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Visit TCS at Stand 1327
Experience certainty. IT ServicesBusiness SolutionsConsulting
2015 Number 24
Societe Generale SecuritieS
ServiceS
plus n PostFinance Switzerland n Axis Bank India n Bank Yahav Israel n BSP Fiji
TCs BaNCs supporTs lauNCh of paN-EuropEaN CusTody plaTform
Visit TCS at Stand J34
2
We had the Agriculture Economy, the Industrial Economy and the Knowledge Economy, fol-lowed closely by the Internet Economy and now the Digital Consumer Economy. Each successive era has had a profound impact on people, orga-nizations and countries.
In each era, an understanding of “The Art of the Possible” has allowed some businesses to flourish.
Transition from one era to the other always involves disruption to the norm. The worrisome factor today is the pace at which changes are taking place. What the Internet Economy accom-plished in a decade, the Digital Consumer Econ-omy has already done, or will complete doing, within the space of a few short years.
By N Ganapathy Subramaniam President, TCS Financial Solutions
disruption and the Innovator’s Dilemma
Overcoming the adoption angst in the digital economy
viNtAGe DilemmAMost organizations evolve their systems over time by accu-
mulating and embedding business rules, processes, checks
and balances, data flows and workflows. The people who
have developed and maintained these systems are highly
knowledgeable of the businesses, policies, procedures,
rules and regulations of their respective organizations. Yet
for this entire generation of system builders, retirement
looms in the not-so-distant future.
The vintage landscape has been abused over time and
organizations have been managing its evolution. Systems
have been tweaked to do much more work than they were
intended for by design, they have been enabled for online
business, and all these factors have led to tremendous vol-
ume growth. It is amazing to see that these systems have
been able to scale, and in some cases, last year’s peak is
becoming this year’s average.
Concerns abound: How long can these vintage systems
cope with the increased volume of transactions? Are they
still fit for purpose? What will happen when the system
builders retire? How will these systems meet the needs of
the Millennial generation and beyond?
At the same time, it should be noted that these legacy
technology platforms maintain the “Systems of Record” for
business transactions. They have served their purpose for
years, and remain relevant in keeping the business going.
Yet “Systems of Record” are not sufficient by themselves in
today’s context
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SYStemS oF eNGAGemeNtIn the digital consumer economy, customers have unprecedented
choice. They have more access to information and are in a posi-
tion to negotiate the best deals real time. Customers want to be
understood, and they must feel understood. This certainly calls for
action from businesses to build technology that can help employ-
ees better understand their customers’ needs, facilitate proactive
engagement and above all, be quick and agile to deliver value and
relevance.
This new breed of technology goes beyond “Systems of Record”
to deliver “Systems of Engagement.” Going beyond client reten-
tion, increasing the share of wallet, and other similar metrics, these
“Systems of Engagement” pave the way for creating new business-
es based on entirely new business models.
What the Internet Economy accomplished in a decade, the Digital Consumer Economy has already done, or will complete doing, within the space of a few short years.
“
”
FeAr oF DiSruPtioNNew players such as Uber, Airbnb and mobile-only banks are us-
ing disruptive business models based on digital technologies
to disintermediate the norm, and these new players are setting
benchmarks for agility. Accordingly, those (traditional) businesses
that do not change and calibrate their business models with equal
rapidity are losing ground.
In most organizations, the top leadership is in deep thought,
and ‘exploiting digital opportunities’ has become a boardroom
topic. Most leaders recognize that disruption is coming, and are
taking active steps to defend themselves, whether by attempting
to slow the incursion of new players or by leapfrogging their tech-
nology. There are some in the myopic minority who focus only on
incremental revenue or on the profit curve, but those executives
are exceptions to the larger trend. True leaders are aware of the
threat of disruption, and are doing something about it.
To survive in the Digital Economy, you need to do the following:
l Implement a strategy to drive operational efficiency, keep low-
ering cost per transaction of servicing the business.
l Listen to the voice of customers and implement a strategy to
Win, Serve and Retain Customers. This might mean cooperating
with Fintech companies or even selling competing products.
Yes, there will be adoption angst and fear of disruption. It is
not sufficient to hire fresh talent like data scientists and customer
experience gurus. Instead, what is needed is for organizations to
cultivate the ability to reimagine their businesses, and to integrate
them in a team that will retain and extend the wisdom of the past.
Time is of the essence in re-imagining our businesses and
bringing the power of Digital technology to bear for our
respective customers. n
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For any inquiries: email: [email protected] Phone: +91 80 6725 6963
from the editor
Our distinguished colleague Nick Scott was recently interviewed by
International Securities Services magazine (ISS-MAG.com) for a Sept.
18, 2015 article titled: “What next for digitisation?”
Reading the article, it occurred to me that Nick touched upon
many of the themes in this issue of the TCS BaNCS Customer
Newsletter.
Nick: “We are already seeing a shift toward more integrated structures
and operating models.”
On page 6, we interviewed executives from the Global Banking
and Investor Solutions (GBIS) division of the Paris-based universal
bank Societe Generale, one of Europe’s largest financial services
organizations. The Societe Generale Securities Services business of
GBIS is developing a single international custody platform to pro-
vide customers with the same corporate action processing, cash
management and overall functionality throughout its pan-European
network.
Nick: “For the past 20 years, product-driven platforms and operating
models were considered critical to driving product differentiation, but
with the emphasis on greater interoperability silo models are being re-
viewed and shifted into shared service utilities that leverage a common
set of systems and data.”
On page 10, we feature Switzerland’s PostFinance, which migrated
its core banking and treasury solutions onto a single standard imple-
mentation of TCS BaNCS. This will enable PostFinance to reduce the
number of interfaces while providing uninterrupted operations for
its retail and business customers.
Nick: “To a notable degree the larger economies and capital markets
have greater volumes and hence the necessity of digitization has been
the greatest. Emerging markets have had the opportunity to implement
best practice regulatory and IT models for many years.”
On page 12, we describe how Axis Bank, India’s foremost “next-
generation” bank, has launched a powerful Enterprise Payments
Hub that will ultimately act as a single platform for all electronic
and physical payments, all channels and all customer segments.
Axis Bank has already achieved significant benefits in terms of reduced
costs, higher volumes, faster time-to-market and improved customer
services. The next phase will further enhance the digital capabilities of
the bank toward technological leadership at a global level.
