Agile Financial Times October 2009 Edition

Agile

FINANCIAL TIMES

Bancassurance Emergence and Global Trends

CUSTOMER SPOTLIGHT

Reliance Mutual Fund PERSPECTIVE

Business Intelligence in BFSI SOLUTION SPOTLIGHT

AGILIS 1KEY BI Suite

October 2009

October 2009

Editor’s Note CONTENTS CUSTOMER SPOTLIGHT

Reliance Mutual Fund

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COVER STORY

Bancassurance Emergence and Global Trends

6

NEWS

Global Update

10

PERSPECTIVE

Business Intelligence in BFSI 12 SOLUTION SPOTLIGHT

AGILIS 1KEY BI Suite

Be Agile! Shefali Khera Chief Marketing Officer Write to us at [email protected]

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CUSTOMER SPOTLIGHT

Reliance Mutual Fund Leveraging data for analytics

Reliance Mutual Fund is India's largest mutual fund company, and is part of the Reliance Anil Dhirubhai Ambani Group. On the equity side, it has the largest workforce, comprising economic teams, separate core teams and fund managers.

Reliance Mutual Fund (RMF) is one of India's leading mutual fund companies, with Average Assets Under Management (AAUM) of ~ INR 11.7 bn and an investor base of over 7.4 million individuals. The Challenge

As part of its regular business operations, RMF carries out high level research for more than 500 companies. As a result, huge amount of data is generated, posing a challenge in terms of analysing this data and developing different reports for various stakeholders. The existing IT systems were struggling to handle this, and would generate static reports from within the application, which could not be viewed under different scenarios. Though the CRM solution had reporting capabilities, it would often fall short when it came to providing detailed reporting. Project Background

RMF found it a significant challenge to handle the scale of data and make analysis and insight available to users across 180 locations. Some of the issues they faced included:






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analysing the data of 7 million customers and understanding their behavioural patterns Lack of real-time access to decision making information, due to which productivity of business users was adversely impacted. Inability of end-users to consolidate data being gathered through sales activities and campaigns, mapping it to the CRM and then preparing reports.

CUSTOMER SPOTLIGHT

Supplier Selection

RMF was actively searching for a Business Intelligence (BI) tool that would be easy to learn, use and deploy across the enterprise. It evaluated a couple of traditional BI tools but found that they had some serious limitations. They were meant for a select few expert analysts, difficult to deploy and involved excessive time for training users. RMF chose 1KEY Agile as the front-end tool, as the interface was similar to Excel, yet powerful enough to deliver on-the-fly report requirements of the business users. In addition, as 1KEY Agile was developed on the Microsoft .net framework, it could be easily deployed on the Windows platform which was being used at RMF. The fact that the deployment would take only a couple of days worked in favour of the application during the selection process. The timeframe for the implementation across the enterprise was just one month, with a day required for technical and functional training of the fund managers and research team. Implementation

The technology involves multiple database access that was made available to end-users, who were identified by the BI team at RMF based on their requirements and subsequently mapped to 1KEY Agile. Information was consolidated across all internal applications, including portals. User management was implemented through Active Directory, which is supported by 1KEY Agile, and was deployed on Citrix server for faster deployment and instant access to web-based reports. 1KEY Agile was made a standard interface for all reporting and analysis requirements, a decision which helped RMF save enormous time and the trouble of building custom reports. 1KEY Agile was found to be similar to Excel in terms of ease of use, at the same time offering better features and better control on the data. It has become a standard interface that gives flexibility and has considerably reduced the learning curve. Business Benefits

With 1KEY Agile, RMF can generate different types of reports for various users involved in equity research based on their roles, albeit from the same data. The RMF team is very happy and satisfied with the 1KEY Agile deployment and the fund managers, who need to modify their queries at various stages of their decision-making process, find it very easy. Reports that earlier required intervention from the IT department and took 15 minutes, are now being generated by business users in a fraction of that time. Marketing and operations teams, fund managers and research teams, all log in to 1KEY Agile to generate reports and access all their applications. The ad hoc reporting facility from 1KEY Agile has been found to be the most valuable and sought-after feature. Sales teams are now using 1KEY Agile to effectively sell funds to distributors, as it gives them the ability to quickly generate historical reports to target and qualify specific advisors. RMF also uses 1KEY Agile Scheduler extensively to send scheduled reports via e-mail. Due to its comprehensive capabilities and remarkable flexibility, 1KEY Agile has taken immense pressure off the IT team and has given users the freedom to self-serve themselves. Conclusion

1KEY Agile has been instrumental in increasing operational efficiency at RMF substantially. In a phased manner, RMF plans to extend the usage of the application to all its users, including sales teams, distributors as well as all the branches. With 1KEY Agile, RMF was able to save cost and turn-around-time required to cater to the reporting needs of the fund managers, research teams, MIS team, risk team, operations and IT.

The RMF team is very happy and satisfied with the 1KEY deployment and the fund managers, who need to modify their queries at various stages of their decisionmaking process, find it very easy now. 5

Bancassurance is a comparatively new phenomenon in the financial world and may have slightly different connotations across the globe, as it takes into consideration many regulatory and legal aspects. In essence, bancassurance refers to the partnership of an insurance company with a bank, where the former uses the latter to refer, sell and distribute insurance products and services. The insurance company trains and advises the bank staff, with both parties sharing the commission.

