Business/IT Alignment in Corporate BankingService Oriented Architecture (SOA) Business process management (BPM)

Gherda StephensNovember 2010

TOP IT SPENDING PRIORITIES

Recent research from CIO and IDG Research Services shows that companies across industries have put customer experience technologies at the top of their priority lists, and many companies say they plan to spend on these technologies in the next 12 months

Exhibit 1

BUSINESS-CRITICAL DECISIONS

Recent survey by IDC Financial Insights noted that the sentiment among clients is that digital services are very important in keeping them as clients (>80%)

Exhibit 2:

“Banking is an IT game – everything is around

IT Management competence and IT

capability.”

Australian bank GM The combination of SOA and BPM is the transformational technology platform of the decade”

Belgian bank CIO

• At the heart of Business/IT alignment is the ability of IT applications to support business strategy through business processes

• Connecting current available application technologies to the existing bank's legacy systems and to clients’ and/or partners’ systems must be a fundamental part of any bank’s business strategy

• This is a recommendation to investigate SOA and BPM as a possible solution to address the above

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SOA and BPM to ensure Business/IT alignment in Corporate Banking

1. Difficult to predict with accuracy when an application or case will be completed and how much effort / cost required

2. Current process dependent on experienced people3. Hard to gather metrics on current performance4. 80% of workload runs across 20% of department5. Inconsistent approaches across different departments6. No interdepartmental visibility of case work7. Limited SLAs in existence and are largely unclear8. No defined escalation paths9. Systems are not integrated, have to manually transfer data

COMMON FINDINGS FROM ANALYZING THE ‘AS-IS’ PROCESS

THE REQUIREMENTS GAP SYNDROME

Horisontal Maps of the Corporate Coverage Landscape

“How we do business”

(Our Business Strategy

&Operating Model)

Who is accountable?

(For each of the end-to-end Business

Processes)

What Support do we require? (Business/IT Alignment)

How we do Business

New Business Origination/Deal Team Concept

Existing Client Relationship Management/ Client-Centric

Approach

Who is accountability

What Support do we requireBusiness Process Owner for each

end-to-end process

Business Process Steering

Committees for ongoing

management

Business/IT alignment

Product Management Office (PMO)

1. SOA is an approach to integrate IT resources to enable leveraging of existing assets, while at the same time building an infrastructure that can respond to new and emerging business challenges and deliver new dynamic applications in a highly flexible manner

2. When it comes to information visibility and assurance, business process management (BPM) protocols allow both the IT and business sides to properly monitor bank transactions...

3. The combination of SOA and BPM is becoming the transformational technology platform of the decade

IT APPLICATIONS TO SUPPORT BUSINESS STRATEGY

1. Connect & inter-operate various legacy systems giving Bankers access to an enormous amount of data

2. Technology to help Bankers devise strategies and technology solutions around the business-critical issue of client engagement

3. Localising and rectifying problems, rapidly, by having both a holistic view of the process, and knowledge of what's happening in the process at each step

THE OPPORTUNITIES

Fee database

Data Services

ESB: Routes to appropriate core system

DDA / Current Account

Internet Banking

Business Process: Stop Payment

Process Services

Orchestration:Business Logic: If Customer_Status = Gold Service_Fee = $8 else Service_Fee = $20

Secu

rity:

Aut

henti

cate

use

r

Regi

stry

and

Rep

osito

ry: F

ind

Stop

Pa

ymen

t Ser

vice

, Cha

rge

Fee

serv

ice

Man

age

and

mon

itor

Banking Examples of SOA

Example of BPM: Open New Checking Account

• Features of Human BPM:– It involves human interaction (such as scanning KYC

information)– It uses external processes such as Chex System.– It can be used to standardize business processes

and reduce operational risk.

Human Business Process Management (BPM)

Scan KYC Information

Run ChexSystemExisting

Customer?No

Yes

Result

OK?

