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Business Process Transformation in Banks

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Business Process Transformation in Banks

2BPM as an Essential Technology in BankingBusinesses are realising that there is no one way to support enterprise architecture. Regardless of the approach, it must facilitate change. The key is to create, not the perfect or elegant architecture for the moment, but the most adaptable architecture for the future.Julie Short, Research Director, Gartner

Newgen Overview- Company Snapshot1100+ installations1 of 3 vendors to feature in Gartner MQs for iBPMS, ECM & CCM58+ Countries200+ Partners1600+ Employees150+ Banking Customers Globally40+PatentsWorlds largest DMS deployment with 9 Billion docs processedExcellent rating for Case Management - Gartner

InvestorsOfficesSingaporeUSA Florida Washington DCCanadaUKUAEIndiaNew DelhiMumbaiChennaiBangalore

Industry Recognition2012 Impact Report2013 ECM Wave2011 Wave report for DOCCM2013 Global Software Leaders Report2011 Market Share Report

2014 Critical Case Management Capabilities2013 CCM MQ, IBPMS MQ 2013,2012, 2011,2010,2009 ECM MQ Report BPMS Market Update Report, 2010 BPM MQ2011 Retail Loan Origination Vendor Landscape ReportGood Condition and Low RiskFlexible and cost effectiveEmerging markets top 100 software vendorsNo 1 in India Content Management MarketTop 3 value for money2011 BPM Decision Matrix

Very Large Installations

Comprehensive Case Management2012 ECM vendor evaluation ReportOur Global Installation BaseAsia

Indonesia ChinaSingapore Hong KongPhilippines IndiaMalaysiaJapanPakistan ThailandEurope

AustriaGermany CyprusLithuania CzechSlovakiaDenmark UKFinland Africa

EgyptNamibiaGhanaNigeriaKenyaSouth AfricaLibya TanzaniaMauritiusThe Americas

USABermudaCaribbeanMexicoOceania

Australia New ZealandMiddle East

BahrainOmanQatar Saudi ArabiaJordan KuwaitUAE

Our Global Customer Relationships Banking & Finance InsuranceBPO & Shared ServicesGovernment

Storage in DMSContent CaptureProcessingReporting & MonitoringCustomer CommunicationArchive

Indexing

Collaborative Process Design

Technology Execution

Real Time DashboardLeading Indicators

Record ClassificationRetention & DispositionPhysical TrackingLong Term PreservationManaged Touch Points

End Customers

Design templatesDesigner

Flat Files SpoolMultiple Application Inputs

ECM & BPM Product Suite

8 Customer Quotes

We found the BPM platform very useful to align our business processes. It will give us a flexibility to amend the business process and improve them further.

"The BPM solution, OmniFlow Suite, from Newgen has enabled us to centralize a large number of our processes, resulting in leaner and efficient branches. Branches have been able to focus on sales while the processing activities are moved to centralized back office in Mumbai. The Turn Around Time (TAT) has been significantly reduced, leading to better customer experience.

"We would like to thank Newgen for being instrumental in customizing and integrating the key initiative of Document Imaging and Management solution in Credit Operations at RAKBANK. This enables the bank to be more effective in handling critical security documentation of loan customers."-

"We chose Newgen over others owing to the company's Document Management and Workflow capabilities.

Customer/ Partner Quotes

"In Newgen, we have explored a partnership with a truly customer focused, young and promising company that is hungry for getting better. Dow Jones and Newgen, have experienced many successes together for workflow automation and control, we expect many more using their BPM tools and Professional Services that have always delivered on time and within budget. Newgen suite of products that I've interacted with has tremendous potential and flexibility to ensure agility and match the speed of business operations Built on IBM Web sphere Application Server Newgens solution is optimized to ease administration in a scalable deployment environment, this core J2EE configuration delivers a secure, high-performance transaction engine for dynamic applicationswith the availability of solution on Red Hat Enterprise Linux, customers are ensured that they are not trapped by the vendors proprietary lock-in but at the same time ensure robustness and scalability. Implementation on Linux platform makes the customer winner all the way by adding stability and low cost of ownershipIBM on Newgens Linux-based Solution, Partnered Solutions Portfolio

"The Newgen BPM solution allows us to closely monitor time frames, while efficiently handling burgeoning growth in number and complexity of customer requests. This has been possible due to the system's close integration with all other insurance applications.