Bancassurance Emergence and Global Trends Bancassurance emerged when a mature banking industry in France aimed at adding value to services for its customers, and decided to offer customers a onestop shop to cater to all their financial requirements. With a positive impact on profits, customer loyalty and diversification, the concept achieved a lot of success in the country, as is evident from the large number of French bank groups having life insurance subsidiaries. Another manifestation of the popularity of bancassurance is that French bancassurers premium collection increased from 37 percent of all life insurance premia in 1990 to 64 percent in 2006. Other non-life insurance premium shares have also registered increases. The success has been attributed to the capacity of retail banking networks to sell individual policies. Banks are using success in life-insurance to build on their other services. Innovations in the form of non-standard policies such as company savings plans, death/ disability/ care/ illness insurance policies, property and vehicle insurance have been introduced, depending upon the demographics of a region. According to the European Life Bancassurance Review released by Milliman, bancassurance in France has maintained its market share as tax and regulatory changes were optimized adequately. Innovative products and services for customers and creation of new opportunities helped sustain the growth. After France, other European countries followed suit, with Spain and Austria being among the more successful. According to other findings of the Milliman report, bancassurance was found to be a major distribution channel in Europe, accounting for over 60 percent of individual life insurance premiums in France, Italy, Portugal and Spain, and over 50 percent in Belgium. Countries such as United Kingdom and Germany have had limited success.

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COVER STORY

Over all, an extremely supportive regulatory framework, well-developed banking network, simple and innovative financial products, and strong relationships with banks have helped in making bancassurance successful. Concept Globalization: Mixed Response

Bancassurance has gained prominence and acceptance in other parts of the world only in the last few years. Many governments delayed their decision to allow banks to take up insurance for the fear of giving them too much control over financial markets. The 2008 study by the American Bankers Insurance Association, in cooperation with Reagan Consulting, on ‘Banks in Insurance’ revealed that 96 percent of banks currently distribute insurance products and believe that insurance businesses add value for bank shareholders and about 40 percent reiterate saying it adds "significant" value. However, the progress of bancassurance has been slow in the United States. As the industry coped with regulations that were not very favourable, banks attempted to achieve success more through distribution rather than through innovation. Penetration has been low as marketing initiatives to increase awareness among customers lacked efficacy. Latin America

The European bancassurance model was successfully replicated in Latin America. Insurance penetration is low in the region in the range of 5 to 8 percent. Regulations vary in countries in the region but most allow the sale of insurance products to a bank’s customer base with certain restrictions. For instance, Argentinian law requires the presence of an intermediary when selling insurance to a bank customer, while Chile does not allow direct sales to a bank’s customer unless such sale is incidental to a banking product. The region needs to focus on making the distribution approach more effective. Bancassurance is gaining importance as a distribution channel in the region and its success can be attributed to the following factors:




Emphasis on advanced financial market integration; Structural changes in the financial markets and insurance industry; and Entry of experienced foreign insurers.

Brazil and Mexico dominate the Latin American insurance industry. Mexican insurance market generated more than 25 percent of the total premiums in the region and the country registered an increase of 16 percent year on year in net written premiums in the first nine months of the last fiscal.

Clive C R Bannister, Group Managing Director of Insurance at HSBC Holdings plc, recently spoke at an industry conference. Here are a few thoughts from his speech, 'Delivering Growth through Bancassurance': Bancassurance success comes from identifying a customer need and providing key products, and is strategically logical in the process of broader wealth management. Bancassurance knows and touches more client's financial needs than any monoline insurer. There is a strong rationale for banks to focus on selling insurance products. People who are over 50 years old possess 70 percent of all financial assets. With better healthcare, the longevity of population globally is moving upward. These individuals need protection (insurance) and advice on investments - not more borrowing, thus building the case for life, pensions and investment products. Bancassurance also helps in internalising profits that are otherwise paid away to an agency sales force, and is a winning strategy because











Life insurance product sales through the bancassurance channel played a major role, with penetrations close to 80

Customers want 'one-stop shops' that offer a full range of banking, pension and investment products to meet their total financial needs. Most international banks have strong brands and capital resources, which promote and provide good financial certainty and long term risk protection, respectively. Banks have access to significant customer bases in all major markets. Banks possess appropriate channels e.g. branch, sales forces, direct marketing and internet banking. Insurance is a logical 'add-on sale' to loan products. Insurance allows banks to diversify earnings from interest to fee-based income.