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THE OPPORTUNITY• Improve the efficiency with which we do business by breaking down the barriers between

systems and applications• The key is a connected network of support systems, both across the organisation and across its

stakeholders

THE PROBLEM• Incompatible IT systems necessitate manual interventions across system boundaries, resulting in

redundancy and errors• The need to provide client-centric services across multiple products and channels whilst having to

meet an increasingly complex web of compliance & regulatory needs

THE SOLUTION• SOA is an approach to integrating IT resources to enable leveraging of existing assets, while at

the same time building an infrastructure that can respond to new and emerging business challenges and deliver new dynamic applications in a highly flexible manner

THE RESULT• Microsoft and other service providers (next pages) have SOA offering that provides developers,

architects and IT professionals with the tools, technologies, framework and guidance for building and maintaining SOA solutions

• Provides business users with personal productivity software that increase productivity and optimising business processes

Service Oriented Architecture (SOA)

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THE OPPORTUNITY• Reduce the risk of increased communication errors by eliminating highly fragmented

processes that require multiple handoffs• Improving processes across BU boundaries can contribute enormously to efficiency

THE PROBLEM• bank's Legacy systems that neither interoperate nor connect• Internal line of business applications not integrated with client service systems• Localising and rectifying problems—rapidly—is extremely difficult to do without both a holistic

view of the process, and knowledge of what's happening in the process at each step

THE SOLUTION• Business process management (BPM) can help financial services organisations obtain the

needed visibility into their business processes.

THE RESULT• Provides a graphical modelling environment• Enables prototyping and simulation• Automates the processes at runtime, plugging into existing IT systems (CRM, DMS etc.) and

providing work-queues for staff

Business process management (BPM)

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BUSINESS PROCESS MANAGEMENT (BPM) PLATFORMS IN FINANCIAL SERVICES

Real business projects are being deliveredon BPM platforms today. They include trademanagement, client reporting and theprocess of bringing new business on board.Who are the firms doing these projects, andwhat are they actually achieving?DERMOT MCCAULEY

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Singularity’s Business Process Management Platform

At runtime, the system drives work among teams, supporting complex routing and synchronizing manual activities

At the simplest level, tasks can be allocated to groups as well as individuals enabling a team to work on completion of a set of activities

Adobe’s Business Process Management Platform

• Rapid development environment• Automated document generation•Service-oriented architecture • XML-based data exchange • Digital signatures • Certified documents • PDF forms • Rules-driven engine • BAM

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Microsoft’s Business Process Management Platform

• Allows businesses to expose its existing information assets as reusable services

• These services can then be used to compose business transactions that

connect with these services and aggregate into higher level business processes, and to compose user interactions that can be delivered to clients and consumed using their experience channel of choice

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GEF’s eXtreme Transaction Processing (XTP) Platform

• GEF delivers a rich development framework that may be used to develop rich applications within a SOA Engineering paradigm

• Logging and tracingDistributed Messaging

• Business Process Flow Definition

• Business Process Execution

• Management Deployment

• Service Containment

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• For financial institutions, finding ways to get more mileage out of core applications,

• The leverage-and-extend entry point helps financial institutions build flexible architectures and create new applications or services from existing code or from scratch by taking advantage of industry models or using a service-oriented architecture (SOA) approach.

• Using industry models and/or SOA can accelerate deployment of new services, processes and user interfaces.

• Using an SOA enables financial institutions to create independent services that can be used across platforms.

• The IBM Rational offering helps enable your teams to accelerate your modelling, architect and assemble new business processes from existing services, and rapidly build modern Web2.0 interfaces.

• The IBM Rational offering for leveraging and extending applications can also help reduce costs on application development and delivery time.

Create new applications from scratch or through reuse

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Client

CCG

Automated Client On-boarding

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THE OPPORTUNITY• 75% of the total cross-sales that banks obtain from their clients occur in the first

three months• Potential to capture 90% of transactional banking wallet and 80% of investments

THE PROBLEM• Client’s first impressions of their bank are shaped by the account opening process• The process is manual and paper-intensive, making it difficult to focus on client

acquisition, cross-sell and retention.

