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5 ways business intelligence software can benefit banks

The adaptability of Business Intelligence (BI) in banking has been evident over the years. Many banks, across the world have welcomed this technology with open hands. It has helped organizations gather in-depth understanding of their business, sales forecast and future growth. It also enables them to become more efficient by identifying areas of cutting costs, new business prospects and more.

business intelligence software

Image Source : Qubole

Here is why banks’ must consider BI and analytics:

  • Business Intelligence tools answers the WHAT e.g. What really happened?
  • Analytics answers the WHY e.g. Why something happened?

The answers to ‘what’ and ‘why’ combined together are used to get insights on existing and upcoming problems or probable business opportunities. Cited under are 5 ways how BI and analytics makes banking worth it.

  1. Regulatory compliance: The Indian banking sector has undergone numerous reforms in the past few years. With acts like National Company Law Tribunal, Insolvency and Bankruptcy Code 2016 and practices like KYC norms in place, banks must keep themselves upfront in abiding by these regulations. A well-implemented BI application enables banks to comply with the guidelines and still perform key functions of collecting, organising and analysing data for generating reports.
  1. Performance measurement and budgeting: BI and analytics helps banks measure business performance in various areas including employee performance. Accordingly, they can allocate budgets and set new goals. Real-time business intelligence also monitors the progress towards achievement of set targets. The performance data can further be used in strategizing new products that are best-suited to customer demands.
  1. Risk management: Banking industry in high on risk. With every investment made or loan provided, there is a risk of losing or recovering the money. BI reporting tools aids in getting insights on the customers, transactions and other key areas so as to mitigate risks. Banks can generate detailed reports on NPAs, reason for default, recovery of loans etc. to plan out new strategies for managing them. BI ensures transparency across the processes, thereby preventing frauds.
  1. Fraud management: The number of frauds realised in financial and banking sector are the highest as compared to all other industries. Banks need to be skilled in dealing with fraudulent and criminal activities, alongside adhering to the compliance issues. BI solutions helps with fraud detection in banking using a few or most of these techniques – reporting, descriptive analysis, predictive analysis and prescriptive analysis.
  1. Customer analytics: In an effort to retain customers, banks and credit unions constantly strive to offer the best of services, ones that are specific to their demands – e.g. giving best deals, waiving off a fee or delivering a special treatment. Business intelligence techniques assist in figuring out the right actions, at the right time, by analysing factors like associated costs, feasibility etc.

Do you want to understand more about how BI solutions gather and produce relevant information that supports financial institutions in making critical business decisions? Talk to our experts today.

Sesame’s BI banking solution follows a pragmatic approach to derive answers to all sorts of problems. It helps bankers control their expenditures such that it is directly proportional to the expected growth. Unfold Beacon Ace’s complete range of benefits through a FREE demo. Enrol now!

Digital Innovation in Banking: Is it just the beginning?

Innovations in technology are transforming the way banking and financial services are offered to customers. Financial institutions have been successful in innovating almost all areas of banking – wholesale and retail banking, payment systems, loan and fund management, mortgages and securities, compliance, risk management etc.

Computerization, which may be considered as a baby step to the banking revolution, has already been made available to 70% of the branches in banks. Central Vigilance Commission (CVC) has been taking measures to increase this percentage to 100% and has shared directives to banks for achieving this target.

computerization-in-banks

Banking has been witnessing many digital transformations lately, in view of the shift in consumer demands. New technologies to offer credit and non-credit services to customers are being introduced in order to cope up with the cut-throat competition between public and private sector banks. The modern technology has helped speed up operations and add to the degree of sophistication. In other words, innovation has turned banks into financial supermarkets where all banking features are available at a single place.

But, the best of digital banking is yet to come

The digital banking journey so far has been about adding technology-enabled services that provide convenience to customers and gives them a valued banking experience. Some of the most popular examples we encounter everyday are mobile banking apps, digital wallets, debit/credit cards etc.

Here’s a story on how the trend of increased use of banking apps was exploited by one of the institutions in US to drive innovation…

Mobile banking and personal finance management apps are being received by many new consumers as the download rate soars to almost 60% (A.T. Kearney and Efma global retail banking study). Considering the rising stats, USAA (a banking and insurance provider based at USA) launched a feature in their mobile app that acts like a virtual mobile assistant and comprehends voice commands of users to perform actions – similar to Apple’s SIRI. Using this first-ever feature, customers could perform over 200 actions to bank on their smartphones. NOW, that’s true innovation – really!