In this issue, we also share the exciting news (page 20) of an ex-
tended agreement for the end-to-end deployment of TCS BaNCS
at Bank Yahav in Israel for core banking and capital markets; and a
core-banking go-live at BSP Fiji, one of the largest banks in the South
Pacific.
TCS BaNCS has over 300 customers around the world doing some
of the most innovative work in financial services. We are proud to
support their ongoing efforts, and anticipate the continued mutual
success of our partnerships with them.
Dennis Roman
Editor-in-Chief and Vice President
TCS Financial Solutions
954 423 3560 office
954 806 6660 cell
https://www.linkedin.com/in/marketingasitshouldbedone
lett
er
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2 Disruption and the Innovator’s Dilemma NGS on overcoming the adoption angst in the digital economy
6 Societe Generale Securities Services TCS BaNCS supports launch of pan-European custody platform
10 PostFinance Leading Swiss retail and business bank consolidates onto TCS BaNCS
12 Axis Bank Innovative bank first-to-market in India with Enterprise Payments Hub
17 Algorithmic Trading TCS BaNCS allows traders to develop and execute their own algorithmic trading strategies
20 News Bank Yahav first in Israel with TCS BaNCS, and BSP Fiji in core banking upgrade
21 TCS Innovation Forum Banking industry innovators speak at invitation-only event in New York City
22 Events Digital Banking Summit, World Forum of CSDs, TSX Equities Trading, and TCS #1 in FinTech 100
contents
About TCS Financial Solutions TCS Financial Solutions is a strategic business unit of Tata Consultancy Services. Dedicated to providing business application solutions to financial institutions globally, TCS Financial Solutions has compiled a comprehensive product portfolio under the brand name of TCS BaNCS. Our mission is to provide best-of-breed solutions that drive growth, reduce costs, mitigate risk, and offer a faster speed to market for our customers. TCS Financial Solutions delivers state-of-the-art software solutions for the banking, insurance and capital markets industries worldwide. For more information, visit us at www.tcs.com/bancs
About Tata Consultancy Services LTD (TCS)Tata Consultancy Services is an IT services, consulting and business solutions organization that delivers real results to global business, ensuring a level of certainty no other firm can match. TCS offers a consulting-led, integrated portfolio of IT, BPS, infrastructure, engineering and assurance services. This is delivered through its unique Global Network Delivery Model™, recognized as the benchmark of excellence in software development. A part of the Tata group, India’s largest industrial conglomerate, TCS has over 324,000 of the world’s best-trained consultants in 46 countries. The company generated consolidated revenues of US $15.5 billion for year ended March 31, 2015 and is listed on the National Stock Exchange and Bombay Stock Exchange in India. For more information, visit us at www.tcs.com.
Copyright © 2015, TCS Financial Solutions. All rights reserved. No part of this publication may be reprinted or reproduced without the written permission from the editor. TCS BaNCS newsletter is provided to clients and prospects on a regular basis. TCS Financial Solutions disclaims all warranties, whether expressed or implied. In no event will TCS Financial Solutions be liable for any damages on any information provided within the magazine. The information is provided to outline TCS BaNCS general product direction. The editorial is to be used for general information purposes. The development, release, and timing of any features or functionality described for TCS Financial Solutions products remains at the sole discretion of TCS Financial Solutions.
From its inception, TCS BaNCS newsletter has been printed on paper from environmentally responsible sources.
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Societe Generale towerS in PariS: ©
Benoît roland didier rolland, Bruno PriGent: © Peter allan, carloS Go ncalveS: ©
reGiS corBet
Societe GeNerAle SECURITIES SERVICESSociete Generale executives describe their recent TCS BaNCS implementation
The Global Banking and Investor Solutions
(GBIS) division of Societe Generale brings to-
gether Corporate & Investment Banking, Asset
Management, Private Banking and Securities
Services businesses, focusing on long-term
relationships with corporates, financial institu-
tions, public sector clients, wealth managers,
and high-net-worth Individuals.
At the core of Societe Generale’s universal
banking business model, GBIS is a leading
international player present in 53 countries
with more than 18,000 professionals servicing
clients.
Within GBIS, Societe Generale Securities Ser-
vices (SGSS) provides a full range of securities
services that are adapted to the latest financial
markets and regulatory trends. Its ambition is
to be the reference partner in its main markets,
recognized for service quality and competitive-
ness, agile solutions and international network
coverage.
SGSS provides custody and trustee services,
retail custody services, liquidity management,
fund administration and asset servicing, fund
distribution and global issuer services.
Its clients are institutional investors (insurance
companies, pension funds, governmental orga-
nizations and international organizations), as-
set managers, financial intermediaries (brokers,
investments banks, private banks, commercial
banks) and corporates.
cove
r sto
ry
QcArloS GoNcAlveS, Global Chief Information Officer, GBIS
Please describe how your vendor selection process led you to select TCS and TCS BaNCS.TCS was chosen for its corporate actions solution from TCS BaNCS follow-
ing a competitive RFI/RFP process. The main aim was to help SGSS con-
vert corporate actions from a semi-manual back office activity to efficient
straight through processing. The main criteria for selecting the IT solu-
tion partner were product coverage, scalability, implementation speed,
ability to work collaboratively with Societe Generale teams in France and
India as well as being competitive on cost. TCS’ commitment to delivery
proved to be crucial over the first phases of the project to keep up mo-
mentum behind the project.
TCS is very active in financial services and given its track record and
the quality of the organization, the decision to go with TCS was relative-
ly straightforward. TCS is also a strategic supplier for Societe Generale’s
Global Transaction Banking and Payment Services and has helped So-
ciete Generale to create Cash Europe and Cash Asia platforms. TCS has
provided a robust support for these platforms for more than 10 years, and
over this period, we have built mutual trust between the two organiza-
tions. In addition to the strong functional solution offered by TCS BaNCS
for SGSS’ requirements, this was also one of the factors in the decision-
making process.
How would you describe the quality of SGSS’ interactions with the team at TCS Financial Solutions, and how did the relationship evolve over the course of the project?Demonstrated commitment to delivery, with the commitment to GBIS
from TCS Financial Solutions’ management, has been the basis for the
scope of services from TCS to grow beyond the initial engagement.