THE SOLUTION• Automation of the on-boarding process (i.e. Singularity’s Account Opening

Accelerator)• Combines an easy-to-use interface for Bankers with a state-of-the-art process

integration engine that weaves the workflow through the various back-office systems• The Accelerator drives a fast, structured account opening process

THE RESULT• 80% reduction in client on-boarding cycle time• 40% increase in throughput capacity• 90% reduction in client acquisition costs• 50% reduction in failed transactions• 50% reduction in management overhead

Automated Client On-boarding

Automated Account Opening

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Case Management Connecting Systems,People and Processes

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Five Essentials of the Case Management Platform

1. Goal ManagementUse CIB Goals to drive the Case

2. Empowerment of Case Participants• “extreme collaboration” by all• “active case management” for all

3. Adaptability in Case Execution• Cases “emerge” over time• Cases “change” unpredictably• “Jump back” or “Step forward” or “Re-do”

4. Effective Availability of Information• Data, documents, artefacts, etc• Rapid orchestration of technologies• Context-sensitive presentation• Security-sensitive presentation• Record retention & destruction

5. Enabling Continuous Improvement• All participants contribute to re-design• Built-in support for modeling, simulation, etc• Mine case histories for improvement ideas

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Singularity is a leading provider of business process management solutions to the global financial services industry. From offices in London, New York, Singapore, Ireland and India, they implement measurable improvements in process performance for leading financial institutions including JPMorgan, BNPParibas, Morgan Stanley, INVESCO, M&G and UBS.

5th Floor, 101 MoorgateLondon EC2M 6SLUnited KingdomEMAIL: london@singularitylive.com

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Rapid Solution Development

THE OPPORTUNITY• Development of client-centric solutions ahead of the competition

THE PROBLEM• IT department under pressure to produce robust, working solutions in aggressive

timeframes• The accelerating pace of business change drives a corresponding requirement for rapid

turn around of IT change requests and the implementation of new solutions

THE SOLUTION• Business Process Management (BPM) technology that automates the tedious and routine

elements of coding (i.e. Singularity’s BPM platform)*• Using Singularity’s integrated development environment, IT developers work with Corporate

Clients to rapidly prototype a solution and then deliver a working system in dramatically reduced timeframes

• Auto-generates user interfaces, system integration and data integration code, enabling building of a working prototype within hours

THE RESULT• Reduces solution development times by up to 80% while keeping solutions aligned to

client requirements• Facilitates ongoing changes to deployed solutions

www.singularity.co.uk

Christine Barry – Research Director, Aite GroupLaurie McCulley – Managing Director, Treasury StrategiesRhys Jones – Chief Innovation Officer, FundtechModerated by Rebecca Sausner – Editor-in-Chief, Bank Technology News

How will your bank respond to the demand for mobile corporate banking? Aite Group research shows that 65% of treasury professionals are interested in these services, and almost half are willing to pay extra for them. With the meteoric growth of tablet computers like the iPad, treasury professionals will be demanding mobile services that will provide them with up-to-the-minute bank data, enable them to take actions like approve payments anytime anywhere, and receive alerts when accounts reach defined thresholds.

Our panel of experts will help you understand the market, build a strategy, and get in the game. Christine Barry will explain the state of the market and present her research entitled “The Business Case for Offering Corporate Mobile Banking Services”. Laurie McCully will explain the treasury professional’s point-of-view focusing on their top needs and expected benefits. Rhys Jones will provide an overview of Fundtech’s new mobile corporate banking platform Mobile ACCESSplus

Mobile Corporate Banking – Get In the Game

Adobe LiveCycle Mobile ES2LiveCycle Mobile ES2 allows organizations to extend LiveCycle workflows to mobile devices including task approvals, content management, and data capture