Tag: banking


Customers have Options, Banks don’t…

Today, customers not only want anytime-anywhere access to their account details, but also the power to manage accounts, check status updates, and even chat live with a customer service representative 24/7. If you can’t satisfy your customers’ requirements, someone else will.

With expansion plans of leading banks, government’s focus on financial inclusion, and the entry of foreign banks, competition in the banking landscape is getting stiffer each day. Driven by the preferences of their tech-savvy customers, banks are investing significant time and money in exploring newer technologies that can help them exceed their customers’ expectations. Banks are looking at innovative technologies such as mobility, cloud, and virtualization to drive differentiation. Going by a recent industry research, published by analyst firm Ovum, IT spending by banks globally will reach $118.6 billion in 2013.

In today’s scenario, where real-time customer service has become a norm, mobility has become a strategic imperative for banks to remain competitive and retain their customers, by proving convenient, simple, and secure banking services. Mobility offers an opportunity for banks to offer convenient self-service tools to their customers. It gives customers the freedom to securely access their personal accounts, process transactions, or make payments – all using their mobile devices. When it comes to retaining customers, there is no room for delay – your bank is either on mobile or off the market.

Bio: Garima is Manager - Marketing & Communications at Newgen Software.


How prepared are you for FATCA?

FATCA stands for the Foreign Account Tax Compliance Act. According to leading consultancy firm PWC – “It adds a new chapter to the Internal Revenue Code (Chapter 4) aimed at addressing perceived tax abuse by U.S. persons through the use of offshore accounts. The new rules require foreign financial institutions (FFI’s) to provide the Internal Revenue Service (IRS) with information on certain U.S. persons invested in accounts outside of the U.S. and for certain non-U.S. entities to provide information about any U.S. owners.”

FATCA was enacted by the United States government in 2010, as part of the Hiring Incentives to Restore Employment (HIRE) Act. It is an important development by the US to combat offshore non compliance. It is also being seen as an initiative that will increase compliance and transparency around US persons and assets, and hold to task those that do not meet its conditions.

FATCA applies to any individual, US or global banks and institutions, and any company or business entity that engages with US clients or assets over a certain threshold in an account. While FATCA will impact US MNCs and withholding agents, its bearing upon Foreign Financial Institutions (FFIs) will be most profound.

FATCA requires that FFIs and global banks register with the IRS and enter an FFI agreement whereby they promise to identify, collect and report information on offshore bank accounts of their US clients. Entities can register through the FATCA web portal. In order to be included on the IRS’s list of compliant institutions in December 2013, all entities must register before October 25, 2013.

What is your bank’s or organization’s role after FATCA coming into effect?

  • Perform a detailed analysis of your existing customer base to filter and identify any U.S. clients and report them to the IRS.
  • Send annual reports to the IRS on the assets held and transactions that have occurred on the accounts or portfolios of any U.S. clients.
  • Capture additional documentation with respect to new customers as and when they set up an account or portfolio.
  • Make modifications or updates in your existing banking system that will withhold the 30% U.S. Tax on customers that refuse to supply the information and documentation required.

Why prepare now?

With FATCA coming into effect, it is imperative for entities that fall under the purview of FATCA to be prepared.

Many strategic and operational decisions need to be made, analysis needs to be done, and systems and controls need to be in place before applying for an agreement, in order to to ensure compliance. If no steps are taken and the deadline is missed, the 30% withholding will begin to be enforced.

Challenges faced by Banks and FFIs:

  • FFIs will need to make a strategic call on remaining invested in the US market or exiting it, for the sake of its customers or itself
  • Current KYC Processes will need to be overhauled as they don’t gather enough information for FATCA purposes
  • Adapting and investing in processes and IT systems to meet the FATCA deadline
  • Non-compliance brings with it the real risk of losing revenue from US customers and assets
  • Undertake training for key personnel and setting up a dedicated team

How can Newgen help you prepare?

FATCA compliance enabled Newgen’s OmniFlow Solution will assist in the identification, classification, documentation, retention, maintenance and reporting of financial information of US Persons with holdings at your Bank’s legal entities. Our solution acts as a layer on top of your core systems thereby ensuring none of your current processes are disrupted, and that our system can run fluently in the background giving you the reports you need. Newgen’s solution provides a focused workflow to bring uniformity and automation to your due diligence process, thus providing visibility and control.