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COVER STORY

percent of the total life market in Brazil. A number of joint ventures are active in the region, some of the prominent ones being Bancomer and Aetna in Mexico, Banorte and Generali in Mexico, AXA and BCI in Chile. Asia

Asia has been a region of high growth, primarily due to the Indian and Chinese markets. Changes in policies and other regulations are fast paced and bancassurance stands to benefit. As part of a pilot program launched in April 2009, four large state banks in China will be allowed to operate insurance companies. "We have reached an agreement with the insurance regulator on allowing banks to set up their own insurance companies, and the big four banks will be the first to run it on a pilot basis," said Lai Xiufu, an official from the China Banking Regulatory Commission (CBRC). With the insurance sector growing at about 20 percent annually, even mid-sized banks are looking to capture the opportunity. According to Daniel Wong, analyst at Moody’s, a positive longer-term growth of bancassurance in China is expected.

revenue stream for banks in Africa. For instance, Standard Chartered Bank recently entered into a deal with Sanlam to offer insurance in five African countries. These countries have also been identified as regions that have potential for success in bancassurance as consumers become more and more demanding. Standard Chartered, which is considered by many to be a front runner when it comes to innovation, plans to tap this market by offering policies that will appeal to the region and will cover illness, funeral expenses, savings, education and life insurance. Middle East

Insurance products could be a major source of revenue for banks in the Middle East, but call for changes in legislation and internal processes. Bancassurance is still in its nascent stages of development in many Middle East countries. According to an industry expert, bancassurance has the ability to generate 50 percent of a bank’s fee-based income and considers legal issues as the major stumbling block to its growth in the UAE. Going Forward

With the growing demand for insurance products and the existing low level of bancassurance penetration of the market coupled with the banks’ capability to reach customers through their extensive branch networks, will all work in favour of the industry. Similarly, the constitution of a panel by the Insurance Regulatory and Development Authority (IRDA) in India, to examine the need for a separate regulation for the bancassurance model indicates the interest generated in the country. The panel will evaluate the current regulatory requirements for banks that allow them to tie up with only one life insurance company and one general insurance company for bancassurance, which is restricting the growth of this industry. India has a strong network of banks in the public, private and co-operative sector, but a dismal 3 to 4 percent insurance penetration rate. The Japanese market is dominated by agents and has one of the highest rates of insurance penetration. Other countries such as Korea, and the Philippines have only recently started to experiment with this channel of insurance delivery.

Markets that are greatly liberalised and have higher insurance penetration have not really been able to showcase similar success when it comes to bancassurance. Bancassurance typically works better under a regulated environment where penetration is low and closer interaction with customers can influence decisions. Technology is also expected to play a major part in the growth. Different needs of different models create a challenge for users, both for insurers and banks. Automation, quick access to clients, flexibility to cater to the entire value chain, are some of the facilities that technology can enable. Globally, there is considerable debate about best practices for bancassurance. It needs a strong backing of regulatory measures, and banking and insurance policies that can aid its growth. To sustain growth the service needs to build on the existing advantages of its ability to cross sell to the large base of bank customers, get huge volumes in exchange for a marginal commission paid to banks and be able to use the existing bank infrastructure.

Africa

Bancassurance has been introduced in the recent past in most African countries, with private players tying up with various banks and insurance companies to set up operations. The insurance penetration level in most countries in this regions is abysmally low. Bancassurance has been stated to be the fastest growing

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Markets that have recently introduced this service can expect to witness a large number of mergers and acquisitions as players with the capacity to service high volumes will capture new markets. Similarly, the ability to innovate in order to cater to regional requirements and experience in other markets will help larger players to capture a greater market share.

COVER STORY

Making Bancassurance Agile Presentation at the 4th Annual Bancassurance Conference in Vienna Kalpesh Desai, CEO of Agile FT, recently spoke at the 4th Annual BancAssurance Conference in Vienna, Austria, on ‘Making Bancassurance Agile’. The audience included senior representatives of the banking, insurance and financial services globally who travelled to Vienna specially to attend the conference. Captured here are a few highlights of the speech:

Bancassurance has now grown to become one of the largest distribution channels for insurance companies across the globe. In order to reduce dependence on interest-based income and alleviate the effects of increasing competition and declining margins, banks too have been actively exploring different avenues to generate income, hence their interest in cross selling insurance to their incumbent customer base. With an increasing number of insurance companies and banks partnering to explore this business model, the competitive pressure on productivity, efficiency and customer service standards has led to an aggressive adoption of technology. On one hand, the alignment and integration of various processes have resulted in helping insurers and banks to achieve seamless integration, while on the other hand, technology has been a key enabler of customer segmentation and superior service delivery. The recent trend among BFSI companies in general and bancassurance providers in particular is to move towards technologies which offer higher variability in expense control. With platform-enabled outsourcing emerging as the definitive model for many banks as they strive to lower operational costs to ensure a high return on investment, there is no better time than now, to leverage functionality-rich application software platforms! Platform-enabled service has evolved from the software-as-a-service model and is a step ahead. It provides a completely flexible and configurable platform to create, run and operate applications. Applications include design, development, testing, deployment, hosting, and application services such as security, scalability and versioning. All this is completely available

as an integrated suite from the internet, where no software or installation downloads are required. In addition, with the Infrastructure-as-a-service model, there is no need for corporations to allocate capital expenditure to purchase servers, software, and data centre space or network equipment, but instead they can buy these resources as a fully outsourced service. In a scenario where most banks and financial companies are already straddling a host of legacy and fragmented systems within their own set-ups, technology imperatives for bancassurance may seem to be prohibitively high. Meanwhile, companies active in strategic bancassurance partnerships continue to seek technology which can provide the necessary fuel to enhance flexibility in adopting, integrating and implementing change. Technology that can provide all this without "locking-in" companies in heavy investments will help bancassurance providers become truly agile. Financial institutions need to ask themselves - are we taking advantage of the benefits that can be sought from this model in order to stay ahead of the competition and drive innovation?