As the project progressed, we built a strong relationship based on mu-
tual respect, trust and co-operation, which has seen TCS Financial Solu-
tions moving from purely a software provider role to a trusted advisor,
allowing GBIS to make the most of their insight, expertise and support,
while laying the foundations of a future strategic partnership.
Q
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Societe Generale towerS in PariS: ©
Benoît roland didier rolland, Bruno PriGent: © Peter allan, carloS Go ncalveS: ©
reGiS corBet
Societe GeNerAle SECURITIES SERVICESSociete Generale executives describe their recent TCS BaNCS implementation
BruNo PriGeNt, Global Head of SGSS
Prior to the deployment, what were the main challenges and opportunities for SGSS?Our clients are working in an increasingly international environment
and for this reason seek a unique supplier capable of answering all their
needs. Faced with this evolution, and following the example of what we
have already done for fund administration, we made the strategic de-
cision to develop one unique international custody platform to further
meet our clients’ needs.
What were the gaps to be addressed through a technology solution?It’s not a question of gaps, but more about building a platform to meet
our strategic objective to provide the same corporate action processing,
cash management and overall functionality to customers no matter where
they are – Germany, Luxembourg, France, Ireland or the UK. This will allow
us to increase our network as a custody bank, and in particular create an
SGSS franchise for the UK and Germany to extend our reach in those coun-
tries. Developing this platform also means that we will be able to deploy to
other countries easily, quickly and with limited investment costs.
Q
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cove
r sto
ry
FrANck PhiliPPe, Chief Information Officer, SGSS
Please describe the scope and timeline of the deployment. TCS BaNCS has been retained to cover corporate actions, includ-
ing scrubbing/announcement capture and cash activity for custody
activities in France, Germany, Luxembourg, Ireland and the UK. This
solution is an important component of a more global project which
allows SGSS to have multiple entities on a European custody platform.
This project was launched in 2014, with the first go-live planned for
Q4 2015 on scrubbing/corporate action announcements. The custody
platform will be implemented in April 2016 in Germany, including the
full TCS BaNCS solutions for both cash and corporate actions. The UK,
Luxembourg, Ireland and France will be integrated on the same plat-
form during 2016 and 2017.
What challenges, if any, are there during implementation, and how are they being resolved?The decision to engage TCS itself was a challenge, as this is the first time
SGSS has launched a big project with a provider outside of Europe. What’s
more, the project has unprecedented scope and complexity for SGSS.
During the solution analysis phase, SGSS tried to promote optimal use
of TCS BaNCS functionality, while keeping customization to a minimum.
Redesigns have been done only when absolutely necessary for compli-
ance, such as for country-specific requirements. Limiting customization
was a great achievement since team members had to consider how their
own requirements could change to fit into TCS BaNCS’ generic set-up.
Finally, having project teams spread across multiple locations – Paris,
Nantes, New Delhi and Bangalore – was a real challenge to overcome.
This demanded thorough project organization, coordination and follow-
up. We took this challenge as an opportunity to further strengthen rela-
tionships across the teams with regular trips, catch-up meetings, dedi-
cated workshops and project events.
For our clients, this platform is a move to the very latest technology and operating environment.
“
”
Q
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At A GlANcecompany
Societe Generale Securities Services
headquarters
Paris, France
Business challenge
To launch a pan-European custody platform,
including scrubbing/announcement capture
and cash activities for custody activities in
Germany, Luxembourg, France, Ireland and the UK
Solution
Corporate Actions solution from TCS BaNCS
FASt FActSl Established in 28 locations worldwide
with 4,000 employees, SGSS is among
the top ten global custodians and the
2nd largest in Europe with EUR 3,971 billion
of assets under custody.
l SGSS provides custody & trustee services for
3,585 funds and the valuation of 4,103 funds,
representing assets under administration of
EUR 604 billion. (Figures at end June 2015)
l SGSS ranks among the European leaders in
stock option management.
DiDier rollAND, Global Head of Securities Banking Operations, SGSS
Please describe the expected technology environment, in terms of increased revenue opportunities, cost reductions, and strategic advantages.In terms of increased revenue, the new pan-European platform will allow
us to develop our business in new locations, especially in the UK and
Germany. There is also an IT cost reduction for SGSS from having a single
platform to cover different markets which will allow us to review and re-
fine our operating model.
Please describe the expected business environment.Our overall strategy is to develop a “hub and spoke” model where the
main processes take place in the hubs, while the spokes are client facing
and local. If we globalize processing, it will allow us to reduce costs, by
sharing development costs among the various clients of TCS who share
common regulatory challenges. Equally, sharing the platform across loca-
tions will allow us to reduce costs in IT support.
What strategic advantages does SGSS expect through the TCS BaNCS deployment?For our clients, this platform is a move to the very latest technology and
operating environment. It is an extremely flexible tool that can respond
to real-time requests from clients – who increasingly expect real-time
data delivery – and it will be able to adapt to future requirements. We al-
ready use this real-time model for fund administration and are confident
that it will also be effective in custody. The platform will also significantly
simplify things for clients in their interaction with SGSS. We think having
TCS BaNCS in place for custody will allow us to secure new clients, retain
existing ones, and win mandates in new locations.
What would you consider the most remarkable aspect of this deployment? BRuNO PRIGENT: We have been working on this project for a
little more than two years. From the start, this project has always re-
spected the initial schedule. The first step is the delivery of the scrub-
bing module this autumn, and next spring the custody hub will be
implemented in Frankfurt. We have a high level of confidence today.
If the timing is respected, this will be an excellent performance for all
the teams involved.
What is your overall feeling about your relation-ship with TCS and your TCS BaNCS deployment?BRuNO PRIGENT: The team spirit between SGSS and TCS is
excellent – it has underpinned good cooperation amongst all those
involved. Overall TCS has been consultative throughout, really listen-
ing to us, and understanding our challenges. n
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bank
ing
PostFinance Leading Swiss retail and business bank consolidates onto TCS BaNCS
By thomas Fink, TCS Financial Solutions
In June 2011, PostFinance, one of Switzerland’s leading finan-
cial institutions, announced that it would modernize its op-
erations with TCS BaNCS
At the time, the organization had been running on two
separate legacy platforms: one solution for core banking, and
the other for treasury operations, including foreign exchange,
money market and medium-term bond transactions.