Inventions like artificial intelligence, social investments and advisory through video/chat are still in a nascent stage, however they come with a promise to offer beyond the ‘thinkable’.

Banks have already started announcing their association with tech giants to explore the disruptive future in banking. Citigroup has joined hands with IBM’s Watson – a robot that got popularized on a quiz show named Jeopardy and is known to defeat humans in extending advisory to customers. Video advisory has commercialised hugely among the US, Benelux and Nordic audiences. Yet, it is far from benefitting Indian audience and the like.

Enhancements to the already existing banking products and services have just begun. The next generation will bring highly complex offerings that are based on insights accumulated from across channels like smartphones, apps, social networks and more.

According to a survey by A.T. Kearney and Efma global retail banking study, most of the banks believed they need improvement in their products and services through innovative value-added services.

innovative value-added services

An example of how Sesame serviced Thenhipalam Co-operative Rural Bank Limited after the announcement of demonetization is worth sharing. Sesame built an innovative banking solution called e-village to serve the rural population in Kerela, which was left unbanked after 500 and 1000 rupee denominations were scrapped overnight in late 2016. E-village served as an alternative to debit/credit cards, cash and m-wallets, which could transfer money to individuals/vendors with or without internet and smartphones, directly from the user’s bank accounts. Thenhipalam used this solution by the name of COOpaisa that propagated within no time and was used by a majority of the bank’s customers.

The Digital Banking readiness index denotes that India is still working on fundamentals. This means, there’s a BIG world yet to be discovered.

So far, the game of innovation in digital banking have been limited to small initiatives – mobile banking, internet banking etc. However, the banking industry will remodel itself within no time and will open larger opportunities to delight the customers. Innovations in omni-channel experience, vertical integration of platforms and processes, big data etc. will revolutionize banking. Of course, the customer expectations and competitive market will remain the driving force to all the developments in the journey of “digital innovation”.

Top 5 reasons why real-time banking is the key

The banking landscape is undergoing a transitional phase since past few years. Consequently, they have been facing infrastructural, compliance, competitive and economic challenges. One of the ‘buzz’ words in the banking and finance industry today is “real-time banking”.

real-time banking

Financial institutions have been constantly looking out for solutions that may add to the efficiency but also significantly reduce the costs. A Core Banking Solution (CBS) for real-time banking if adopted to its full potential, can help banks with faster, accurate and convenient processes to manage their operations.

Discussed in this blog are top 5 reasons for banks to upgrade to real-time banking. But, before we proceed, check out these statistics highlighting the popularity of real-time banking, particularly real-time payments, across the globe.

real-time-payment

1. Customer experience

According to a research by DBR Research, it was identified that many financial organisations do not have a customer experience plan. Only 40% of financial institutions agreed to have a formal plan implemented.

financial organisations

Many of us can relate to terms like downtime, maintenance schedules and cut-off times. Such events only hamper the customer experience by limiting the capabilities of technology and banking.

A real-time core banking system keeps consumer preferences on priority and empowers users to avail banking facilities during odd hours, round-the-clock – anytime, anywhere!

2. Integration across channels

As per the recent trends, banks have added multiple channels on which the daily banking operations can be performed. While they are sophisticated and complete in themselves, they can be referred essentially as standalone systems which are structured to execute a set of functionalities.

Real-time banking syncs multiple channels and integrates all standalone applications to give it a centralized view, thereby eliminating confusion.

3. Manage Frauds

Banks have always been concerned about the number of frauds reported with them. The statistics below depict the number of bank frauds and the amount involved in India, in between 2012 to 2014.

banking industry comparison

Real-time methodology provides banks with business intelligence systems that can aggregate transaction patterns of users and detect fraudulent activities as and when they occur.

4. Efficient back-office operations

back-office operations in banks

Many banks use legacy systems, which work on outdated processes that may not integrate with existing methods. Processes involved in staffing, employee benefits, transportation etc. require banks to input a handsome amount of cost and time. Real-time systems can help get rid of manual intervention in back-office processing, thereby minimising errors, reducing the turnaround time and enhancing productivity.

Real-time core banking also frees the systems involved in day-long (or hour-long) batch processes. They can then be utilised for executing processes that are more fruitful to the business.