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NEWS

Global Update A quick review of industry news from around the world. Recession 'very likely over' - Federal Reserve

According to the Federal Reserve Chairman, Ben Bernanke, the worst recession to hit the world since the 1930s, is probably over. Bernanke cautioned however, that even though the economy is likely to show some growth now, it may not be enough to prevent the unemployment rate from rising, which is currently at a 26-year high of 9.7 percent. Bernanke expressed confidence about the ability of the Congress to avert any future crisis and that it was willing to revamp the nation's rulebooks in order to do so. "I feel quite confident that a comprehensive reform will be forthcoming. It has been too big a calamity over the past year, with the near meltdown of the US financial system, for Congress not to take action," reiterated Bernanke. He found support in President Barack Obama, who urged the Congress to enact legislation this year. Though official confirmation is awaited, many analysts have predicted that the economy which had contracted at a 1 percent pace in the second quarter, is growing at an annual rate of 3 to 4 percent in the current quarter. Nokia Money Happen

-

Making

Mobile

Payments

Nokia Money, a new mobile financial service is a simple and convenient medium through which consumers can send money simply by using the receiver's mobile phone number. The service allows consumers to pay suppliers for goods and services rendered as well as pay their utility bills, or even recharge their prepaid SIM cards. The service includes accessibility 24 hours a day from any location. This in turn

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results in huge savings in terms of travel costs as well as time, for the users. To facilitate an efficient flow of funds, Nokia is building a wide network of Nokia Money agents, where consumers can deposit money in or withdraw cash from their accounts. "We believe mobile financial services offer a market opportunity with long term growth potential. With more than 4 billion mobile phone users and only 1.6 billion bank accounts, global demand for access to financial services presents a strong opportunity to combine mobile devices with simple but powerful financial services such as Nokia Money", said Mary McDowell, EVP and Chief Development Officer, Nokia. The Decoupling Debate

Decoupling alludes to the phenomenon that emerging markets in Asia and elsewhere would remain indifferent to funding received from the Western world and that their economic growth would no longer be a function of the health of the industrialised world. The belief that emerging economies had decoupled because of the existence of strong domestic markets, high currency reserves and prudent macroeconomic policies, bit the dust as the Wall Street meltdown set the global financial system trembling, Asian markets notwithstanding. So though it may still be premature to declare decoupling, business cycles in Asia, especially East Asia, are fast moving towards more cohesive financial linkages. As the regional economies integrate, trade as well as production accelerate, and consumer markets develop, it is felt that Asian economies will reduce their dependence on the US and European economies. This coupled with dollar de-linking may well lead to decoupling.

NEWS

Bank of England Sees Silver Lining

According to a senior policy maker at the Bank of England, the British economy could resume its tread on the growth path as early as the next six to nine months. However, there is an underlying cautionary note, that this growth may still not prevent unemployment from rising for at least a few more months. According to David Miles, an external member of the Bank's Monetary Policy Committee, there may be a few quarters where the economy could witness small increases in the GDP. Technically, this implies that the country could be out of recession in six to nine months. But, he also indicated that the current levels of spare capacity and low inflationary pressure may keep the interest rates at low levels and it would take a while to rebuild the banks' cash and reserve levels. CIC to Acquire Stake in Noble Group

China's sovereign wealth fund, China Investment Corporation (CIC), proposes to buy a 15 percent stake in Noble Group. It is proposed that US$850 million worth of new and existing shares of Noble will be sold to CIC at 8.1 percent discount to the last traded price. CIC has decided to increase investments in commodities after it earlier lost money on financial firms including Blackstone Group LP and Morgan Stanley. Noble, the Hong Kong-based supplier of commodities, will benefit from China's demand for coal, iron ore and soybeans. The second-quarter profit at Noble doubled as China boosted raw material imports to fuel US$586 billion of stimulus spending needs. China is the world's biggest buyer of commodities including soybeans, soybean oil, cotton, iron ore, aluminum, copper and zinc.

sold US$500 million in a re-opening of its 7.625 percent bonds due in 2036. The South American country tapped overseas debt markets amid a rally in emerging-market debt, sparked by a recovering global economy. The country's offering follows a US$1.75 billion debt sale by Mexico last week. Uruguay is also preparing to hold presidential elections in the end of October and Latin American companies have stepped up debt sales this month. Petroleos Mexicanos, the largest oil producer in Latin America, sold US$1.5 billion of 5.5-year bonds, while Brazilian iron-ore miner Vale SA sold US$1 billion of 10-year bonds. Iran to Replace the Dollar with the Euro

Iran's President, Mahmoud Ahmadinejad, has ordered the replacement of the US dollar by the euro in the country's foreign exchange accounts. As per a report from the Mehr News Agency, the September 12th edict was issued following a decision by the trustees of the country's foreign reserves. Since the introduction of the euro by the European Union, the euro has gained popularity internationally and there are now more euros in circulation than the dollar. The move will also help decouple Iran from the US banking system. Higher Tax - Indicator of Faster Recovery?

