FINANCIAL INNOVATIONS - Banking Frontiersbankingfrontiers.com/finnoviti/wp-content/uploads/2015/01/... · FINANCIAL INNOVATIONS. BANKING FRONTIERS FINNOVITI 2015 3 ... As a pilot

BANKING FRONTIERS FINNOVITI 2015 12015

BANKING FRONTIERS’

PROCESS ADVISOR

A compendium of top 30 innovations selected by the jury at Finnoviti 2014

F I N A N C I A LINNOVATIONS


Finnoviti 2014

Innovations in the BFSI sector normally go unnoticed and unrecognized because of multiple factors starting from stringent

regulations that govern the sector to the faster pace of change that is happening in the sector to the ever evolving products and services and the very complex technology applications that power the sector. Nevertheless, we have found and announced that innovations indeed happen but remain hidden or unannounced. It has been our endeavour in the last two years to uncover these innovations and encourage the people and the skillsets behind them. So has evolved Finnoviti. This is the second edition of this awareness cum reward process. As in the past, Finnoviti does not differentiate between banks, insurance companies, wealth managers, financial brokers or other financial service providers, as innovations across the sector are fair and acceptable. The innovations, filed in the form of nominations adhering to the rules and regulations were screened our process partners Deloitte for completeness and relevance. These were then screened by a pre-jury panel, comprising CEOs and financial experts across the BFSI sector, who evaluated and selected the best entries to be judged by the final deciding authority, the jury committee. The jury committee has now selected the top 20 innovations.

We are happy to present a compendium of the 20 winning entries describing each of these winning innovations in some detail and listing the benefits the innovation brought about for the institution and/or its customers/stakeholders. We are sure this will be an inspring read for future innovators. We thank each of the members of the jury for the painstaking job in identifying what spurred the innovation and reasoning out why that particular innovation should win an award. We also thank Mr Monish Shah, senior director, Deloitte India, and his team, which painstakingly laid out procedures and norms and helped us in creating process for validation of each of the nominations received.

Babu Nair Publisher-Banking Frontiers

4 BANKING FRONTIERS FINNOVITI 2015

Innovation 2.0

History does show us that more successful companies most often compete on non-price, value based positions, being at the

forefront of the Industry Innovation Curve. We are, however, at an unprecedented cusp of time which appears to challenge all known paradigms.

The recent emphasis on efficiency does test two inter-related basic premises that innovators are more comfortable with. The first premise which is getting redefined is ‘Better before cheaper’ - which focuses on building non-price propositions rather than a low cost solution. In the Indian context, we have seen most innovations focusing on bringing down the cost in an extremely price and capital conscious eco system. The second premise which is likely to get increasingly challenged is focus on ‘Revenue over cost’ which bets bigger on volumes over costs. Pocket sized and economic value adding innovations are gaining increasing industry acceptance.

To make an innovation commercial, the proposition must be replicable at an economicalcost and must satisfy a specific need. In the Indian financial services context, innovations have structured around three basic categories. The first category is innovation around technology and business model configuration, which involves a newer approach to the market. The second category of innovation circles around creating new offerings focusing on unmet needs. Both these innovations are company initiated and hence easy to replicate. The third category of innovation is around customer experience and engagement where the customer buy-in differentiates the overall proposition. Mixing innovations wherein all these three categories arepresent will most likely create significant and sustainable competitive advantages.

As is evident from the nominations received for Finnoviti 2015, Indian financial services players recognize the importanceand benefits of innovation. Several themes which were evident from the last round have found commercial successes in the current year. I believe that the compendium definitely serves as a baseline for the industry innovation curve, and it will find players benchmarking amongst themselves against some of the newer practices which are likely to emerge and thus redefine industry performance parameters.

I hope you find this compendium a useful guide and reference.

Monish ShahSenior Director, Financial ServicesDeloitte Touche Tohmatsu India Private Limited


ICICI Bank

ICICI Bank is judged the top winner with

highest number of nominations

Innovation: Pockets

‘Pockets’ from ICICI Bank is a banking app on Facebook. It is mainly targeted at the young, tech-savvy, digitally-oriented customer segment and performs the dual functionality of servicing and engaging young users through social media channels and enabling them to perform regular banking activities. It has logged over 20,000 users – the highest number for any ‘Facebook banking app’ globally.