By migrating both areas of the business onto TCS BaNCS,
PostFinance intended to reduce the number of interfaces
while providing uninterrupted operations for its retail and
business customers. “Our primary goal was the seamless
continuation of the business for our customers” said Ivo
Ledergerber, Foreign Exchange Trading, PostFinance.
The project team from PostFinance consisted of 10
employees, including two employees from the treasury
business. “After an initial period of getting to know the TCS
employees – and getting used to communicating in English –
the levels of cooperation in the team developed fantastically,”
said Ledergerber. “The onsite presence of TCS as well as visits
to the development center in Bangalore helped to create a
common understanding.”
The banking, treasury and foreign exchange domain exper-
tise of the TCS resources also contributed to the success of the
project. “We were continuously challenged with pin-pointed
questions and suggestions,” said Ledergerber.
The close partnership between PostFinance and TCS
enabled the combined team to execute a rapid transition to
the comprehensive TCS BaNCS solution in April 2014. “We
were able to execute the complete implementation during
one release weekend,” said Ledergerber. “All of the services
that we offer were available to our customers, without fail,
that Monday morning.”
Ivo Ledergerber, PostFinance
StABilitY AND SPeeDPostFinance maintains a standard implementation of
TCS BaNCS in order to facilitate the rapid deployment of
future software releases. At the same time, PostFinance has
developed a small number of add-on capabilities to support
specialty lines of business.
“We are convinced that we are going to achieve our
business goals with TCS BaNCS,” says Ledergerber. “Our
systems run faster and they are more stable now—since the
‘Go-Live,’ we haven’t had a single service interruption,” adds
Ledergerber.
The TCS BaNCS solution also improves the level of
usability for PostFinance and its customers. Through an
easy-to-use user interface, bank employees can access
higher levels of detail than previous solutions, perform
complex operations that were previously difficult to man-
age, and establish better controls over access permissions.
In addition, the flexibility of TCS BaNCS expands the pos-
sibility for product-line extensions.
In the coming years, PostFinance expects to continue
drawing upon the global experience and industry knowledge
of the TCS team. n
1111
FASt FActSl PostFinance Ltd, a business unit of Swiss Post,
is one of Switzerland’s leading retail financial
institutions.
l PostFinance has over 2.9 million customers,
including 309,000 business customers.
l As the number one domestic provider
of payment transactions, PostFinance handles
almost a billion transactions per year.
At A GlANcecompany
PostFinance
headquarters
Berne, Switzerland
Business challenge
To modernize its legacy payment
transactions and account management systems
Solution
Integrated TCS BaNCS banking suite including
payments, core banking, securities processing for funds
administration and securities processing
for foreign exchange and money market
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inte
rvie
wpa
ymen
tsAXiS
BANkInnovative bank first-to-market in India
with Enterprise Payments Hub By Nitin Sirohi, Principal Consultant, TCS Financial Solutions
Established in 1994 with liberalization of the country’s bank-
ing sector, Axis Bank is one of India’s first “new-generation” pri-
vate-sector banks. Since then, Axis Bank has become a “next
generation” bank and the third-largest private sector bank in
India, offering the entire spectrum of financial services to cor-
porates, SMEs, agricultural and retail customers.
India’s payment systems have been evolving at a rapid pace
since the passage of the Payment and Settlement Systems
Act of 2007. The Reserve Bank of India (RBI) has issued peri-
odic “Vision Statements” calling for increased financial inclu-
sion with proactive movement toward expanding the scope,
reach and reliability of modern payment and settlement sys-
tems. RBI’s efforts have been supported by institutions such
as the National Payment Corporation of India (NPCI) and the
Mobile Payment Forum of India (MPFI), lending support to
several structural and policy-level changes in the payment
landscape for the banking industry.
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Like so many other financial institutions coping with
accelerated business growth, Axis Bank had accumu-
lated or otherwise constructed numerous silo-based
applications related to payments. By 2012, this situa-
tion led to mounting operational constraints, service
limitations and cost drivers:
l Several existing payment systems were reach-
ing or exceeding their capacity limits.
l Slow performance became a bottleneck due
to soaring business volumes.
l Given an extraordinary volume of payments,
back-office staff was stretched thin due
to manually-intensive processes such as
reconciliations of payments sent via domestic
payment and settlement systems.
l Due to the large number of separate payment
silos, visibility into intra-day cash positions at
the central bank was delayed by over an hour,
making it difficult for risk managers to moni-
tor real-time liquidity.
l Branch staff were unable to give their cus-
tomers adequate levels of service with bulk
payments processing.
l IT maintenance had become highly complex
due to rapid evolution in market payments
standards and the advent of mobile banking.
The bank’s leadership recognized that the
situation was untenable given evolving market
conditions. Rapid economic growth was fueling
demand for higher-quality, higher-capacity pay-
ment products and services, and customers were
becoming increasingly aware about the alterna-
tives in the financial services marketplace.
In order to keep pace in this fast-moving mar-
ketplace expanding both in size and sophistication,
Axis Bank had to take quick and decisive action to
effectively deploy a modern infrastructure for ev-
erything related to its customers’ payments needs.
BuilDiNG the eNterPriSe PAYmeNtS huBIn response, and to its credit, the management
team decided to build a centralized payment
processing platform: an Enterprise Payments Hub
(EPH) for the bank’s entire payment operations.
EPH had to provide a single platform for all pay-
ment products, delivering enhanced service lev-
els to customers at high levels (>99.99%) of sys-
tem availability. Furthermore, EPH was to operate
separately from the core banking solution.
This architectural approach ensured that the
bank could accommodate new business require-
ments, new regulatory changes and the latest
innovations in payments independently of the
ongoing operations of its core banking solution.
Furthermore, the separation also served to mi-
grate the transaction processing workload away
from the legacy core banking solution onto the
high-capacity payments processing engine.
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paym
ents
EPH had to support:l All electronic payments: Electronic credit
transfers, direct debits and bill payments
through India’s National Electronic Funds
Transfer (NEFT), Electronic Clearing System
(ECS) and Real Time Gross Settlement (RTGS)
systems; plus, cross-border payments.
l All physical payments: Cash and cheque
transactions using image-based clearing for
cheque truncation.
l All channels for payment origination:
Branches, internet, mobile, ATMs, POS, and
correspondent banks.
l All customer segments: Retail, corporate,
co-operatives, trusts, governments, semi-gov-
ernment institutions and correspondent banks.
l extensive connectivity: Multiple protocols
and data formats across a wide range of clear-
ing and settlement systems.
l iSo 20022: India had decided to adopt ISO
20022 for its RTGS and a new ACH.