Five practical issues to keep front-of-mind

  • Timing: FATCA is now a timing challenge (not just in terms of key dates but pace of preparation and execution readiness).
  • Business Impact: FATCA will have ‘front-to-back’ impact through financial institutions: from customer awareness and information management, through establishing a Transparent, Repeatable and Consistent Process.
  • Opportunity: FATCA is not just a challenge it is an opportunity; to improve customer data quality and availability, to open new dialog with customers, to transform compliance in this key area. FATCA will have major implications for customer data quality and availability.
  • Imperative and Impending: FATCA is a ‘must fix’ not a ‘maybe fix it at five minutes to midnight’ – it WILL happen and financial institutions need to have a clear picture of their readiness.

Immediate: The time to act is NOW!

Name: Imroz Adeeb

Bio: Imroz is Associate Manager - Corporate Communications at Newgen Software.


National Automatic Clearing House (NACH) – Elevating India’s Payment Landscape to Global Standards

The nation is now geared up for another NPCI mandate i.e. ACH or Automatic Clearing House. The primary motive of ACH is to handle low value, high-volume transactions based on electronic files. Ideally implementing this mandate will allow transactions to be cleared in real-time mode rather than batch mode. This paradigm shift to Real-time mode will be a milestone for the Payment landscape in the country and mirror global standards. The scope of ACH is set to cover 82,000+ Bank Branches spread all over India.

Automatic Clearing House (ACH) payment system was envisaged in the United States during the early 1970’s. It was a result of studies conducted by the Federal Reserve and also suggested by industry stalwarts that the increasing volume of paper checks used by businesses and consumers to pay their bills would eventually exceed the ability of the existing computer systems to process and sort the checks efficiently. Hence, the Automated Clearing House (ACH) payments system was designed to allow corporations and consumers to reduce or eliminate the use of paper checks to make routine payments. As for 2011, this network processed an estimated 20.2 billion ACH transactions with a total value of $33.91 trillion.

Automated Clearing House (ACH) system is better recognized as Electronic Clearing Service (ECS) in India. ECS is currently available in around 89 centers in the country. It is operated by the Reserve Bank of India (RBI) at 15 centers and by commercial banks at the remaining centers. With the introduction of NACH or National Electronic Clearing Service (NECS) by Reserve Bank of India, the reach of the system has been further deepened and all identified core banking branches of banks are to be included as part of the upgraded system.

The Proposal

NPCI proposes to build, implement and manage an Automated Clearing House (ACH) system with built-in security features and multiple level data validation facility accessible to all participants across the country. The new centralized ACH solution or NACH is expected to consolidate the current multiple ECS systems in due course of time and provide a framework for removal of local barriers /inhibitors and harmonization of standards and practices.

The NACH platform will have national footprint which will cover 82000+ bank branches. The platform will be robust, secure and scalable with both transaction and file based transaction processing capabilities. It will have best-in-class security features, cost efficiency & payment performance (STP) for all participants. The intention is to create fully automated processes with the use of open standards and best industry practices. This will prescribe a single set of rules (Operating and Business), practices and standards which are common across the country for all Participants, Service Providers, and Users etc.

The NACH platform will support financial inclusion measures initiated by banks, other financial institutions, Government etc. by providing support to UID and Mobile based ACH transactions. The proposed system will allow member banks to design their own products and help address specific needs of the corporate world, Government and retail customers.

Objectives of NACH:

  • Leverage on distribution footprint and technology to provide a modern, robust platform to handle large volumes of repetitive payments
  • Define and Manage Governance Process by way of a set of Operating Guidelines, practices and standards for all Participants, Service Providers and Users etc.
  • Introduce a refined Mandate Management system and processes with defined and transparent SLAs.
  • Provide Enhancements and Enrichments – additional data elements in the message formats, secured access, and user control.
  • Facilitate Exceptions and Dispute management
  • Support financial inclusion by providing support for Aadhaar based transaction

Name: Imroz Adeeb

Bio: Imroz is Associate Manager - Corporate Communications at Newgen Software.


Technology as an Enabler of the Indian Insurance Industry

“Consumerization of Insurance” by targeting various customer segments is the key for today’s insurance organization. As rightly pointed by Beena, in her post ‘The Role of IT in Shaping the Future of the Indian Insurance Industry’, GoI has come out with a 12 point plan to fuel growth in Life Insurance sector. I would like to bring forth few of the key points that Insurance organizations should focus on high priority.