Innovation: Tap-n- Pay

ICICI Bank’s ‘Tap-n-Pay’ transforms a mobile phone into a wallet. It is a product, which is part of the bank’s Mobile Money. There are no cash payments but there is an inbuilt NFC facility which enables over-the-counter payments. It can be used for payments at campuses, for transport as well as at toll booths. As a pilot project, Tap-n-pay enrolled around 8,000 employees across major towers pan India.

Innovation: Insta Banking

ICICI Bank’s ‘Insta Banking’ is a self-service kiosk installed along with ‘May I Help You’ desk within a branch to provide superior banking experience to customers. The objective is faster transaction processing, reduced wait time, freedom from filling physical forms, and improved productivity of branch employees. The bank has deployed some 250 Insta Banking kiosks at major branches across 37 cities, some 2 million transactions have happened since launch. Pre-processing is available for cash deposits, cash withdrawal, fund transfer and demand drafts. With card and PIN authentication, customers can make inquiri8es about accounts, print account statements, modify address and transfer funds and pay registered billers.


Innovation: Kay Pay

Kay Pay is a payments platform from Kotak Mahindra Bank, which is described as seamless and frictionless and as easy as cash but does not require cash. It eliminates the requirement of beneficiary registration and visits to bank branches for registration for net banking or mobile banking or funds transfer, ensures total security and facilitates attachment of a message to the recipient along with the fund transfer. The service allows funds transfer with the ecosystem of 28 banks offering NPCI’s IMPS P2M pull service and enables more than 250 million customers of these 28 supporting bank to transfer money to any of their Facebook friends without knowing their bank account details. The bank offers teh service free of cost to all the 100 million Facebook users in the country. Kay Pay also enables transfer of fund to a friend without the knowledge of friend’s bank account details, the transfer is instant and live 24X7 and it is bank agnostic.

Innovation: Insta Balance

Kotak Mahindra Bank has developed Insta Balance as a system to facilitate customers get their account balance without agent assistance or login to any channel. A customer has to call a toll-free number 1800 274 0110 from his registered mobile number, the system will greet the customer and confirm that he will receive SMS for his request shortly. The call is disconnected (this process takes 5 seconds). Instantly, the system identifies all account linked to the mobile number and fetches balance of the accounts and send the same to the customer as SMS/s. (this usually takes less than 30 seconds). Up to 10 accounts can be serviced for a mobile number. In about 8 months the hits to the system rose from 35,000 to around 3.2 lakh, resulting in reduction of agent assisted calls by 10,000 per month and cost saving of Rs 2.5 lakh per month. The service can be used by all customers having a mobile phone irrespective of data connectivity.

Kotak Mahindra Bank

kaypay


Innovation: My Citi Rewards

My Citi Rewards is a Facebook app from Citibank to enable customers of the bank to interact with the bank and redeem rewards points with ease and basis their convenience. It has proved to be an engaging platform for the bank to self-promote the benefits of its credit cards. There are various links within the app which will direct the prospects to an instant decision form for a card of their choice. The app also enables the bank to directly interact with its customers on social platforms and provide them with customized solutions basis their social behaviors. While the app delivers an enhanced customer experience, it simplifies redemption activity for customers. It also has the ability to acquire new customers

Innovation: CitiDirect BE

CitiDirect Banking Evolution is a next generation online banking platform providing a single point of entry into a complete suite of corporate banking and cash management services. With a single log-on to CitiDirect BE, clients are able to access numerous treasury and trade products and solutions to address both their local and global banking needs in

the areas of receivables, trade, liquidity and investments, as well as payments (cross-border and domestic) and reporting. This portal provides seamless access to new analytic applications such as trend analytics scorecards, self-service tools and interactive business intelligence functionality. CitiDirect BE Mobile, a customer can receive real-time SMS alerts and payment notifications and perform account balance and transaction inquiries. CitiDirect BE Analytics Scorecards enable quick and intuitive assessment of operational performance and visibility into improvement areas based on customer data through sophisticated business intelligence and analytics capabilities. Electronic bank account management (eBAM) module streamlines signatory management and account-opening activities.