Indian companies have paid twice the amount of tax this quarter as compared to the last, fuelling discussions that growth in the Indian economy may be accentuated. Advance taxes paid by corporates was at INR 440 billion in the JulySeptember quarter. United Korea - a Force to Reckon With?

Asia to Lead the Bounce Back

Asian Development Bank (ADB) in its flagship publication, Asian Development Outlook (ADO) 2009, says that Asia is proving to be more resilient to the global downturn than was initially thought. The update to ADO forecasts economic expansion in developing Asia to come in at 3.9 percent in 2009, up from the 3.4 percent expected in March. In 2010, the growth projection is likewise upgraded to 6.4 percent from 6.0 percent. Stronger growth in East Asia and South Asia underpinned the improved prospects. This can be attributed to a number of factors such as affirmative action by many governments and central banks, the existence of relatively healthy financial systems prior to the global crisis, and the rapid turnaround in the region's larger, less exportdependent economies. Uruguay Sells Bonds in Overseas Markets

Uruguay sold US$500 million of bonds maturing in 2025 in its first international debt issue in three years. Uruguay issued the 16-year bonds to yield 340.3 basis points above the US Treasury, according to data from Bloomberg. The issue is the first since October 2006, when the government

According to Goldman Sachs, a united Korea, which implies the coalition of Asia's fourth biggest economy with one of its poorest, forms an economy that could surpass that of Germany or Japan in terms of GDP, within the next three to four decades. Although North Korea's economic system appears to be on the verge of a collapse, it brings in its wake huge mineral resources and a large, cheap workforce. Even though this reunification may not be without risks, Goldman Sachs feels that it can be made viable by restricting inter Korean migration and adopting policies similar to those in the case of Hong Kong/China. Reduction in China Export Slowdown

China had been experiencing a decline in exports since November last year. However exports from China fell at their slowest pace in nine months in September 2009. The shipments from China dropped 15.2 percent to US$115.9 billion as compared to September 2008 (a recent survey of economists had estimated the average decline at 21 per cent). The fall in the rate of exports decline was mainly on account of shipments to the US and the European Union picking up.

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PERSPECTIVE

Business Intelligence in BFSI Gateway to greater profitability - Sanjay Mehta, CEO, MAIA Intelligence

The banking and financial services industry, like many others, is changing fundamentally and is in a state of rapid transition. Banks have become complex financial organisations offering a wide variety of services to international markets and controlling billions of dollars in cash and assets.

Supported by the latest technology, banks are striving to identify new business niches in order to develop customised services, implement innovative strategies and capture new market opportunities. With further globalization, consolidation and turmoil in the financial industry, the banking sector is becoming more complex by the day. Furthermore, the modern financial industry has brought greater business diversification. Some banks in the industrialised world are entering into investments, underwriting of securities, portfolio management and the insurance business. All put together, these changes have made banks a potent entity in the global business community. Business Challenges

The evolution of the financial services industry is fraught with challenges and opportunities. Over the last several years, financial modernisation, industry consolidation, rising new institutions, shifting trends in borrowing and lending and emerging technology, have influenced and affected the operation of financial institutions. Institutions are in a perpetual balancing act with credit risks on the one side and satisfying the changing needs of their customers with a wide variety of products, such as mortgages, home equities, credit cards, lines of credit, savings and checking accounts, insurance and investment products, on the other. In addition, with money laundering on the rise around the

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PERSPECTIVE

world, regulatory response has also increased. It focuses on an institution's lack of consistent internal controls, poor governance and oversight. Financial institutions need to be able to estimate and review risk and compliance with regulations such as Basel II and mandatory capital requirements. Now, more than ever, banks need better understanding of key indicators and best practices for decision making in all areas of operations, including:







Improving customer service and retaining customers Acquiring new customers using competitive market initiatives Enhancing sales and service Pricing and analysing return on investment Managing risk and preventing fraud Drawing financial flows, valuations and forecasting

Technology Challenges

Apart from their core solutions, organisations need to have software applications, preferably based on a service-oriented architecture (SOA) addressing data and information management to proactively analyse and learn from large volumes of transaction data. The primary challenges that a typical bank or financial services company would face are:





Consolidation - Data for reporting typically resides in multiple systems with no interface between these applications. While the data is refreshed on a daily basis in one application, the previous day's data is lost if not loaded in the central data warehouse. Companies need to invest in an ETL Tool. Volume - A large number of reports are required on a daily/weekly basis for the ongoing sales, marketing and customer campaigns and schemes.

