Agile banking managing

Agile banking managing

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  Agile Banking –Managing the Challenge of Change Universal Banking Solution System Integration Consulting Business Process Outsourcing
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  Business Agility tap new and emerging platforms and channels like Social Media, which can be used to crowd Business agility is the ability of a business to source the development of products that can adapt rapidly and cost efficiently in response to cater to the needs of a particular segment. changes in the business environment. Business agility can be attained by maintaining and Time Agility defines the speed with which a bank adapting goods and services to meet customer can roll out new products and services to take demands, adjusting to the changes in a care of the varying needs of customers. For a business environment and taking advantage of bank to be time agile, the processes and systems human resources. that underlie operations should be capable of handling the frequent changes in the bank’s Agility in Banking offerings. The use of state-of-the-art banking solutions will enable the bank to turn around Agility in the context of banking doesn’t mean newer products quickly and manage diverse just speed in execution; it also means that the products and services as time progresses. bank is nimble and flexible. Agility helps the bank to win a marathon, as opposed to a Challenge of Change hundred meter dash. Hence, an agile bank is one that is on the move A bank, which is agile, will be able to roll out and constantly undergoing change. An agile new products at a much more rapid pace to bank will also have a large number of alliances meet the target of treating each customer as a with partners who contribute to various parts of segment of one. This rapid product development the product and service offering. The way the and rollout can be managed only if the bank is change is managed will determine whether backed by a clear process strategy to handle the bank succeeds at increasing customer product complexity and accompanying growth. satisfaction and profitability or ends up with a This combination of product and process in large number of offerings that add to the chaos, an agile bank is expected to increase the but not to customer satisfaction. quality of customer experience, which can be benchmarked using a metric of growth combined Some of the key steps on the journey towards with stickiness. By growth, we mean that a agility, which will help in managing the challenge bank is able to attract new customers as well of change, are as follows: as more business from existing customers. Identify the Change Driver High stickiness means low customer attrition. The need for agility in a bank can arise from a Hence, agility helps a bank to streamline its change driver. This change driver can be internal process such that it can roll out newer products or external. External change drivers arise from at a rapid pace to increase the quality of factors over which the bank has almost no customer experience, and thereby retain existing control, like a reduction in margin because of a customers and attract new ones. hike in interest rates, or an increased regulatory Types of Agility compliance burden on account of heightened Central Bank norms. Internal change drivers Agility can be classified in two ways. A bank can can arise from factors such as merger and be either Range Agile or Time Agile. acquisition or a reduction in workforce. The driver of agility needs to be identified and Range Agility defines the ability of the bank to communicated clearly within the bank and to broaden or shrink specific aspects of its all its stakeholders. capabilities. This also implies that the bank is able to increase or decrease the portfolio of Identify the Agility Enablers its products and services. This can happen by simultaneously expanding or shrinking the After identifying the change drivers, the bank bank’s processes and the capabilities of its needs to identify the agility enablers against people. A range agile bank will also be able to each. The current and target states need to be Agile Banking – Managing the Challenge of Change
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  identified for eachof these drivers as well as Effective Decision Making the enablers that will take the bank to its target. For instance, the loss of customers due An agile bank, working in a dynamic business to the unavailability of mobile banking, can be environment, needs to respond to change to a change driver. The agility enabler in this case tap growth opportunities. The effectiveness of could be the adoption of a new technology decision-making will determine the quality of solution for Mobile Banking. Another driver the response. The performance metrics and data could be the need to reduce the waiting time relevant to the bank need to be extracted and at the teller window. The agility enabler in this presented within the shortest possible lead time case could be service automation through an for agile decision making. The best-in-class ATM or kiosk, supported by IT infrastructure at IT solutions for banks come with their own the backend. analytics solutions, capable of generating the data required for analysis, at a click. If there Strategy Formulation and People Management are multiple enterprise systems and multiple subsidiaries operating within the bank, it is worth The top management of the bank needs to exploring an Enterprise Decision Dashboard identify the strategy for each of these enablers (EDD). An EDD will have the data extraction and communicate the same to the unit or and presentation capabilities to take the output department concerned. In each unit, a core team from multiple systems and present it to the must be formed to manage the transition, as decision makers. well as communicate with the people within. More often, the strategy formulated by the bank Review and Monitoring must encompass the change in its technology A steering committee consisting of the CXOs of landscape. The bank might replace the legacy the bank needs to be formed, and charged systems with the latest Banking system to cover with conducting periodic review and directing its end to end operations. This might necessitate course correction if required, in the journey developing the skills of the bank’s employees. towards agility. Under the steering committee, a Hence, every strategy formulated to reach the core team comprising members from each target state of an agility enabler must consider concerned SBU or department must be formed the people dimension, especially from the that will drive and monitor the progress made in standpoint of minimizing chaos. their respective departments. Effective Business Process Management Conclusion The business processes needs to be clearly The journey towards making a bank agile documented; in the case of an agile bank, involves changes, which affect its people, Business Process Management (BPM) needs processes and products. This is accompanied to be constantly updated, preferably by the by a change in its technology landscape to people who carry out the business processes. facilitate rapid innovation and transformation. The business rules, constraints, processes and These changes needs to be carefully calibrated policies need to be documented as part of BPM. and managed so that the bank’s existing The generation of business process maps is not customers do not feel any adverse impact and a one-time activity and will constantly undergo the bank also attains a larger market share change as the bank changes its products and and higher customer satisfaction at the end of processes to become more range agile. Hence, the journey. it is prudent to identify the owners for each business process, who will be responsible for References keeping the process documentation up to 1. ‘Agile Banking: Leverage the Integrated date. An enterprise BPM solution will help the Banking Platform’, Rajashekara V. Maiya bank in managing business processes and also making them accessible to all their 2. ‘IT agility: striking the right balance’, Kishore respective stakeholders. Sengupta and Andrea Masini Agile Banking – Managing the Challenge of Change
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  3. ‘Strategic AgilityPlanning for Banks’, Prashant 6. ‘Benchmarks of agility at banks’, Rajashekara Gupta and Prashant Tewari V. Maiya 4. ‘Towards Enterprise Agility through Effective Decision Making’ by Sriram Anand and Author Jai Ganesh Kartik Ramadas 5. ‘Business Process Management: Facilitating Consultant - Finacle Enterprise Agility’ by Akash Saurav Das, Infosys Limited Sandeep Gaikwad and Vivek Raut Agile Banking – Managing the Challenge of Change