5. Risks and compliances

The regulatory bodies may introduce new guidelines which must be implemented and practiced instantaneously. Governance and risk compliance becomes a priority when the credit market is tight.

Only a real-time system can offer risk management solutions for all their critical operations for operational, credit and market risk.

Few banks have already started availing the benefits of real-time banking, however, there are many who are yet to advance to this technology. In today’s micro-dynamic environment, banks must consider focusing on every approach that can aid them to secure their stake in the market. This includes taking a substantial step in embracing CBS for real-time banking.

It is the time that banks work together with other financial institutions and non-banks to redefine the current scenario and frame a backbone that revolutionises “banking” for all customers.

BeaconPro, by Sesame is a comprehensive, browser-based and centralized core banking solution that offers full capabilities of real-time banking. To avail its features for FREE, schedule a demo today!

Digital Payments: Here’s everything Banks must know!

2016 – A year that has engraved its name in the history of Indian Economy for note bandi, will be remembered for withdrawing ₹ 500 and ₹ 1000 currency notes. These currencies that constituted 86% of the total value were eliminated overnight on November 8, 2016 when PM Narendra Modi announced the digital and cashless India initiative.

As a result, cashless payments by the end of 2016 increased in tenfold. Indians, particularly from the urban lands, have been adopting various digital payment modes past demonetisation. While online banking and mobile banking have popularised, we also witness non-banking companies offering digital wallets like PayTM, Freecharge, and MobiKwik etc. hitting the opportunity.

digital-payment-methods
Image Source – Trendhunter

With latest technologies available in the market, banks can themselves offer their customers a wide range of cashless banking solutions that are faster and safer. Check out these major reasons why banks need to have their own digital payment methods…

  1. No rural areas should be deprived of the cashless means

In an effort to become a cashless economy, the masses in rural India are often left back. Each day digital India movement is progressing, however, a maximum population still remains far from internet technology and smartphones. While PayTM and the like target urban population who is smartphone-friendly and internet-savvy, banks do bear a larger responsibility to reach-out to those in the not-so-developed areas.

Banks can help both the rural and urban people still go cashless when they don’t have access to internet and smartphones. Cashless banking solutions that work not only through scanning QR codes or online money transfer, but through SMS – this is how banks can empower their valued customers.

Here’s an inspiring video of how Thenhipalam Rural Co-operative Bank of Kerala helped customers and local vendors go cashless after demonetisation through COOPaisa – a one-of-a-kind app to buy, sell and exchange currency with or without smartphones and internet.

  1. No third parties involved

 All digital wallets and payment banks today work on the concept where users load their wallets using their Bank Accounts (i.e. through internet banking, mobile banking and credit/debit cards). This means, the user blocks a certain amount in these wallets and uses this amount only at places where it is eligible. In case the amount is insufficient to carry forward the transaction, the user has to reload his/her wallet. On the other hand if transactions aren’t carried out through the wallet, the amount lies unused, which otherwise could have been availed elsewhere.

Banks, when having their own digital payment modes, can serve their customers better. They eliminate the need to load wallets in third-party applications, saves blocking of money and offers convenience along with security to customers.

no-third-parties-involved
Image Source – Outlook India

Many of the Indian Banks are already using Core Banking Solutions in an effort to simplify their processes, maximize efficiency and ultimately delight the customers. Yet, empowering customers with seamless banking solutions in today’s dynamic payments landscape is also crucial. The rising trend in the global payments industry is indicative that the banks must continually provide new innovations to match up with the changing mandates and regulations in banking sector.

E-village – a premium offering by Sesame India, is a comprehensive cashless banking solution that aids banks in extending digital and cashless services to their customers. To explore the complete solution suite and to schedule a FREE demo, get in touch with us today!

5 most anticipated and emerging Banking Technology trends

 

FinTech

Banking Technology Trends

When we look at how technology is transforming Banks today, we can clearly predict the move towards the greater adoption of the latest innovations.

This is the age of digitization and technology is playing a crucial role in shaping India’s Banking scenario. Looking at the state of technology in India and of the world at large, with the extensive availability of 3G and 4G networks and the spread of smartphones, it is creating newer and enhanced customer expectations, multi-feature product offerings and a greater demand for state of the art FinTech solutions.