including e-commerce and ATMs. Deploying a data warehousing and business intelligence capability will be the logical and immediate next step for banks in their strategic use of information technology. Business intelligence aids organisations with critical insights into core business strategies and strategic policies. It reveals concealed trends in the past as well as the present and reveals future obstacles that the company may not have otherwise been aware of. Traditionally, financial institutions have invested money and effort in predictive and descriptive models to understand key influencers and predict changes in the business by analysing the data collected in daily business operations. Business intelligence may be used to design reports and executive dashboards as well as to understand risk and fraud, determine marketing return on investment and improve business operations at every level. Global competitive advantage requires highly developed data analysis to improve customer profitability, manage risk, reduce operating costs and provide better service offerings. CRM solutions, when implemented and integrated correctly, can help significantly in improving customer satisfaction levels. Data mining helps the industry to analyse and measure customer transaction patterns and behaviour. This can aid in creating forward-looking suggestions that will help to:






Segment and predict behaviour of homogeneous groups of customers Detect patterns of fraud Identify causes of risk, create sophisticated and automated models of risk Uncover hidden correlations between different indicators Create models to price futures, options and stocks Optimise portfolio performance

Industry Solution




Fierce competition, sharp decline in margins and profitability, tighter regulatory and disclosure norms and the need for robust risk management and early warning systems have compelled organisations to look at data warehousing and business intelligence solutions to manage their businesses more efficiently and effectively.

What Can Business Intelligence Do for You?

Companies use data warehousing solutions normally for profitability analysis and to enhance their risk management capability. They use customer relationship management (CRM) solutions to enhance their ability to manage and grow their customer base in the most desired manner. In the Indian context, most banks have already implemented or are in the process of implementing an enterprise-wide core system to facilitate processing of transactions seamlessly across the enterprise. Many of them have also aggressively implemented a multi-channel delivery capability

The ability to make fast and reliable decisions based on accurate and usable information is essential to all business enterprises. Business intelligence provides the user with a competitive advantage as it supplies timely information about customer relations, markets, suppliers, emerging trends and patterns, thereby delivering the right information to the right person at the right time. In addition to greater profitability, business intelligence provides the following business benefits:



It helps in identifying loyal customers with better ability to sell services that address specific customer needs It allows for differentiation in the eyes of a customer

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PERSPECTIVE







It facilitates better exploitation of changing and widening markets It uses a customer centric approach focused on optimizing the lifetime value of the customer It allows concentration on financial budgeting, cost control, and risk management It looks at new ways to minimise costs, while increasing profitability and shareholder value by effectively managing consumer relationships

services industry effectively track and optimise the performance of the campaign and its components, measure the performance of the campaign in terms of sales benefit and retention benefit, access and track cost per lead, calculate revenue and return on investment, improve lead quality through segmentation, streamline lead generation and sharing, track the status and outcome of referrals in sales pipeline, compare status of in- progress referrals over multiple time periods, explore the possibility of a new product or service in a particular market segment

Customer Analytics Operational Analytics







Customer Segmentation Analysis Customer Loyalty Analysis Customer Credit Scoring Customer Life Time Value Customer Churn Analysis "Recency", Frequency and Monetary Analysis

Customer analytics helps the company acquire ideal customers, maximize customer value, determine and retain profitable customers, identify ideal customers for crossselling techniques, manage risks, identify the time of the year when customers get raises or bonuses so that financial schemes like bonds and term deposits can be timed better.








Call Centre Operator Scorecard - number of questions actually asked as against standard number of questions to be asked Lead Activity Exception Report Leads Delivered Report

Operational analytics prevents crucial data from getting lost by loading it in the data warehouse using an ETL tool. Also, the reliable data reports along with their graphical format, aid in effective presentation, analysis and corrective action by the management. The deployment of such reports results in considerable time saving.

Marketing Analytics Performance Analytics







Product Preference Study Attribute Preference Mapping Market Segment Analysis Target Market Identification Market Basket Analysis Campaign Performance Management - Leads analysis, Sales and Retention Benefit Analysis, Product wise break-down of Sales and Retention








Number of loan accounts Average loan amount per branch Loan to deposits percent Current recovery rate percent per branch Non-performing assets percent

Performance analytics results in better loan management, interest income management and credit risk management.

Marketing analytics can help the banking and financial

About the Author

Sanjay Mehta CEO, MAIA Intelligence Sanjay leads a team of technocrats with a vision to change paradigm in the business intelligence (BI) space and make it available to the masses. Sanjay has 14 years of experience in the software product business. Sanjay, who holds a Bachelor of Engineering Degree in Electronics from Mumbai University, is a Microsoft Certified Professional and ISB Alumni.

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Loan management results from taking into cognisance of various aspects such as the average loan amount per branch, the type of loan taken the most, the customer segment that defaults the most, the current recovery rate, annual loan-loss record, average outstanding amount per customer or account, total non-performing assets, loans that have defaulted the most, the share of non-performing assets per branch, etc. Interest Income management accounts for aspects such as interest income generated through loan accounts, interest income generated through inter-bank loans, branches earning the highest interest income, high income customer segments, etc. Credit Risk management looks into the loans of various types that are approved by different branches, the reasons for which loans are rejected, percentage of delinquent loans, distribution of delinquent accounts by buckets, and percentage of delinquent accounts written-off.