As a core architectural decision, EPH was built
using services-oriented architecture (SOA). This
decision made it tenable to integrate EPH with the
existing core banking solution, as well as with vari-
ous existing channel solutions, alerting tools, bill-
ing systems and reporting systems.
StroNG collABorAtioNIn 2012, Axis Bank selected TCS BaNCS for Pay-
ments as the core technology supporting the en-
tire EPH project.
“Axis Bank’s EPH solution is a result of strong
collaboration between Axis Bank and TCS, across
leadership and operational teams,” said Amit Sethi,
President and CIO at Axis Bank. “Together we were
able to foster an environment for the teams to co-
create. The first phase of the EPH project began later
that year, with the intention of deploying individual
products and modules as they were completed. The
first roll-out began in April 2013, and successive de-
ployments are still underway at present.
Axis Bank has already rolled out capabilities to
support all electronic payments (NEFT, RTGS, ACH
and ECS) based on the high-performing payments
processing engine of TCS BaNCS. In addition, the
bank has deployed the branch channel capabilities
of TCS BaNCS, which now delivers robust and effi-
cient payments capabilities across all of Axis Bank’s
branches in India.
Axis Bank has also recently launched enhanced
services for payments initiation, monitoring and
reporting for business and corporate customers.
These services rely upon close integration be-
tween the corporate channel solution and the
payments processing engine of TCS BaNCS.
At this stage in the project, Axis Bank had
achieved many of the benefits envisioned at
the outset of the project. The bank has reduced
the number of silo payment applications, sig-
nificantly increased STP, boosted throughput,
achieved more efficient utilization of staff and
reduced operational costs.
Axis Bank’s EPH solution is a result of strong collaboration between Axis Bank and TCS, across leadership and operational teams. —Amit Sethi, President and CIO at Axis Bank
“”
Benefits have included:l improved governance: A comprehensive set
of payments-related workflows and processes
has been developed in a single library, with
high levels of reuse and built-in risk mitigation
features.
l improved Straight-through Processing
(StP): All transactions can be subject to com-
mon validation features and risk management
practices, irrespective of source.
l reduced processing costs: Changes related
to compliance and to the convergence of pay-
ment types can be implemented in a single
workflow repository.
l reduced legacy costs: By consolidating onto
a single payment hub, the bank has been able
to eliminate several silo payment applica-
tions, yielding significant savings on hardware,
licenses and interfaces.
l higher visibility of data: The ability to capture
consistent information about all payment types,
all channels and all customer types has made
it much easier to apply the latest thinking in
data analytics. Bank analysts can now generate
important insights from the data, leading to
smarter customer segmentation, faster product
development and new revenue opportunities.
l improved branch service: Bank branches now
support bulk payments initiation with rapid
confirmation and response times. Given process
improvements that have cut payments process-
ing times by more than half, personnel at the
branch have become more productive in other
areas of customer service.
l Better liquidity management: Risk managers
now have access to liquidity dashboards having
a significantly lessened lag time. Liquidity views
now consolidate enterprise-wide positions
within 15 minutes, enabling the bank to optimize
its cash positions at central bank accounts.
l Faster time-to-market: Axis Bank has devel-
oped several innovative payments products
using EPH’s powerful payment processing and
payment status reporting functions. For example,
Axis Bank has gone to market with a flexible “Vir-
tual Account Customer Payments” product that
enables corporates and certain banks to receive
payments using a virtual identifier through all
payments channels.
l higher volumes: From 2013 to 2014, Axis Bank
has seen a growth of approximately 33 percent in
NEFT (ACH) volumes, with EPH delivering seam-
less scalability. EPH has already passed a peak of
more than two million payments in a day.
715
The bank has reduced the number of silo payment applications, significantly increased STP, boosted throughput, achieved more efficient utilization of staff and reduced operational costs.
“”
16
paym
ents AXIS AT THE APEX
At the apex of all of these benefits, the development
of EPH has already helped Axis Bank win new busi-
ness and earn higher levels of customer satisfaction.
“The enterprise payment hub has enabled us to
provide cutting-edge features to our clients in the
domestic payments space,” said Shishir Mankad,
Head of Products & Solutions for Transaction Bank-
ing at Axis Bank. “We are able to empower our sales
teams to design and deliver highly customized
solutions across corporate, government, financial
institutions and SME segments. Moreover, with our
increased ability to handle volumes, we are able
to acquire and execute customer transactions un-
til much closer to the cut-off timings, and this is a
very powerful element of our service proposition.”
In July 2013, Axis Bank was appointed by India’s
Pension Fund Regulatory Development Authority
(PFRDA) to act as one of its Point-of-Presence ser-
vice providers for contributors to India’s pension
funds and to participating corporates.
In November 2013, Axis Bank acted as the finan-
cial services entity in a transformative e-Transfer
initiative taking place in three districts in the south-
eastern Indian state of Andhra Pradesh. Through
the initiative, farmers’ bank accounts are credited
within 72 hours of procurement, with notifications
delivered by mobile phone. For the farmers, this
service represents a tremendous improvement
over previous payment methods both in terms of
speed and convenience.
The second phase of the EPH project com-
menced in April 2015, and is expected to be com-
plete by end of year 2016. Deliverables in this phase
are expected to include support for image-based
cheque truncation at the branch, cheque printing
and demand draft printing; as well as business ser-
vices such as positive pay, corporate bill payments
and international payments, all made available
through a TCS BaNCS solution for customer chan-
nels that delivers EPH capabilities through appli-
cations that work seamlessly across Internet and
mobile.
“The EPH solution is integrated with TCS
BaNCS’ payments processing engine, branch chan-
nel, and corporate service channels. It provides
best-in-class availability and scalability, enabling
our teams to operate with high efficiency and al-
lowing them to focus on new products and ser-
vices for our customers,” said Sethi from Axis Bank.