Today Banks have much greater onus of welcoming proactive technological transformations. They have to bring in these changes because now they need to make themselves available anytime and anywhere to their customers, to stay alive in this highly competitive market.  What is interesting is the fact that these factors that are influencing banking today are the same factors serving as a basis for all the latest emerging trends.

Let us have a look at the anticipated technology trends we think will be significant in the world of Banking.

FinTech Disruption

We are aware that the Electronic exchanges, and the standardized application systems have driven the transformation of financial value chains. There is no doubt whatsoever in stating that the most significant development recently in the financial industry is none other than “Financial Technology” (FinTech). It comprises a broad range of innovations and advanced business models powered by information technology. FinTech is so phenomenal that it is shaping policies and creating a global-scale trend. The areas where the FinTech disruption will be strongly felt are fund transfers, consumer banking and wealth management. A highly impactful combination of alternative credit models with powerful data analytics will transform innovations in lending.

Distributed ledgers to authenticate IOT devices

Distributed ledgers, more commonly known as Blockchains have already become a major technological innovation. Now, leverage this technology to authenticate IOT devices, we can see a real-time system for value exchange. The exciting part would be that it is almost free. Internet of Things can be the future of distributed ledgers in financial services. Major Banks will lead the way by revising standards to pave way for the transformations. We may see signs of such a change starting thing year. The next five years will prove to be the defining moment for this transformation.

Impact of Big Data Solutions

With banks requiring deeper understanding of customer needs for competitive advantage, they are now betting on analyzing the ever-increasing volumes of data, to get right into their customer’s psyche. They are quite right in doing so. Big Data in banks have the tremendous capability of maximizing the value of their customer data by leveraging big data analytics across the key areas such as marketshare growth, customer retention etc. Lead generation for customer acquisition can be effectively improved. Various analyses help enhance Customer experience, engagement and loyalty, leading to much better sales and profits. However, considering the great things Big Data can offer, Banks are not utilizing its true power, at least not yet. It is high time that Banks start tapping the immense potential of Big Data Analytics. Probably this may be the year for successful big data initiatives that will go on to define the future.

Advanced Security Systems

The major problem with technological advancement is that Banks are now forced to fend off more number of advanced and complicated security threats. There is an unprecedented number of data breaches and an increased risk of cyber threats. With an increase in digitization, multi-channel proliferation there is greater risk of cyber-attacks that can translate into frauds and ultimately loss of customer’s trust. Realizing how crucial the situation is, Banks are stepping up the security. We now see more banks using biometrics and tokenization for banking activities. With digital channels slowly becoming the most preferred choice of customers for Banking services we will see increased security measures such as multilayered authentications. Going forward, we will see more banks adopting secure access methods without compromising customer convenience.

Financial Inclusion through Business Correspondent Solution

Rapid increase in the number of smart phones and decreased cost of electronic hardware such as Point of Transaction (POT) machines, have made offering financial services to the poor a much easier task these days. Business Correspondent Model is a modern, innovative banking approach that helps to service the financial needs of the unbanked sectors leveraging the latest technology devices.

Financial Inclusion Business Correspondent (FIBC) Solutions extend banking practices of the premises embedded on next -gen gadgets like tablets and smart phones. These solutions offer all the necessary BC Model features for helping people meet their financial needs and strengthen bank’s business. The solution facilitates technologies like Micro ATMs that allow customers to perform the basic financial transactions by using customer’s ATM card or thumb reading (Biometric). Seamlessly integrating the Card-Swiping machines to a Tablet at any location with connectivity, now FIBC solutions can provide easy to use technology to any individual.

Since Banks are now shifting their focus to improve Financial Inclusion, for customer engagement and to grow their business, a low cost, technology based, innovative service delivery mechanism such as FIBC looks increasingly viable. We might see more Banks adopting this model so that they can offer lower-cost structures by leveraging digital technologies.

Let us sum up our predictions for the year 2016: Banks are expected to create greater room for digital innovations to rise above heavy competition. They will have to accept the FinTech Disruptions by adopting them smoothly and seamlessly, and they may even have to start looking for partnering with FinTech firms.  Though IOT and Blockchains together looks new and untested, you never know what is in store, let us wait and see.  With Financial Inclusion gaining limelight in government agendas, Banks may start looking for low cost technology based options to service the underserved and even make a considerable profit.  Finally, banks will have to step up their game to offer enhanced security to protect and distance themselves from cyber-attacks and yet continue providing better customer experience.

 

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