SOLUTION SPOTLIGHT

1KEY Agile BI Suite A business intelligence solution from Agile FT

A successful BI tool must provide a highly interactive interface, flexibility and intuitive reporting that facilitates decision making. In addition, users must be able to access any or multiple enterprise data sources.

1KEY Agile BI Suite is a comprehensive Business Intelligence (BI) application catering to the strategic, tactical and operational levels of data analysis and reporting needs of multiple vertical industries. It is a single layer, interoperable, ground-up built, end-to-end BI product. An integrated offering with modules to pick and choose from, it enables organisations to deploy the BI framework with minimal investment. Features







Scalable and adaptive SOA Dashboards and visually stunning reports Dynamic Expression and Query Builder for ad hoc reports Connects to multiple applications and multiple databases Performance to handle silos of data Intuitive and friendly user interface

The BI framework may be implemented through the use of one or more of the following modules: Online Analytical Processing 1KEY Agile Online Analytical Processing (OLAP) transforms raw data to reflect the real dimensionality of the enterprise as understood by the user, and gives remarkable performance on the ever growing size of the databases. It connects to and synchronises with multiple raw databases and creates an OLAP database in a user desired flavour. It is akin to having a middleware engine, where the data can be

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SOLUTION SPOTLIGHT

restructured and cleansed, allowing the users to create their own OLAP Data-Warehouse with ETL Process. The advantages of OLAP include:







Calculations and modelling applied across dimensions, through hierarchies and/or across elements Trend analysis over sequential time periods Slicing subsets for on-screen viewing Drill-down to deeper levels of consolidation Reach-through to underlying detail data Rotation to new dimensional comparisons in the viewing area

1KEY Agile TREE The solution has an intuitive visual data representation of OLAP and raw data in a hierarchical tree based drill down expandable structure. 1KEY Agile TREE is used to drill down into a number and see the relative importance of each of its constituent parts. While drilling down into any dimension at any node in the tree, the OLAP client ranks the next level of detail from left to right by value and percentage of the total. Hence, the user can readily grasp the relative importance of any group of products, sales regions, customers, or any other dimension of the cube. The advantages of 1KEY Agile TREE are:




It allows users to read OLAP models, SSAS cubes, query-based OLAPs. It is built on the concept of on-demand load which increases performance. It allows users to do further filters, displaying the results in charts, setting other aggregates like percentage and min/max counts, and also export and email. Users can save their own layouts or what they drill from any other model.

1KEY Agile CUBE The solution is a comprehensive data analysis, data mining, and multi-dimensional visual reporting solution. It is a powerful tool conceived to help business users understand their data, compare and contrast scenarios, and deliver this information inside and outside of their organisation. The module has the "rapid-in" memory cube which represents raw data for multi dimensional analysis. With 1KEY Agile CUBE, the user can visualise multiple charts within cubes based on selected data. Users can drill down into raw data in any manner they require using the easy-to-understand pivot table functionality like in Excel, and instantly render the desired output. The advantages include:








The powerful data architecture allows the customer to slice and dice information efficiently and provide for an extremely intuitive experience. Regardless of the perspective, data can be rendered to answer business questions - and it allows business users to focus on business rules rather than creating dozens of reports. It has numerous runtime customisation options that help users to create on-the-fly reports and layouts with various permutations of dimensions for runtime analysis.

1KEY Agile VIEW This module provides users the flexibility of analysing data and creating complex reports of great business value. It has been engineered to fully address the BI needs and reporting requirements of an organisation. The advantages of this module include provision of two-dimensional tables for runtime analysis, grouping and column customizations with parent-child relationships, drill down and drill back functionalities. 1KEY Agile CHART 1KEY Agile CHART is a graphical representation and visual report which represents business performance through meaningful diagrams. It helps drive organisational achievements by giving information in a consolidated and easy to understand manner. Its advantages include:








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Capability to filter and change the chart type (column, bar, line, pie, dial gauges, speedometers, heat maps and many more data visualisation methods) on run time to derive more value from data available directly from the graphic representations. Customer segmentation, forecasting and trend analysis are all made easy for proactively managing and monitoring business processes. Run-time user definable drill down and drill back functionality.

SOLUTION SPOTLIGHT

1KEY Agile Key Performance Indicator (KPI)


KPIs are high-level snapshots of a business or organisation based on specific pre-defined measures. Typically a combination of reports is needed to correctly depict and measure KPIs. The reports may include global or regional sales figures, personnel statistics, real-time market information, or anything else that is deemed critical to an organisation's success. In developing KPIs, a user or developer defines target performance levels and then decides the best way to represent variance from that target. Business users are empowered to set the KPI values on their own without depending on the IT team. The advantages of this module include:









Visualisation of key performance data effectively with graphical pointers Convey performance results quickly with visuals Monitor red zones and define threshold levels to set indicators and trigger alert deliveries Link individual KPIs to corporate goals Allow goals to be observed with the help of different warning metrics which switch on as defined, and give the user a quick view of how well or how poorly each goal is met. Give business executives a high-level, real time view of the health of a company by visually displaying vital statistical information about the company.

