temenos romania march 18, 2003 every time a step ahead
TRANSCRIPT
TEMENOS ROMANIA TEMENOS ROMANIA
March 18, 2003March 18, 2003
Every time a step Every time a step ahead ahead
IntroductionIntroduction
Hilde CorbuHilde CorbuCEO, Temenos RomaniaCEO, Temenos Romania
TEMENOS ROMANIA S.A.TEMENOS ROMANIA S.A. Member of the International Temenos GroupMember of the International Temenos Group Distribution, Implementation, Support and Distribution, Implementation, Support and
Training Center for Temenos banking Training Center for Temenos banking products in Romania and Republic of products in Romania and Republic of MoldaviaMoldavia
2003 2003 key business key business challengeschallenges
1/3 – profitability = 1/3 – profitability = extremely challengingextremely challenging
1/3 – customer 1/3 – customer retention = very retention = very
importantimportant
1/4 – cost reduction = 1/4 – cost reduction = extremely challengingextremely challenging
New Channels to New Channels to market & Time to market & Time to
market = importantmarket = important
20032003The importance of IT investmentThe importance of IT investment
Investment in Investment in CRM: CRM:
45%=Critical; 45%=Critical; 51%=Important51%=Important
Investment in Investment in Back Office: Back Office:
37%=Critical; 37%=Critical; 48%=Important48%=Important
Channel Channel Integration=key Integration=key
growth areagrowth area
3/4 – Branch 3/4 – Branch Renewal = Renewal = ImportantImportant
the impact of the impact of risk risk
management management and business and business process re-process re-
engineering will engineering will be extremely be extremely
significantsignificant
1/3 – New Delivery 1/3 – New Delivery Channels = Channels = Extremely Extremely SignificantSignificant
1/3 – Cost 1/3 – Cost Reduction=SignificReduction=Signific
antant
New product New product development and development and
delivery are delivery are casualties of casualties of
system under-system under-performance for performance for
many banksmany banksKPMG: “63% of KPMG: “63% of
banks will change banks will change their IT system their IT system
within the next 3 within the next 3 years”years”
43% are not satisfied 43% are not satisfied with the way in which with the way in which their system currently their system currently
handles customer handles customer data analysis.data analysis.
2/5 - 2/5 - time to market = a key weakness
1/3 - 1/3 - dissatisfied with the way in which their system
supports them on the development and delivery of
innovative products
2/52/5 - do not feel that they have the systems in place to support
CRM
29% of banks express dissatisfaction with their system in its ability to
integrate with other banks
Characteristics of the Retail Business Characteristics of the Retail Business MarketMarket
Banks in order to attract retail customers, and at the same time be successful in this business, need:
To be competitive in terms or interest rates and charges
To provide service quality
To be innovative in offering new products and services
To find alternative channels to promote and sell retail products in a controlled and secure way.
To manage the relations with their customers in a cost efficient and sales efficient way
To measure their exposure and manage their risks
Manage delinquencies
Control their costs due to the volumes of this business
Modern IT solutions supports the Bank Modern IT solutions supports the Bank to gain competitive advantageto gain competitive advantage
1) Processing (credit scoring)(credit scoring) of the profile of the customer and all his “risk related” data, in order to
define:
The “worthiness” of the customer,
The credit limit the Bank is willing to grant to this customer for all consumer lending related products (i.e. credit cards, consumer loans, mortgages, overdrafts e.t.c.).
The brake down of the credit limit to the several retail lending products,
“ “Personalization” of the product depending on the creditability of the client.
2) Credit Card productsCredit Card products should be supported and ideally allow the customer to be given the possibility to switch between credit card debt (revolving credit line which is normally more expensive) to term loans, which are normally less expensive, and vice versa
Modern IT solutions supports the Bank Modern IT solutions supports the Bank to gain competitive advantageto gain competitive advantage
3) FlexibilityFlexibility to define Loan Product characteristics, the terms and conditions, which will be automatically applied on every loan product depending on the commodity.
4) Processing and evaluation of customer’s Processing and evaluation of customer’s applicationsapplications in order to grant a loan or a credit card and support the operational workflows in order to process the request
Modern IT solutions supports the Bank Modern IT solutions supports the Bank to gain competitive advantageto gain competitive advantage5) Checking for the presence of all required documentsChecking for the presence of all required documents,
which are a prerequisite for granting a consumer loan or any other facility
6) Production of all related documentationProduction of all related documentation including all “agreements”, which need to be signed at the time of granting the loan
7) Functionality, that can be introduced, to improve the improve the relationship with cooperating merchantsrelationship with cooperating merchants and allow settlement of commissions to be paid to them.
8) Monitoring of payments due Monitoring of payments due, and if a payment is not done on time, then a past due payment record should be automatically created for which the Bank should apply its policy in terms of grace periods, penalty interest, hierarchy of payments, accruing of interest, transferring of the record to “Non Accrual basis” so that interest will not be booked in the P&L but in memo accounts etc.
Automation = Automation = Cost reductionCost reduction
Possibility to serve the retail Possibility to serve the retail customer through “direct customer through “direct banking channels” = banking channels” = Cost Cost
reductionreduction
Modern IT solutions supports the Bank Modern IT solutions supports the Bank to gain competitive advantageto gain competitive advantage
Modern IT solutions supports the Bank Modern IT solutions supports the Bank to gain competitive advantageto gain competitive advantageBy using such channels customers will not have to visit the
branches, as often as they do today, and will be in a position to perform, by themselves, the majority of the banking
transactions needed:
If there is the need for cash withdrawal the customer could use the ATM network
If there is a need to know an account balance, a credit card balance, a loan balance, or a need to receive a statement, the customer could use the ATM, or internet banking or phone banking
Similarly, if there is a need for a fund transfer, the ATM or the phone banking could be used (for simple transfers) and the Internet Banking or Mobile phone banking could be used (for more demanding fund transfers). International payments could also be served through these channels, as well as, buying or selling foreign currency.
Placing orders to buy or sell securities can also be served by the direct banking channels
Banks are seeking partnerships with external solutions
providers who can transfer their
expert skills and
experience to internal staff
TEMENOS ROMANIA TEMENOS ROMANIA
Software Applications Software Applications
to address theto address the
Banking Industry Banking Industry
Every time a step Every time a step ahead ahead
4. b-Direct - an e-banking application that also provides 24x7 capabilities
3. u/Switchware – an ATM/POS Switch
2. The Card Management System (CMS)
5. SmartReporter – the reporting tool
1. Temenos Globus – integrated banking solution
OFS / ATM Link
B-Directe
BANKING
ISO8583 / ATM Link
u/SwitchwareThird party ProcessorPROS
SECOR
ATM 1 ATM 1 ATM 1
InterbankSwitch
ATM 2ATM nATM 2ATM nATM 2ATM n
Stand indatabase
Alternative sales channels
Internet Banking
IVR /Operators
Telephone
Mobile phone
Fax
API
BACK OFFICE
Core banking system
Back OfficeSYSTEM
Card Management
CardMangement
Sevrer
SmartReporter