Banks are facing enormous amounts of changes today. Fundamentally,
the business model is changing from a product-centric model to a
customer-centric model. The customers are demanding more convenience and more
interactive features from their banks so that their ease of interaction with
the banks improves dramatically. These are leading to changes in the business
operations of banks to deliver meaningful services to customers.
Effect on core-banking systems
Core-banking systems are at the heart of all these changes
because a bank’s ability to deliver customer-centric products and services are
dependent on the architecture of the core-banking system. Earlier, when the
banks followed a product-centric business model, their core banking system was
able to deliver the right products and services. As the business model is
changing, it is become more and more challenging to the same core banking
systems to manipulate and change in order to meet and deliver the
customer-centric requirements.
Instead of completely changing the core system, it is about
re-structuring the core system because the earlier core systems were designed as
monolithic systems which had embedded business processes, logic and rules
inside the system. The business is demanding that these embedded processes, rules
and logic be exposed so that they have a faster, better and an agile way to
combine them because the degree of change that is coming from customers is so
rapid that the change is not able to get done inside the existing core system.
So, re- structuring them is a fundamental way of increasing their agility and
flexibility to deliver new products and services.
Role of DW/BI systems
Along with changing the core system, there is a need to
implement technology solutions which provide a single version of truth across
the business, deliver timely and trusted information and aid in efficient
decision-making. This can be achieved by a DW/BI system. In the context of
enabling a customer-centric business model, three aspects of a DW/BI system
clearly stand out, and they are: [2]
- Enterprise-wide Customer Data Integration
- Data Quality and Data Governance
- Master Data Management
Data residing in different sources need to be combined and
presented to the users in a unified manner. Customer data can originate from multiple
channels, business lines, application systems and databases [3]. An accurate,
timely and complete representation of this data needs to be maintained in the data
warehouse. Customer Data Integration will support an efficient customer-centric business model which
will lead to achieving banks’ ultimate goal of decreasing costs and increasing yield.
For huge volumes of data, internal consistency and correct
representation of the real-world construct are extremely important. Both
technology and business stakeholders must take responsibility of managing data
quality issues. A bank’s data quality solution must detect errors, allow users
to create their data quality rules and assist in implementation of these rules.
The increase in demand for compliance has necessitated the need for careful
handling of data. Before extraction of data from source systems, data of poor
quality needs to be identified and handled. Data profiling will find out such
data and this will be handled efficiently by the ETL process.
Effective customer data consolidation involves capturing the
data accurately in the source systems along with data cleansing/merging tools
in the ETL process. The Master Data Management tool provides a single point of
reference by managing the critical customer data which will lead to effective
management of customer relationships, retaining customers and growing the
business. It helps banks to find unique customers, link them to accounts and
stretch out such relationships to all the entities involved in the banking
world.
There is a tremendous need to acquire and retain customers
in banks, and in the financial services industry in general. Managing
enterprise-wide customer data effectively leads to maximizing the bank’s
growth.
References:
[1]
[2] http://blogs.informatica.com/perspectives/2013/02/15/bankers-insurers-how-customer-centric-are-you/
[3] Wikipedia