GoI’s proposal for “Use & File” approach, being considered by IRDA, is aimed towards reducing the approval cycle for a product by IRDA. It is going to be a vehement task for Insurance firms to devise a product that is best suited for a given market segment, and stay ahead of competition. This will involve high degree of customer analytics, customer segmentation analysis & targeted promotion and customer servicing through various channels of communication. Proper infrastructure has to be in place to support such an initiative.

Bank can act as broker for selling Insurance” – There is need for integration and automation of Insurance processes along with the banking processes to have a common infrastructure for selling insurance products and services. This will directly reduce the time for customer on-boarding by having an automated and shared infrastructure between the banking and insurance divisions.  Such integration would enable usage of bank KYC as a valid proof of document for issuance of policy to customers, resulting in faster & easy acquisition.

Horizontally, there is push by the GoI as well as the industry for banking and financial services to penetrate in the rural population. “Rural Insurance” is one such area. Rural areas in India are still far away from digitization and lack infrastructure. e-Mobility solution is one of the technology advancements that most of the Insurance organizations are looking forward to employ, such that their agents are well equipped to capture,  acquire & process customers’ data,  while being on-the move and enable for shortest possible time for policy issuance.

With its proposed plan and changes in regulations, the GoI aims at the betterment of the Indian Insurance industry, and the reach of insurance services to the uninsured rural population. Organizations need to adapt to newer technologies to provide better services and meet the demands of customers and regulators. They need to have intelligent and integrated platforms for Customer & Data Analytics, Social Media Integration, Capturing & Managing Enterprise Content (in any form), Automated Business Process (not only intra-organizational but inter-organization too), Mobile applications and integrated customer communication through various channels.

Newgen has continuously worked towards aligning its solutions with the current needs of its customers. Newgen provides an Intelligent Business Process Management platform, that allows for data processing from multiple channels on the fly, enables data analytics in real time, captures and assesses trends by integrating with social media, and provides real-time communication based on customer profiling.

Name: Benjamin

Bio: Benjamin is Sr.Manager - Products & Solutions at Newgen and part of Newgen's Center of Excellence for Insurance vertical.


Next Generation Payment Systems

The latest development which promises to transform UAE’s payment landscape is the CBUAE’s initiative to introduce the UAE Direct Debit System (UAEDDS), which will provide a safe and convenient method of making recurring payment transactions for utility services, card payments and loan repayments, etc. With the clock ticking for the advent of the UAEDDS, Newgen is all set, with its enhanced payment suite, to help banks prepare to meet the challenge.

Newgen Software Technologies Limited has been present in the UAE banking marketplace for long, as a leading technology vendor, and has partnered with many banks, finance houses and corporate houses for implementing world class payment and banking automation solutions. A leading solution provider in the payments landscape, Newgen has implemented Electronic Fund Transfer (EFT) solutions and Image-based Cheque Clearing Systems (ICCS) across the Indian Sub-continent, the Middle East, Africa and the SEA regions. Newgen has also been engaged in the various DDS seminars and discussions conducted by the Central Bank so far. Newgen’s solution for Direct Debit payments provides a unique opportunity for banks in the UAE to opt for a world class, cost-effective and ready-to-use product for handling the DDS mandate.

With the objective of addressing every aspect of the Direct Debit system and its implications to banks, service providers and consumers, Newgen is hosting the ‘Next Generation Payment Systems’ Seminar to in Dubai on Tuesday, August 28, 2012.

The seminar is being held to present Newgen’s vision of a unified payments hub for banks, along with:

  • Demonstration of “Newgen’s Direct Debit Solution” on UAEDDS System
  • Views of senior bankers / industry experts along with their experiences in addressing and mitigating key challenges related to payments
  • Creation of opportunities to network and collaborate with leading financial players in the Middle East, and building new partnerships

Who Should Attend:

  • Senior Payment/Operations Executives from banks and financial institutions
  • Senior Executives from banking technology sector

Seminar Leaders and Speakers: Thought Leaders and Solution Experts in Payment Systems

The session will be followed by networking drinks and dinner. With a nearing deadline for the introduction of the UAE Direct Debit System (UAEDDS), banks need to assess the adaptability of their existing legacy systems to the requirements of the new payment system. Newgen believes that such an event will help banks to exchange views with industry experts, explore automation of error-prone processes, and efficiently manage electronic fund transfers, while reducing their operational expenses.

Name: Amandeep

Bio: Amandeep handles the pre-sales operations for payment solutions in Newgen, including ICCS and Direct Debit products.