Citibank


Innovation: Analytics at SBI

There are two initatives. The first one is analytics on foreign inward remittances, under which payments data from payment hub and SWIFT was analyzed along with the corresponding NEFT outward transactions going to other banks. Payments data pertaining to Global Link Services products along with corresponding beneficiary data, was also analysed to determine transactions going to other banks. A centralized repository was made for storing historical transactions of all remittance products which are maintained by different specialised departments and system was made for collating remittance files from each country in once place. Leads have been generated of prospective high value customers who frequently remit to their accounts with other banks via the SBI network. It was found out that majority of foreign inward remittance transactions were being routed via the SBI network to other banks frequently, earning minimal commission and giving away significant corpus to other banks. The second initiative is ATM analytics solution with cash optimization under which cash forecasting models were built using analytics tools, based on historical data for all the ATMs and parameters like withdrawal amount / cash refill, day of the week / week of the month and major events / geography wise festivals /holidays & weekends.

Innovation: Automation of Budgeting Process

State Bank of India developed in-house a Dynamic Budget Application and TM1 Application, an in-house developed web based centralised solution, which enabled a top-down/bottom-up flow of structured budget, dynamic user interface with maker–checker provisions, single page console for data entry, status monitoring, up-linked with TM1 application to make available controllers, extensive use of derived fields and cross page derived fields to minimize data entry efforts and serving as source data for the performance-reporting, application, creating a complete cycle.

State Bank of India


Innovation: Scan N Pay

Federal Bank’s Scan N Pay is a mobile application, first of its kind in the industry, for interbank fund transfer using the IMPS (24x7) facility. It is developed in-house. The required information for transaction is scanned from a QR code exhibited by mobile in case of an individual customer or display connected to the POS terminal of the merchant. The merchant (recipient) can key in the amount and bill No into the app to generate a QR Code and the customer (payer) can scan the QR code and initiate payment simply by inputting the MPIN. The transactions then happen

real time and payment confirmation is received by both recipient and payer instantaneously. A transaction log provides the list of transactions that are generated from and received

on the device. The system offers 24 x 7 availability, unlike NEFT / RTGS and has advanced security features including application authenticity security check and negligible transaction fee.

Innovation: Face-to-Face Banking through Video Branch

Indus Ind Bank’s Video-Branch combines the face-to-face assurance of a branch with the 24 x 7 ease real time transactions capability of digital banking. The bank created a dedicated 24X7 Video Branch Centre to cater to the customers’ banking needs with 30 minute service assurance for select transactions. Customers can do Video Banking with RMs or branch

managers at pre-defined time. Customers can also visit Video Branch through the website without the need to download the app. It is virtually meet the bank manager from where the customer desires and through whatever device he or she has.

Federal Bank

Indusind Bank

Scan N Pay


Innovation: National Unified USSD Platform

NUUP is an NPCI initiative to bring banking closer to the common man. It is supported by DFS, IBA and TRAI and has banks as well as telecom service providers as the members. Customers can access the service by dialling *99# through its telecom service providers (GSM service). The platform is intended to provide round-the-clock, real-time, access to banking services, facilitate the process of financial inclusion and contribute towards the process of electronification

of retail payment systems. It works across all handsets/GSM service providers, the service is available while roaming, with no additional charges and there is no need of GPRS connectivity or additional app download. The service is currently available in 11 languages, including Hindi, English and key regional languages and offers real time fund transfer in case of Financial services

NPCI

Innovation: IndiaFirst CSC Shubhlabh Plan

IndiaFirst Life Insurance Co’s Shubhlabh is a mass market insurance plan exclusively available through the Common Service Centres (CSC) set up by the government of India. It makes insurance affordable, accessible and attractive to the masses. The insurance plan formulated, finalized and issued on the spot and the customer is handed a Policy Information Sheet by the VLE (Village Level Entrepreneur, responsible for each CSC outlet). The process is a paperless and is a simplified application process. All the

policy servicing requirements have been enabled through the portal, so the customer can have all requests addressed at the CSC outlet itself. The KYC is done through Aadhar with biometric authentication, a very simple application is filled in and the premium is realized instantaneously. Underwriting is done on the spot and the policy is issued instantaneously.

IndiaFirst Life Insurance Co


Innovation: Smart Order routing

Kotak Securities introduced Smart Order Routing, or SOR, which is a facility that gets the best price for a trader’s buy/sell orders on available exchanges. The system automatically compares the price of stock across the available exchanges and helps you get the best price instantly.

There is no need to manually search for a better price while placing an order. The system does it in a matter of seconds. SOR can be used to get the best price for Buy as well as Sell orders. The service is offered free of charge.