AREAS IN BANKING

A typical scenario of Front and Back office setup in a BankCore BankingAn Approach to Change the FutureEnablers of Change12Creating Milestone all the Way13Banking Domain ExperienceRetailA/c Opening & MaintenanceTerm Deposit ServicesCustomer ServicesCustomer Request MgmtLocker/Custodial ServicesPoS A/c MgmtPayment & SettlementFund TransferRemittance PDC OperationsInterest/Dividend WarrantsInward & Outward ClearingSWIFT VirtualizationLending & MortgageLoan OriginatingLoan UnderwritingLoan ServicingEarly Warning SystemCollection & DisputesLoan Takeover MgmtOrganizationalAudit/OR MgmtContracts MgmtCorporate FinanceVendor ServicesAsset MgmtHR Processes Corporate/ CommercialLC Issuance & AmendmentBills of ExchangeShipment CreditBank GuaranteeCommercial LoansCorp Term Loans/LimitsCredit Card & Third PartyWealth Mgmt & DepositorySecurity TradingCredit Card IssuanceCredit Card ServicingBancassuanceUtility Bill MgmtRetail Banking

ApplicationsDriversA/c Opening & Maintenance Competition for Deposits Revenue Growth Geographic Expansion Diverse customers retention New Customer Acquisition SPOC for customers Increased Service delivery mechanisms - Anytime, Anywhere BankingTerm Deposit ServicesCustomer ServicesCustomer Request MgmtLocker/Custodial ServicesPoS A/c MgmtStatements ArchivalCRM Image Enablementstatements consolidation and distributionATM Statements Processing15Payment and Settlement

ApplicationsDriversFund Transfer SEPA Payments Maintain Earnings Cross - Border Co-ordination Operational Efficiency Loss Mitigation Open Standards

SWIFT VirtualizationForex Cheque ProcessingForeign Inward RemittancesForeign Outward Remittances16Lending and Mortgage

ApplicationsDriversLoan Originating Current Economic Environment Operational Efficiency Risk Management Protection from predatory Lending

Loan UnderwritingLoan ServicingEarly Warning SystemCollection & DisputesLoan Takeover MgmtImage Enablement of LoSLoans Statements ArchivalLoans Statement consolidationReconcilliation ModuleCustomer Query Resolution

17CORPORATE / COMMERCIAL

ApplicationsDriversCheque Clearing Process Fraud Detection for banks with Multi Channels Competitive Threats Changing Consumer Preferences Capital Preservation Improve key performance metrics reporting

Remittance PDC OperationsInterest/Dividend WarrantsInward & Outward ClearingCheque ArchivalCash Management ServiceCheque Collection/Bulk PayOrdersLC Issuance & AmendmentShipment CreditBank GuaranteeCommercial LoansTerm LendingCapturing Documents at the point of saleAdhoc Contracts generationAccounts statements Archival AML on BRE18Solutions Across LOBs in Banking

Small Average Profits per Customer. As such retail banking business requires to be managed well . The cost of acquiring new customers must be kept low. Modern non-branch sales channels are essentialCross-selling of services needs to be high. Selling just one or two basic products is seldom sufficientCredit decisions must be accurate, fast and cheap to take. Credit scoring is the way to meet these requirementsService quality levels need to be satisfactory but costs must be kept low. Too much quality results in lossesTransaction processing must take advantage of economies-of-scale. Centralized processing is advantageousKey Challenges in Retail Banking 20

Large Proportion Customers which are not contributing much to Banks profit or are loss making customers Method to identify such customers based on individual account profitabilityUp-selling to ensure either these customer use services of the bank or leave the bankMoving un profitable debit card customers to credit cardsShifting such customers to alternative channels such as Mobile, Internet and ATMsEnforcing fees commission and charges. Shifting overdraft customers to term loans or credit cardsKey Challenges in Retail Banking 21

Customer On Boarding at Branch

BRANCH OFFICESDocuments Check and Verfication

3Collect Customer Information 1Local Scanning

Central Scanning

Collect KYC Information 4Exception HandlingKYC Rating process6

Account Activation7

Email Notification to customer 8

Disbursing other documents to customer 9

Core Bank Updation 10Central Processing Office

Collect Documents2

Credit Bureau Check5

Verification Agencies60% Reduction in A/c Opening TAT

OmniFlow Suite has resulted in leaner and efficient branches... The Turn Around Time (TAT) has been significantly reduced, leading to better customer experience. Richard Falco, DirectorChallenges: First foray into retail banking worldwideAmbitious customer acquisition targetsLong A/c Opening cycleAnticipating outsourcing for keeping costs downTime-consuming exception handling Tracking Physical Documents as per Central Bank Guidelines