1KEY Agile DASHBOARD

1KEY Agile REPORTER 1KEY Agile REPORTER is a client-side application that builds reports based on query model. Using a simplified interface, one can link multiple queries and create ondemand reports. 1KEY Agile REPORTER is a generic report writer for designing compliance reports, pre- printed forms, vouchers for printing and viewing. The advantages include:

CIOs are able to deploy an enterprise-wide, secure dynamic reporting platform in as less as 6 weeks irrespective of the database setup of the existing core application.

This module gives a single window view of all types of numbers, facts and figures in multiple ways, and provides for multi-data presentation. Users can define their own Dashboards with a combination of multiple reports on one single screen. The advantages of this module include:













The dashboards, which are lightweight extensions, would access only the required portions of data and be rapidly built. The value is high as data can be disseminated quickly to a large number of employees and thus eliminates the need for labour intensive data gathering workflows.

1KEY Agile TICKER 1KEY TICKER is an enterprise alternative to Yahoo Widgets, Google Gadgets, Vista Sidebar, Apple Dashboard. What makes it stand out is that it is part of a BI reporting solution with presentation layers which are similar to consumer applications. This module is meant to beam commercial enterprise data (which could be across multiple enterprise data sources) to all authorized users. The advantages include:


It is a handy application which can bring life to the desktop and change the way users work with reporting data. It does not affect the desktop's performance or

jeopardise the commercial data in any way. It authenticates the user with a 1KEY Agile server with all permission rights and then beams role-based data in a scheduled manner.







Developers can drag and drop fields to arrange data fields on a page intuitively. It gives freedom to create a range of simple to complex reports. The intuitive reporting integrated development environment allows the developer to do multiple event formatting, runtime scripting for each cell with J#, C# and VB.net. It has formula and function editors which can be embedded with reports and enhanced formula builders having VB Functions, as well as Financial, Math, Conversional, String and Aggregate with advanced conditions and multiple operators

1KEY Agile QUERY EXPERT This module has a dynamic query engine with expression builders and model creators. It provides the facility of using a simple graphical interface to build SQL statements and create views in a database. The module has graphical panes that display the SQL statements visually and a text pane that displays the text of the SQL statements. One can work in either the graphical or the text panes.

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SOLUTION SPOTLIGHT

1KEY Agile SCHEDULER 1KEY Agile SCHEDULER enables users to schedule their reports as per the recurrence pattern in a variety of formats like PDF, TXT, XLS, HTML, MHT and RTF to be stored on a hard disk or emailed to respective business users, or to Share Point. This module automates the complete process of reporting and avoids the cumbersome work of manually creating and delivering reports to respective business users on a periodic basis. 1KEY Agile FILE READER 1KEY Agile FILE READER is a utility that imports data from Text Files, Excel Files and stores it into 1KEY Agile CUBE or 1KEY Agile VIEW for direct reporting and analytics. The advantages of this module include:
Users can choose single and multiple files and sheets at one instance.
Users can select data range on their own.
Users can select data columns in the required format for analysis.
Users can save layouts and use the same whenever required. 1KEY Agile CONSOLE 1KEY Agile CONSOLE is a powerful enterprise administrative security system for managing the application with user rights, authentication, log writing, backups and permissions. It has modules like My Desk, All Managers, User Roles and Report Rights, SMTP settings, Control centre.

The solution has a comprehensive data analysis, data mining, and multidimensional visual reporting solution. It is a powerful tool conceived to help business users understand their data, compare and contrast scenarios, and deliver this information inside and outside of their organisation. 18

This module has active directory integration for single sign-on. It also has service oriented architecture with web services and offers integration with third party services. It connects to multiple servers through OLEDB, ODBC, MAIA OLAP, SSAS, SAP and XML. 1KEY Agile User Hierarchy, Role Based Security 1KEY Agile User Hierarchy, Role Based Security is provided in 1KEY Agile. The access control over complete business information is well mapped as per the employee hierarchy of the organisation. The information displayed as a part of reports is trimmed as per the user logged into the system. 1KEY Agile provides full end-to-end control of sharing and display of business information.






Parametric Control: 1KEY Agile uses "parametric control" for controlling access to business information which is available to users for their reporting needs. Parameters are mapped to the user hierarchy of the organisation and this governs the access to the relevant data. Parameter Mapping: The parameters defined in the system are mapped to each field based on the User Hierarchy maintained in the organisation. Access Control for Business Information: Information displayed will be based on the parameter considered and mapped to the Role based - User Hierarchy of the organisation.

With 1KEY Agile BI Suite's client as well as web interface, CIOs are able to deploy an enterprise-wide, secure dynamic reporting platform in less than 6 weeks. Irrespective of the database setup of the existing core application, the solution can assist organisations in creating a single reporting structure in a heterogeneous database environment. Large enterprises are already reaping the business benefits from 1KEY Agile deployment.

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Views expressed in this publication do not necessarily represent the views of Agile FT and the information contained herein is only a brief synopsis of the issues discussed herein. Agile FT makes no representation as regards the accuracy and completeness of the information contained herein and the same should not be construed as legal, business or technology advice. Agile FT, the authors and publishers, shall not be responsible for any loss or damage caused to any person on account of errors or omissions.