Innovation: Business Assurance

ICICI Lombard General Insurance selected cashless claim process for the Business Assurance project. The challenges were that technology and business remained in silos, technology uptime and SLA cound not guarantee business process SLA, there wer technology TAT and business TAT alignment issues and lack of communication with business on outages. As part of the project, the company undertook a study and mapping of business procss flow and validation by business, identification of all technology components involved in business process, modelling of business process, measure and take action on utilization,

uptime, top incident cateogories and top polluters, incident and problem management and pattern-based analysis and infra agility. The result was business process view with predictability, pattern based analysis helped understand transaction pattern and take proactive actions than reactive, able to change HR strength as per business process requirement than static shifts, agility in infrastructure to ensure on demand hardware, business could commit TAT to customer because of confidence in IT and dynamic support SLA helping vendors to utilize non critical hours in delivering lot of value additions.

Kotak Securities

ICICI Lombard General Insurance


Innovation: Canara e-infobook

Canara e-InfoBook is an electronic passbook facility available on mobile handsets. The app supports multiple operating systems, is network agnostic, and can be used on all variety of handsets supporting internet facility and specified operating systems. The services available to customers through Canara e-InfoBook are electronic pass sheet of accounts (last 10 transactions, last 15 days transactions and last 30 days transactions), statement of accounts to e-mail IDs, tracking of

transactions date wise, balance enquiry, accounts summary, cheque status, ATM locator, branch locator, products information and what’s new in Canara Bank.

Canara Bank

Innovation: Incentivizing Customers by offering Discount Coupons

YES Band has launched the unique rewards mechanism for using the bank’s ATMs. To avail this offer, one has to simply walk into any YES Bank ATM across the country, withdraw cash or transfer funds and choose offers across categories such as books, entertainment, clothing, food and beverages, gifting, kids, lifestyle and online shopping. This reward scheme is available for Yes Bank customers and also those who make use of the bank’s ATMs. The discount coupon is offered during

the cash withdrawal transaction with the choice of coupon displayed on the ATM screen. The scheme has helped the bank in reducing the cost of remote online transactions, that is, YES Bank cards being used on other bank ATMs and at the same time create customer loyalty towards the bank.

Yes Bank


Innovation: Jana Jeevan Card

Jana Jeevan Card is a pre-paid card facility to the urban poor, which Janalakshmi Financial Services (India) has launched in association with DCB Bank. The solution can be used both for savings collections as well as merchant acquiring. The company lauched two products on the prepaid platform – first a loan disbursal program for the Small Batch Customers and second a commitment savings program for individual loan customers. Using the system, the

company has completely eliminated cash disbursement. All new small loan customers are issued a reloadable prepaid card in lieu of the existing proprietary closed loop card. The prepaid card is authenticated through cardholder bio-metric when used in the closed loop environment and via PIN when used at Visa ATM & POS. The key benefits are security and safety, savings opportunity for the urban poor and access to money anytime anywhere.

Innovation: Mobile Pre-Inspection System

The primary objective of Mobile Pre-Inspection System was to equip the sales force team of Reliance General Insurance with a application that facilitates pre-inspection of break-in-cases and issue policy to customer on the spot against old process of capturing vehicle photos, then visiting office to upload document and then issue policy. The second objective was to minimize fraud happening in break-in-cases like uploading vehicle photographs when it was in good condition it might be damaged in current scenario. The third objective was to increase in-house pre-inspection of vehicles which will ultimately

reduce pre-inspection cost by third party vendor. All the Inspection requests created from various applications such as Core business app, CRM call centre and company website are pushed to the system .These are subsequently integrated with MPIS so that whenever the individual user logs in, he is able to access the leads assigned. User is allowed to work on these assigned leads as well as create new leads for self inspection.

Janalakshmi Financial Services

Reliance Capital


Innovation: MyMix

MyMix is an innovative, sales enabler software application developed HDFC Life with three main objectives - fortifying need based selling, delivering unique and personalised customer experience and achieving quality business growth and productivity. The key features of the application as that it personalised client presentations through comprehensive illustrations, visual representation of benefits as per the customer’s needs and goals, thus enabling easy comprehension of otherwise complex insurance product, it created pre-designed solutions with goal-based product bundling catering to

specific customer needs, enriching the product portfolio by fulfilling product gaps and catering to current market needs; it afforded a tool for designing tailor made solutions for customer’s needs; it offered sales personnel personalized and tailor made product solutions for the customers; and offered detailed need based analysis with help of comprehensive need analysis, HLV calculator and wealth potential analysis for clients.