Processes Automated:Account Opening, Maintenance and Closure for Savings Account, Current Account & FDOutward RemittanceStanding Instructions ExecutionTDS Process

Benefits:

Opens 1200 accounts/day through 10 branches

TAT improved from 8 days to 3 days

Better monitoring of Branch Activities

Outsourcing step allows automatic upload of bulk customer data

Masking of signature and mobile nos. for the outsourcing vendor

Exception handling TAT reduced by far

Operational risk mgmt via KYC

Winner of Red Hat Award

Introduction of the integrated outsourcing step in the workflow increased the efficiency of bank employees from 2 account opening transactions per hour to 45 per hour.

23Corporate LendingKey Challenges in Corporate Banking25Corporate and Commercial Credit is key contributor to banks profits and yet Corporate Credit Approval is least technology supported system in the Banks :Paper Intensive Collecting and Managing large data for reviewManual/Excel based Credit and Risk AnalysisManual Creation of Credit Memorandum and manual circulation to decision makers for approvalManual check on adherence to Bank and Central Bank credit policies/complianceNo Method to track TATs and SLAsKey Challenges in Corporate BankingEven after the Credit Sanction..26Manual Management of documentation Manual Management of collateralsManual post disbursement covenant monitoringManual review & renewal Manual records for call reportsManual referral processesIn addition, credit managers also to grapple with :Increased scrutiny by regulatorsAdditional Reporting RequirementsNew Capital Responsibilities26BRANCH OFFICESDocuments Receipt/verification

1Data Entry 2

Blacklist and Dedupe customer Check 3

Local Scanning of Docs.

Evaluation & Document Verification, Property appraisal4Exception HandlingException Handling5

Aggregate Score calculation, Credit history verification, Deviations 6

Contract Preparation &Email Notification to customer 8

Loan booking ,Disbursement/Partial Disbursement, & Authorization9

Arch ival in DMS10Mortgage loan ProcessCentral Processing Office/Risk DeptParallel Processing of cases to reduce TAT and Processing Cost7

27Loans Automation Key BenefitsCore banking is transaction oriented, whereas Workflow Automation is people oriented, where escalations through mail triggers, alarms and monitoring of people can be done in Real timeEnd to End automation of document intensive Loan processes , where users can see documents and data on single screen.Inbuilt loan calculators / Score Cards for automated Credit risk assessment.Automated Identification of fraudulent cases during initiation and archival for future reference.Instant Loan summary template for review and approvals by senior management.Flexibility to change the processes as per Market requirements without any changes in Core application.Automatic routing of the cases to appropriate authority on the basis of applied loan limit.Mandatory document/Process check listing at the time of initiation to reduce the rejections.Extending the reach of the to DSA (Direct Sales Associate) for initiating the Loan approval Real time Monitoring/Escalations for SLA management.28 Abu Dhabi Commercial Bank, UAEBusiness Case Meeting Statutory Requirements

Customer visits the Branch for opening an account or alternatively DSA can approach prospect/customer for account opening.Capturing / Editing customer information and KYC information - account related details, relationship between the new account and customers, operating instructions, account memo and signature cropping.Generating requests for Cheque Books and Smart Debit Cards (SDC) in Core System.Generating handoff file and uploading status for welcome kit to be dispatched by courier company.Integration with Core banking system to push customer information, customer signature and account information Leading bank in Dubai providing retail loan services across 43 branches.2929Abu Dhabi Commercial Bank, UAEDeployment DetailsOracle 9iWindows 2000-Advanced Server150 usersBusiness BenefitsCore system was developed long back and did not have extensibility to capture new information which was necessary for statutory compliances and audits. This information is now captured and managed in BPMIntegration with Core banking and subsystems like SDC SystemAvailability of online images for verification Improved turn-around timeGenerating customer and account related forms in PDF format through the captured informationProcess Implemented Account Opening Account Maintenance Customer Maintenance Term Deposits New and Term Deposit Maintenance Trade Finance Processes LG (Letter of Guarantee) Issuance LG Amendments LG Correspondence LG Closure30Trade Finance Trade Operations Emerging ChallengesWhat is impacting the Trade Operations market

