30% to 60% run-rate savings from operational cost baseline; 15-25% improvement in working capital and up to 10x ROI with source-to-pay collaboration.
Hotspot 4 – Regulatory Pressures
- Deutsche Bank sees pressure ahead on regulatory ratios – Reuters
- Barclays Swings to Profit but Regulatory Issues Persist – The World Street Journal
- Regulatory Pressure Will Prevent HSBC Holdings plc, Banco Santander SA And Lloyds Banking Group PLC From Pushing Higher – Yahoo Finance
Banking & financial services companies face an ever-changing and increasingly complex regulatory environment. New regulatory reforms continue to emerge, with no apparent reduction in frequency. Banks see localization of regulatory requirements as a serious threat to operating a sustainable global business model. It adds to the cost of operation and impact services to global clients. Services such as IBM Accelerated Financial Reporting (AFR) built on the cloud enabled reporting factory model are transforming reporting operation. Banks are able to reduce cost with 25% to 35% productivity improvement, reduce complexity and free up highly skilled resources to deliver improved business insights.
Hotspot 5 – Financial crimes
- Standard Chartered NY forced to suspend clearing following AML concerns – Banking Technology
- Bank of England tackles “critical” cybercrime attacks – Banking Technology
- Tokenisation may offer antidote to soaring cyber-crime epidemic – Banking Technology
The explosion in global connectivity has provided malicious insiders and organized cyber criminals’ greater opportunity to commit more frequent and complex fraud schemes. Embedding analytics into banking processes and customer transactions help banks with advance detection of financial crimes and fraud cases. Banks are able to uncover fraud and suspicious activity and take proactive action before damages and loss occur and reduce operational cost.
Today BPO services providers and process experts are working with leading banks and financial companies to not just reduce cost and industrialize their processes but help banks become more agile by taking steps to:
- Mine consumer and business insights and develop targeted marketing campaigns
- Integrate social and mobile tools into current systems and processes to mimic the technology shift
- Adopt cloud and shared services model to improve flexibility in operating model
- Embed intelligence into customer transactions to pro-actively detect fraud and reduce losses
- Take advantage of technology and analytics to streamline regulatory filing and disclosure requirements
For more information, you can visit IBM GPS –Financial Services and contact our expert Heike Figge, GPS Financial Services Leader IBM Europe, Heike.Figge@de.ibm.com and Jeffrey R Nuckols GPS Director Financial Services, IBM North America, email@example.com.