HDFC Life

Innovation: Tabulous Banking

Tabulous Banking facilitates opening of a bank account effortlessly from the confines of one’s home or work place. A bank officer visits the customer and captures the required KYC documents and photograph of the customer along with the required customer information in the tablet, equipped with mobile 2G/3G connectivity, and the information is uploaded to the bank’s server and the customer gets an auto SMS alert informing him/her about the account number. It is a pioneering green banking Initiative comprising virtual templates to

capture the customer details in digital mode dispensing the need of physical documentation. Using Tabulous Banking, Union Bank has been able to improve customer service by introducing doorstep account opening facilities and reduce TAT to 24 hours for account activation that has led to customer delight.

Union Bank of India


Innovation: Exadata Upgrade

HDFC Bank has succeefully migrated its database servers to Basel2RCR and Oracle EBiz on Exadata Quarter Rack. Earlier, the database server was Oracle 11.2.0.2 on AIX 6.1 platform with the Database size as 3.6 TB. Over the years, the transaction volume had increased to 55% and database growth to 500 GB on yearly basis.

Due to this, GL processing time has been increased to 4 hours. As a result, the release of GL used to happen in the second half of the day. This had a cascading effect on management reporting and downstream systems

HFM, RBI reporting extracts. Also the Basel2RCR month run used to take around 50 hours to complete. The bank then upgraded existing Oracle Quarter Rack X2-2 to another Quarter Rack X3-2 to make it as Half Rack. Databases of both applications are migrated to upgraded Quarter Rack X3-2 on Oracle 11.2.0.4. Besides, databases were deployed on two nodes of Exadata that provides DB redundancy and high availability to application. Backup time was also reduced by using RMAN compression backup feature of Exadata.

Innovation: Digitized Policy Servicing Modules

Bajaj Allianze General Insurance felt that its customers were facing difficulties or delays with respect to policy services at three major touch points: important information like names or address are either incorrect or incomplete and such issues took around 8-10 working days to be resolved; at times, the customer did not receive the policy copy despite being dispatched by the company. The non-receipt of the policy led to constant follow-up and it also led to an increase in the administrative cost for the company to reissue the same; in case of health policy, customers falling in a specified age group

and according to the details mentioned on the proposal form, need to undergo a pre-policy medical checkup. The earlier process involved issuing an authorization letter which allowed customers to undergo the tests at empanelled hospitals. Often, this letter did not reach the customers, due to which these checkup were refused by the empanelled hospitals.This resulted in the loss potential customers and at a business front, loss of sales. To overcome these hurdles, the company introduced online policy copy issuance, online endorsement system and Insta Pre Policy.

HDFC Bank

Bajaj Allianz General Insurance


Innovation: Best ESB Deployment

RBL Bank felt that applications that have been deployed using point to point integration comes with challenges. Business is faced with additional cost , delayed integration timelines, downtimes and loss of agility on account of this. It introduced an ESB framework layer to overcome these issues, which ensured that all point-to-point connections are eliminated, the existing system functionalities are exposed as services, and organized into an efficient, unified, standards-based architecture, agile business tactics are practised, new partner offerings and pricing structures are rolled

out quickly into their ordering system and a non-destructive incremental migration path from their legacy stack to lightweight service-oriented architecture is planned. The bank has also standardized that information exchanges internally between systems will be through a common layer and ESB has provided the platform for the same. It has also met the objectives of faster project roll outs, lower costs and lower testing and development efforts.

RBL Bank

Innovation: Digitization of Sales Process

SBI Life Insurance found that end-to-end sales through tablet not only has the potential to drive revenue growth with real time access to sales information at the right place and time but also improve efficiency by simplifying the sales process. It also wanted to differentiate the customer experience with a visually appealing sales interface and client insight which led to the conceptualization of Connect Life. It is an end-to-end digitization of the entire sales process – generating the benefit illustration, filling of proposal form, completion of payment

process and document upload in a totally paperless approach. It is a totally in house development. The company first initiated a pilot with 25 select insurance advisors who were hand held and supported in the use of the application. Post the successful launch of the pilot Connect Life was institutionalized with1258 advisors given tablets with Connect Life installed and top performing unit managers (who manage the advisors) were given tablets. BYOD was also encouraged.

SBI Life Insurance

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FINANCIAL INNOVATIONS - Banking Frontiersbankingfrontiers.com/finnoviti/wp-content/uploads/2015/01/... · FINANCIAL INNOVATIONS. BANKING FRONTIERS FINNOVITI 2015 3 ... As a pilot