Clients are looking forward to Banks help in streamlining the inefficiencies in supply chain wherever possibleBasel III will fundamentally affect the profitability of the trade business with in crease in capital reserve requirementProductivity between efficient and inefficient trade ops in Banks is as high as 700 percentOpen account transactions now account for more than 80 percent of global trade reducing banks role to simply moving money between trading partners32Trade Operations - Solution Overview

BPM How it works for TF OperationsImport LC IssuanceImport LC Amendment Import LC CancellationImport Bills under CollectionRealization of Import BillsDirect Import BillsAdvance Import BillsShipping Guarantee/ Delivery OrderExport LC AdvisingExport Packing CreditPacking Credit CancellationExport Bill NegotiationExport Bill CollectionExport Collection Bill RealizationAdvance against Collection BillsExport Bills Free of PaymentImport LCExport LCBPM automates all key International Trade Finance processes

BPM - How it Works for TF Operations BPM automates all key International Trade Finance processes

Inward Remittances Export/Other than Export (By MT 103)Outward Remittances Imports / Other than Imports (By FTT (Swift) / FDD)

Inward Foreign GuaranteesOutward Foreign GuaranteesInvocation of Bank GuaranteesBank Guarantees (Domestic) Issue/Amendment/Extension/Cancellation

Forward Contract Sales/Purchase Booking/Utilization/Cancellation

35FORWARD CONTRACTSBANK GUARANTEESREMITTANCESInland L/C Opening/Amendment/CancellationBill Lodgment under Inland L/C - Collection/DiscountingRealization of the BillsInland Bills under CollectionRealization of the sameIntermediary Trade BillsVendor Bill Financing

INLAND TRADE FINANCE

Sample TF Process: Import LC Issuance36Case Study ICICI Bank

ChallengesTo provide high quality customer service to wide spread client base cost efficientlyDifficulties in meeting regulatory and internal compliance in handling trade businessLot of paper intensive work leading to misplacing papers, delays in TAT etc

Processes AutomatedTrade Factory - over 60 processes are liveOverall in bank = 14 processes + 60 processes in Trade factoryEach application has 8 to 12 page and sometimes up to 1200 pages one tradeBenefitsMeeting compliance and following the required guide lineWork tacking and visibilityMajor reduction in TAT responding the customers

Solution featuresOmniflow, Omniscan, OmnidocsTotal number of users - 10000+ named usersCurrent Trade Users - 600, Expected Trade Users > 3500Current Daily Transactions - 400 Expected Daily Transactions - 6000 225 million documents archived including millions of TF documents over 7 years37

Trade Finance Experience - ICICI BankPROCESSES IMPLEMENTEDIMPORTS:Import Bill Realization Under LCImport Bill Lodgement under Collection BillsAdvance Import PaymentsImport Bill Realization under Collection BillsBuyers CreditSuppliers CreditBuyers Direct Import BillsImport LC Issuance Import LC AmendmentImport LC CancellationDirect Import BillsImport Bill Lodgement Under LC

EXPORTS:Export Bills CollectionExpot Bills Against Advance RemittanceExport Bills NegotiationExport Packing CreditOutward Bills (LC / Non LC) Direct DiscountingOutward Bills (LC / Non LC) Direct Discounting - RealizationOutward Bills Under Collection (Non LC) - LodgmentOutward Bills Under Collection (Non LC) - RealizationExport LC AdvisingExport Realization

Trade Finance Experience - ICICI BankPROCESSES IMPLEMENTED

INLAND TRADE FINANCE:Inland LC IssuanceInland LC AmendmentInland Bills Under LC - LodgmentInland Bills Under Collection - LodgmentInland Bills Under Collection - RealizationInland Bills Under LC - RealizationInland LC Advising

REMITTANCES:Outward Remittance LodgmentOutward Remittance - RealizationDD CancellationConversion from EEFC

BANK GUARANTEES:Domestic Bank Guarantee IssuanceDomestic Bank Guarantee AmendmentDomestic Bank Guarantee CancellationShipping Guarantee / Delivery OrderForeign Investment Bank Guarantee IssuanceForeign Bank Guarantee IssuanceForeign Bank Guarantee AmendmentForeign Bank Guarantee Cancellation