From Banks to ‘Financial Supermarkets’-The Alternate Perspective

In my previous article, titled ‘From Banks to Financial Supermarkets’, I have mentioned about the strategies banks are following these days and projecting themselves as financial supermarkets- one stop shop for all financial needs; be it opening of CASA, home loan, personal loan, credit card, bank assurance, or mutual funds.

There is one more way of looking at the term “Financial Supermarket”. The word Supermarket signifies multiple products from multiple brands made available under a single roof. Now let’s see how the concept of Supermarket translates to Financial Services. A Financial Supermarket means all financial products from different vendors made available under the same roof. Today’s customer is very aware and makes his financial decisions after evaluating several options. He may want a credit card from one bank and an insurance solution from another. In such a case to get a complete control of a customer’s portfolio or to create a loyal customer base, a bank can tie up with other Financial Services vendors and earn huge commissions. For e.g. XYZ, a leading bank in India, that offers all banking products ties up with ABC Insurance Company and adds ABC’s products also in its portfolio. Following a similar approach, a bank can tie up with several financial services vendors. This will not only add variety to the banks portfolio but also result in increased revenues.

However, to adopt this concept of Financial Supermarkets, banks need to have a very strong back office, or a ‘Process Factory’- BPM platform above Core, which can take the entire processing load from the front office staff, thus giving them an opportunity to concentrate on sales and customer service.   

Name: Neeraj

Bio: Neeraj Koli is part of the Global Business Development team at Newgen, and is responsible for the APAC Banking market.


Digitization and Process Automation in Government Departments: Need of the Hour

With increased focus on transparency, compliances and better services within a specified period of time, more and more government departments are realizing the need for investing in their IT Infrastructure.  Government departments, specially the customer centric ones, such as Transport, Health, Passport, and MNREGA, are constantly faced with an uphill task of managing huge volumes of documents and processes. These departments need a system that can help them deliver citizen centric services to the people at a faster pace, with improved transparency and accountability.

Large public sector enterprises have already taken steps towards embracing e-Governance and Digitization. There are examples of organizations such as DMRC – very recently they have adopted a SaaS-based Document Management System, seeing digitization as the need of the Hour.

There are multiple other examples where Newgen has helped organization such as Council of Scientific and Industrial Research, Department of Scientific and Industrial Research, Gujarat Industries Power Company Ltd, Madhya Pradesh Transport Department, Estate Office Chandigarh, Gujarat State Fertilizers and Chemicals, LIC of India, and many public sector banks to realize their objective of a ‘Less Paper Office’ through its award winning end to end document management and process automation solutions.

If technology has enabled us to go paperless and achieve better governance there is no reason why organizations should not go with it. 

Name: Neeraj

Bio: Neeraj Koli is part of the Global Business Development team at Newgen, and is responsible for the APAC Banking market.


“Banking Transformation Needs Smart Automation”

Last night I participated in a webinar titled “Banking Transformation Needs Smart Automation”. The webinar highlighted BPM and ECM as catalysts for financial services transformation and how business benefits could be accrued from their implementation. The speakers included Derek Miers, Principal Analyst of Forrester Research and Mridul Sharma, Senior Vice President, Solution Delivery Team, IndusInd Bank and Ritesh Verma, Head, CoE Banking Practice.

Mr. Derek Miers talked about “Driving Transformation in Financial Services.” He began by stating that most organizations today are in the midst of one of the most disruptive shifts in economic history. The shift has been from producers and those who hold capital to consumers. Consumers he said had a plethora of choices today and even more so in the finance and banking industry. He went on discuss the gradual transition from the way banking services were delivered on paper to the 360 degree approach that is followed today. He stressed on the fact that since customers had so many choices, the greatest differentiator was how customer experience was delivered to customers. If customers were dissatisfied, they would invariably jump ship. To keep in tune with customer needs, organizations had to evolve and transform themselves. Mr. Miers spoke about how processes were at the center of this transformation from Traditional Line Management to Processes and Services Management. He argued that this did not warrant a Band-aid approach where specific systems or parts of the organization were changed but more like a “Wellness Program” which brings overall vitality, rejuvenation and business transformation. He felt that customer centricity should become the default behavior of the organization and especially its front line.

This approach reminded me of the term “Big Process” that I read in an article by Connie Moore titled “Embrace Big Process Thinking” where she said, “Big Process is when senior-most business and technology leaders embrace business process change by shifting the organization’s focus from isolated BPM and process improvement projects to a sustainable, enterprise-wide business process transformation program that is then supported and driven by top executives.” I think this aligns perfectly with what Derek was trying to explain.