“Within a year, the platform has successfully scaled
to support payments transaction volume growth
of more than 30 percent. With modern technology
and best of standards like ISO 20022 and SOA at
the core, EPH platform is a key enabler of our con-
tinued growth in the digital world.”
With EPH built upon the foundation of TCS BaNCS,
Axis Bank now has the payment capabilities it needs
to meet the needs of a fast-growing marketplace,
exceeding the expectations of its customers. n
At A GlANcecompany
Axis Bank
headquarters
Mumbai, India
Business challenge
To build a centralized payment processing platform
for the bank’s entire payment operations
Solution
Enterprise Payment Hub (EPH) built with
the payments processing engine of
TCS BaNCS for Payments, in conjunction with
the customer channel solution of TCS BaNCS
FASt FActSl Axis Bank is the third-largest private sector bank
in India, with 2,589 branches and 12,355 ATMs
across the country.
l Axis Bank has overseas operations with branches
in Singapore, Hong Kong, Dubai International
Financial Centre, Colombo and Shanghai; and
representative offices in Dubai and Abu Dhabi.
l With its Shanghai branch, Axis Bank became
the first Indian private-sector bank to establish
a branch in China.
17
“Quants” have transformed the trading floor.
Algorithmic Trading continues to trend upward, to the
point that global traders now measure the maturity of a mar-
ketplace in terms of its ability to execute algorithmic trades.
According to Celent estimates, algorithmic trading represents
70 percent of trading volume in developed markets and 25
to 30 percent in emerging markets worldwide. India, which
only began to allow algorithmic trading in 2008, has quickly
moved up the ranks with algorithmic trades at 30 percent of
total trades on Bombay Stock Exchange (BSE) and 46 percent
on National Stock Exchange (NSE).
Established marketplaces now face immense pressure to en-
able and attract algorithmic trades. Today’s traders are equipped
with smart order routing technology to more easily reach
alternate trade venues, which means that liquidity can quickly
migrate to marketplaces that execute algorithmic trades.
In response to the fast growth of algorithmic trading,
buy-side and sell-side market participants now require ever–
changing levels of sophistication with their own algorithmic
trading and smart order routing capabilities.
Moreover, sell-side traders are being asked by institution-
al clients to supply the requisite tools to function in a fast-
moving marketplace. Sophisticated clients with trading
operations of their own require direct market access (DMA).
They need to craft advanced algorithmic trading strategies
that tap into their own insights and approaches to the mar-
ket. They need to be fully supported by advanced order man-
agement capabilities that route orders to the most appro-
priate marketplace. For their own operations, they need full
integration with their internal systems for risk management,
compliance and other critical back-office functions.
For the buy side, viable participation in the markets de-
mands a high level of performance across several dimensions
and the sell side is expected to deliver the same. Accordingly,
providers of algorithmic trading solutions must be able to
empower the sell side with a comprehensive toolset that en-
ables the following:
l Consistent execution
l Low impact on prices in the market
l Low-cost trading
l Anonymity to the extent possible
l Flexible technology with full integration
l Support for regulatory compliance
These are merely the fundamentals. Yet it’s not enough
to have a working solution that delivers high-speed, low-
impact, low-cost and anonymous access to the marketplace.
On top of that, traders need an edge.
Traders need the flexibility to develop a viable trading
strategy that suits their portfolio, trading style, risk limits and
objectives. With any trading style, algorithmic or otherwise,
traders need to know that their strategies are as unique as
possible and that they’re not cookie-cutter variations of
strategies being used elsewhere. These strategies have to
generate higher returns than the market indexes, drawing
upon traders’ specific skills and competencies.
Traders expect to be hands-on with their trading strategies,
and that’s why traders are asking to work with the details be-
hind their algorithms.
TCs BaNCs algoriThmiC Trading solutions
TCS BaNCS allows traders to develop and execute their own algorithmic trading strategies
By rabindra mohapatra, Consultant, TCS Financial Solutions
securities
18
secu
riti
esTCS BaNCS fOR SECuRITIES TRADINGThe Securities Trading solution of TCS BaNCS addresses three
of the biggest issues for traders:
1. Rapid deployment of standard “black-box” algorithms
2. Custom development of “white-box” algorithms
3. Low-latency trading using high-performance computing
(HPC) architecture
1. “Black-box” algorithms allow traders to execute program
trades without having to know the details of the underlying
algorithm. In many cases, this is sufficient, as a wide variety
of black-box algorithms of varying complexity are available.
Furthermore, providers of algorithmic trading solutions can
optimize their standard black-box algorithms, allowing turn-
key participation in the fastest-moving marketplaces.
The black-box approach is the simplest and fastest
way for TCS BaNCS clients to begin algorithmic trading.
Standard algorithms operate natively within a separate
“Algo Engine,” which integrates with TCS BaNCS for order
management or legacy systems if needed. The Algo
Engine includes a wide range of Execution Algorithms
and Arbitrage Algorithms developed by TCS and
extensively used by clients.
TCS BaNCS provides a real-time dashboard to moni-
tor the performance of black-box algorithms. Users can
input basic parameters to initiate trading strategies, and
also make real-time adjustments to those parameters. By
contrast, many other algorithmic trading engines in the
marketplace operate on a “fire and forget” basis.
2. “White-Box” algorithms enable traders to create their own
proprietary algorithms from scratch, or build upon a com-
prehensive set of standard black-box algorithms. Without
being limited to the standard trading strategies enabled by
black-box algorithms, traders can invent new approaches to
the marketplace, respond to new developments or evolve
quickly as former strategies lose their effectiveness.
In response to the heavy demand for white-box algo-
rithmic trading, TCS BaNCS has extended the Algorithmic
Trading capabilities of its Securities Trading solution to
encompass a full range of customizable trading strategies.
Using the Algorithmic Trading Workbench in TCS
BaNCS, traders can compose, back-test and deploy white-
box algorithmic trading strategies that monitor, analyze
and respond to market events. An advanced, built-in
monitoring and control mechanism supports iterative
refinement of trading strategies across all asset classes.
Trading strategies can evolve quickly along with market
conditions, while taking advantage of the unique capabili-
ties of traders and their firms.
3. low-latency trading employing hPc architecture en-
sures that trades are executed at exchanges at the extreme-
ly low latency required to compete in today’s markets.