39Solution Benefits & Value Addition40Reduction in Turnaround time due to removal of time lags introduced by activities such as communication of shortcomings to customer and preparation of currency sale/purchase report for rate inclusion. Visibility of work to all the stakeholders, transparency of operations and easy tracking helps faster resolution of discrepancy in applications.Improvement of client satisfaction with the banks improved service levels.Real- time view of Key Performance Indicators (KPI) helps the management to align the operations with desired. Flexibility of work allocation enables the efficient use of work force to cope up with work load in peak hours.Agility in process change due to market, product, regulation changesEnable low volume branches for Trade Finance business

Product SuiteSolution Accelerators Not just coded black box42Loan Prospecting and Pre screening Credit Memorandum Document captureData captureUnderwriting & Credit AnalysisScoring & Rating Risk Management,RAROC Collaterals Documentation Disbursement Classified CCMRestructuringReview Renewal Credit monitoring Account conduct CovenantsTODAdhoc approvalCollectionsNPL Management Reports & DashboardsPortfolio MonitoringTAT & SLA.Servicing Modules Release of securities Change in PricingBut developed on framework enabling Bank to configure bank specific requirements Document capture from multiple sourcesFlexibility to change data attributes through Inbuilt Form DesignerProduction scanningMobile approvalsFacility to Configure and Change Business Rules.Real time Configurations as per Market trends. No Programming effortFlexibility to Configure and change Business Processes.Empower Business to control their Process.Real time Process changes as per Market DynamicsReal time Dashboards.Configurable Business Reports through intuitive WizardsBusiness AnalyticsAuto schedules of Reports for Mgmt.Out of Box adaptors for Core AppsIntegration through Web Services and Middle WareSOA for flexible InterfacesDocument capture Configurable DataConfigurable Rules through BRMSDesigning Business Process and WorkflowsBusiness Activity MonitoringSeamless Integration with Existing/Core Apps

Business Insights/KPIs

Operational ReportsBAM/ DASHBOARDS

Retail, SME and Corporate specific processes and workflows can be configured/designed in user friendly Process Modeler 44

Business Rules Management45

Strong Rules management and hierarchy definition for applying these rules

BAM - Visibility, Accountability and ImprovementsFunctional DashboardOperational ReportsInvestigative Dashboard

Integration CapabilitiesEasy Integration with External Systems48

Web Service

WebServices based Integration Messaging Based ServicesEJB Based AdaptorsDMS Archive ConnectorZapIn! New door to success.Customer On Boarding in Field -ZapIn Upload metadata and document images to back office in offline And Capture Application forms and supporting documents . Documents compressed by at least 80%Enter key metadata in the application form on tablet/ Smart phoneEngage with the customer in the field (such as malls) or premisesZapIn can also be used for customer on boarding in the branchAnd save cost of scanners

Check status with external credit bureau online. Check application status at back office online

50

How ZapIn works GPRS/3G/WiFiSecure Data Transfer

Application FormSupporting DocumentsCloud

ZapIn ServerIn-Premise or Cloud

Mobility Support: Customer On boarding

Data & Document CaptureZapIn can also be a great tool for a large BankIn case of branches which are not online or on low bandwidth , ZapIn is a goodalternative. It can also be used effectively in Agent Banking

Will reduce cost of deploying scanners at branchesCan store data and documents in offline mode. The data and documents are uploaded to central server whenever connectivity is established Converts coloured image to black and white like a photocopyUses Adaptive Binarization to ensure best quality legible B&W imagesEnsures Auto orientation in ImagingZapIn application has auto cropping features for photos and signaturesBusiness rules and validations built in application to increase FTR (First time right)ZapIn advanced imaging compresses image to a very small size. For example a image of 600 kb is compressed to 30 kb which can easily travel on low bandwidthApplication supported both on Android and iOS platformsInbuilt strong security featuresProven technology as very large banks in our other implementation are using it very successfully

Why Newgen for Banks54 Entire gamut of Business Process, Product & Tech Consulting First-time right, tailored solution owing to our industry knowledge Fastest implementation cycles in the industry Complete ownership of the deployment India Delivery advantage passed on to you Flexible licensing to suit the enterprise needs Operational integration of distributed branches and Central location Distributed capture of Documents and Bandwidth Optimization Last mile integration, partnership with other core banking players One-stop shop for Worflow and Document Mgmt products Highly focused on leading edge product development Support for mission critical processes across multiple locations 24 x 7, reliable support for your organizationComprehensive Product Range

Domain KnowledgeEnterprise- wide SolutionRapid DeploymentValue for Money

Mission Critical Process SupportThanks