Derek went on to elaborate on how organizations should build their transformation plan by focusing on outcomes and working backwards to the processes it needs to deliver that outcome. He concluded by highlighting that organizations should look at this as an opportunity to shine and take the lead rather than waiting for change to happen.

Mridul Sharma then took the speaker’s role and discussed how Newgen’s BPM solution helped the bank to improve processes, reduce turn-around-times, foster transparency and lay the foundation for a paperless and green office.

Ritesh Verma concluded the presentation session by discussing Newgen’s capabilities in BPM and ECM and stressing on how Newgen is in the business of transforming banks. He went on to point out how Newgen has become a key enabler for fast growing banks. He also enumerated the company’s achievements in the BFS industry and its pedigree of 850+ installations across 45 countries. He concluded by showcasing the number of clients Newgen has worked with and how it has helped 119 banks across the globe to achieve their business goals.

The webinar was wrapped up by a Question and Answer round where participants interacted with the key speakers.

Name: Imroz Adeeb

Bio: Imroz is Associate Manager - Corporate Communications at Newgen Software.


Bankers Bank on Technology to Increase Bank-Density

In last 4 months, I had the fortune of meeting some top leaders in the Indian banking industry including some CMDs and EDs of large public sector banks. One common subject that all these people agreed and spoke about was that the use of Information and Communication Technology is the only way to take a quantum jump and attain the objective of bringing all unbanked citizens under their umbrella.

Indian Banking industry survived the global economic crisis and remained the back bone of growing Indian economy because of its robust checks and balances within the system. Now with such strong fundamentals in place, it is looking at its growth in the same way as the telecom industry did in recent past in India.

Drawing an analogy, the growth of telecom industry in India has been possible because the industry had the vision of increasing the tele-density in rural India unleashing the power of billion+ people. This was made possible because of high usage of Information and Communication Technology by the industry. Today the whole of India is enjoying the benefits by getting very low usage rates and many more facilities coming forth.

In a similar way, the banking industry is targeting the unbanked people of rural India and bringing them within the banking system through financial inclusion. Information and Communication Technology is the only tool which bankers are banking upon to bring about a telecom industry like renaissance. Who knows the whole of Indian population might gain through reduced interest rates on loan and more credit facility for working capital to bring about capital growth of the nation by unearthing the huge potential of unbanked money laying in Rural India.

Telecom like scams are a big NO NO in this transformation process …

Name: Sameer

Bio: Sameer is Head - Global Business Development at Newgen software Technologies Ltd.


Central Processing Centers: Adding New Dimensions to Banking Services

Gone are the days when a Bank simply meant a financial body where people could keep their hard earned money and feel relaxed with little bit earning in the form of interest. Today, growing customer demands have transformed Banks into Financial Institutions or Financial Supermarkets to be more appropriate. In order to retain customers and remain competitive banks today cater to all the financial needs of customers such as opening of CASA, home loan, personal loan, credit card, bank assurance, or mutual funds.

Advancements in their IT infrastructure have enabled banks to go “Beyond Core”, and explore new opportunities for information management, thereby achieving improved customer service and better risk management.  Expanding the scope of banking services, banks today have set up Central Processing Centers (CPCs) that cater to multiple processes with reduced TAT, resulting in improved customer experience.

CPCs help banks to carry out all processing activities at one particular place while only front ending activities are carried out at the different branches of the bank. This results in better customer service and happy customers, and also provides the branch banking staff with a better chance for cross selling and up selling products.  All the document intensive processes can be carried out in a CPC which in turn would result in leaner and thinner branches. Banks may have multiple CPCs (based upon the process and location). In case a bank is planning to outsource some of its processes, having a CPC places the bank in a better position for negotiation with outsourcing service providers as the bank is aware of the exact cost of owning the process. It also provides an option of going for selective outsourcing.

Newgen has been instrumental since years in providing solutions, based on its award winning Enterprise Content Management (ECM) and Business Process Management (BPM) platforms for centralization, standardization, and optimization of processes like Account Opening, Loan Processing, Trade Finance, Card Approvals & Issuance, Customer Onboarding & KYC, and Customer Request Management in a Central Processing Centre.

If utilized to their full potential CPCs can really add a new dimension to banking services.

Name: Neeraj

Bio: Neeraj Koli is part of the Global Business Development team at Newgen, and is responsible for the APAC Banking market.


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