Earlier versions of TCS BaNCS were designed for a
distributed environment clustered with servers. With
the evolution of more and more processing power on
single servers, and the programming paradigms shifting
to increased parallelism, TCS BaNCS was enabled to take
advantage of the latest HPC processors.
By harnessing the parallel processing capability of
modern HPC processors, TCS BaNCS users have been able
to reduce latency by 86 percent and double throughput
performance. With the higher clock speed and improved
micro-architecture, TCS was able to bring down the latency
by a factor of eight.
BuILDING BETTER ALGORITHMSTCS BaNCS for Algorithmic Trading enables clients to speed
the development of production-ready algorithms while en-
suring low-latency, top-quality order execution. The solution
has already delivered immediate tangible benefits to clients
in terms of performance improvement, larger trade volumes
and higher desk efficiency.
Key advantages of the Algorithmic Trading capabilities of
TCS BaNCS include:
l high scalability: Traders can use the standard algorithmic
trading strategies or develop their own trading strategies
based on shared data sources and algorithm libraries. In turn,
firms can boost throughput and trading volume without
having to increase the size of their dealing team, IT devel-
opment team, or back-office support staff. In fact, using
algorithmic trading, one TCS BaNCS client recently doubled
its execution volumes from buy-side clients without having
to expand staff or infrastructure.
l ease of deployment: TCS has extensive experience and
global resources to support deployments of TCS BaNCS for
participants throughout the securities industry. For existing
users of TCS BaNCS for Securities Trading, the latest algorith-
mic trading and DMA capabilities can be deployed without
changing the existing infrastructure or experiencing any
disruptions to the current business
l increased adoption: The ease-of-use of the TCS algo
strategies enabled one TCS BaNCS client to extend the use
19
of algorithmic trading across most of its trading floor, such
that algorithmic trading strategies now drive 80 percent of
its order flow.
l robust risk management: Built-in risk and compliance
checks ensure that trading strategies conform to a regulatory
environment that gets ever more complex by the day.
l reduced time to market: Off-the shelf, black-box algorith-
mic trading strategies can be readily deployed, tested and
rolled into production. Also, the Workbench allows traders to
create white-box algorithms using a powerful and intuitive
user interface.
l increased efficiency: Instead of handling manual tasks relat-
ed to order routing, compliance and risk management, traders
can focus on market strategy and algorithm development.
l improved customer service: Sell-side firms can provide
direct access to algorithmic trading capabilities with high
strategic value, which boosts customer satisfaction while
also reducing dealers’ workloads.
l reduced latency: TCS BaNCS drives low latency through
a finely-tuned application, OS and system architecture that
makes the most of the high-performance computing infra-
structure of the latest parallel processing technology. n
an algorithmic glossaryThe world of algorithmic trading has its own language.
There are two main types of algorithms: Execution Algo-
rithms, designed to minimize the price impact of large volume
trade executions by “shredding” orders into smaller parcels be-
fore sending them to the exchange; and Arbitrage Algorithms,
which read real-time market data based on tick signals and
then capture arbitrage opportunities as soon as they surface.
Orders are placed and modified with sub-millisecond latency.
Here are some of the strategies, approaches and technolo-
gies available in the Algorithmic Trading solution of TCS BaNCS:
dEsCripTioN TErm Execution Algorithm that breaks an order into several waves over a designated
time period, potentially with a range of parameters. Ensures a smooth spread of
executions over the period.
Execution Algorithm that breaks an order into several waves. Each wave is
weighted in size, according to a prediction of market volume at the specific time
of day. Predictions are based on historical data for each instrument involved.
Execution Algorithm that breaks an order into several waves, each calibrated to
correspond to a target percentage of the overall market volume.
Execution Algorithm that shows only small lots to the market at any given time.
Minimizes price impact for large-quantity orders.
Execution Algorithm that achieves execution for an order as soon as any favor-
able liquidity arrives on the market.
Takes liquidity (“pounce”) when adequate size is available in a specified price
range, otherwise passively supplies liquidity (“peg”).
Arbitrage Algorithm that places simultaneous orders for stock futures and the
underlying stocks.
Arbitrage Algorithm that places simultaneous futures order with one long and
one short contract having different expiration dates.
A smart application that gets the best price for buy/sell orders across available
exchanges.
Time-Weighted
average price (TWap)
Volume-Weighted
average price (VWap)
percentage of Volume
(poV)
iceberg
hidden
peg and pounce
Cash future arbitrage
long roll/short roll
smart order routing
(sor)
20
BSP, one of the largest and most successful banking organizations in the South Pacific, went live in September
2015 on the core banking solution of TCS BaNCS. The core banking transformation began two years earlier
following a period of pre-project planning and design. The migration took place over a single weekend.
Kevin McCarthy, BSP Country Manager, said that the new core banking solution will further help BSP real-
ize its vision to be Fiji’s leading financial services provider, helping customers, staff, shareholders and com-
munities prosper. “I am pleased to inform our customers that this investment will improve our customer’s
banking experience,” said McCarthy.
This major upgrade will equip BSP with the flexibility and robustness to roll out new products faster across a
wide selection of service channels.
“The upgrade of the TCS BaNCS platform will greatly enhance BSP’s use of the core banking system function-
alities, simplifying key processes and decentralizing operations to their front offices,” said Colin Sword, Country
Manager, TCS BaNCS Australasia. “This will make BSP’s core banking system one of the most current in the region,
better enabling the bank to deliver world class customer service to Fiji.” n
new
s
BANK YAhAvFirst deployment of TCS BaNCS in Israel
In March 2014, TCS entered into an agreement to provide
advanced core banking and capital market solutions to Bank Yahav.
Bank Yahav was established in 1954 as a bank serving government
employees and the public sector. The bank now specializes in retail
sector financial services for households and salaried employees.
The end-to-end TCS BaNCS deployment commenced in Sep-
tember 2014 with solutions for core banking, capital markets (en-
compassing both domestic and international securities) and the
bank’s general ledger.
In September 2015, TCS signed an extended agreement for
long term support, maintenance and operations of TCS BaNCS at
Bank Yahav. The deal size is estimated in the hundreds of millions
of dollars.
Shaul Gelbard, ceo of Bank Yahav, said: “This is a comple-
mentary agreement and an historic one in the Israeli banking sys-
tem. Alongside implementing the best in the world core bank-
ing system, the bank will also receive world class support and
operational services for our system. The services we will receive
from TCS will enable us to react quickly to changes in the banking
sector. This system will allow the bank to be more effective and
more competitive. “
David Ben-David, chairman of the Board of Bank Yahav,
commented on the selection of TCS: “We chose to partner with the
world’s leading banking software provider, who will set up for us
the most advanced core banking system in Israel. This is a strategic
project which is the biggest and the most important undertaken
by the bank since it was established. “
N chandrasekaran, ceo & mD of tcS said: “Israeli firms are
fast adopters of technology and in this context our engagement
with Bank Yahav is groundbreaking as it marks a new era of tech-
nology-driven core banking systems in Israel.”
N Chandrasekaran added: “TCS has been operating here for al-
most a decade and is committed to the Israeli market. TCS has plans
to significantly increase the company’s cooperation with Israeli start-
ups, in order to bring the Israeli innovation to TCS global customers.”
eyal moskal, country manager, tcS israel, said: “This is a ground-
breaking deal in the banking sector after years of tense expectation
about who will be the first bank to implement a global packaged
core banking system. We are delighted that Bank Yahav was the first
to make the quantum leap and integrate end-to-end core banking
system and global securities, resulting in dramatic improvements in
the benefits for the bank’s IT organization. The Israeli banking sector
still relies almost entirely on old legacy systems that are expensive to
maintain and that will require replacement in the near future.” n
New core banking solution for South Pacific banking leader
BSP FIJI
Left to right:
Gadi Davidian CIO, Bank Yahav
David ben David Chairman, Bank Yahav
N chandrasekaran CEO & MD, TCS
Shaul Gelbard CEO, Bank Yahav
eyal moskal Country Manager, TCS Israel
21
In April, at the TCS Innovation Forum in New York, TCS welcomed a distinguished panel to discuss
technology trends in financial services.
Panelists included Jay S. Sidhu, Chairman & CEO, Customers Bank (Wyomissing, Pa.); Paul Hlivko,
SVP of IT and Director of Technology Transformation at First Niagara Bank (Buffalo, N.Y.); Ram Akella,
Professor of Information Systems and Technology Management at University of California, Santa Cruz;
and Nicole Sturgill, Principal Executive Advisor, Retail Banking at CEB TowerGroup.
In 2015, TCS Innovation Forums were held in London, New York and Chicago. These very well-
attended events brought together senior technology executives, innovation practitioners and re-
searchers from leading universities, academia, VCs, and start-up partners from the TCS Co-Innovation
Network (COIN™) to discuss new age technologies affecting the global business landscape. n
tcS iNNovAtioN
FORUMBanking industry innovators speak
at invitation-only event in New York City
Panelists (from left to right):
K Ananth Krishnan, TCS
Nicole Sturgill, CEB TowerGroup
Paul Hlivko, First Niagara Bank
Jay Sidhu, Customers Bank
Prof. Ram Akella, Univ. of California Santa Cruz
22
even
ts
DiGitAl BANkiNG Summit 2015
TCS BaNCS demonstrates focus on omnichannel excellenceIn June, TCS was a Gold Sponsor at an American Banker event held
in Austin, Texas for heads of digital strategy, mobile banking, online banking,
security as well as alternative banking channels and emerging payments. n
WFc 2015
in meXico
TCS moderates panel on CSD innovationTCS BaNCS was a Platinum Sponsor for
the World Forum of CSDs, an annual
event for Central Securities Depositories.
WFC 2015 was held in Cancun, Mexico
and hosted by S.D. Indeval, a central
securities depository based in Mexico
City. The event welcomed 230 attendees
(including several TCS BaNCS customers)
from 80 countries, making it a flagship
event for CSDs to meet, learn, network
and collaborate.
At the event, R. Vivekanand, Vice Presi-
dent of TCS, moderated a panel titled
“CSD Innovation,” in which the partici-
pants were asked to make an overview
presentation of a new service or busi-
ness innovation recently implemented.
Panelists included representatives from
CSDs operating in Turkey, South Africa,
Colombia, South Korea and Europe. n
23
tSX equities trading conference 2015
TCS strengthens North American presence with sponsorship of Toronto eventTCS was a Silver Sponsor of the TSX Equities Trading Conference
2015, a forum for the Canadian investment community to
discuss current issues in the Canadian and international
equities markets.
The conference, held in Toronto on May 26th, 2015, was spon-
sored by TMX Group Ltd., the parent company of Toronto Stock
Exchange, TSX Venture Exchange, Select, Alpha and several oth-
er companies. TMX Group companies provide listing markets,
trading markets, clearing facilities, depository services, data
products and other services to the global financial community.
The conference provided attendees with perspectives on
Canadian capital markets, cyber and insider threats, the
evolving regulatory landscape, private markets and market-
place segmentation.
TCS delivered a presentation on TCS BaNCS in the capital
markets, including offerings in securities trading for institutional
and retail clients such as internet trading, high-speed trading,
mobile and tablet trading, dealer workstation, algorithmic trad-
ing and high-performance computing. n
tcS Ranked #1 in FinTech 100TCS recognized as a top vendor in the financial services industry for the eighth consecutive yearTCS was recognized as the leading global
financial technology provider in the 2015 IDC
Financial Insights FinTech Rankings Top 100.
TCS moved into the top position after being
ranked second since 2012, and maintaining a
top-ten ranking for the past eight years.
“We are extremely proud to be recog-
nized as the top technology provider in
the global financial services industry,” said
K Krithivasan, President, Banking and Financial
Services, TCS. “This is a result of our sustained
investment and innovation focused on our
customers’ business goals. We would like to
thank our customers, who have continued to
place their trust in TCS for all these years.”
“We congratulate TCS on reaching the num-
ber one position on the 2015 IDC Financial
Insights FinTech Rankings,” said Jerry Silva,
Research Director for global retail banking
research at IDC. “Their continued presence in
the top 10 on our rankings demonstrates their
success and positive impact on financial ser-
vices technologies globally.” n
BNP Paribas Securities set out toconsolidate custody operations.They found a certain way.
BNP Paribas Securities Services (BNP Paribas) is the leading European provider of securities services for fund managers, �nancial institutions and businesses. To keep pace with the ever-changing sector, BNP Paribas required real-time information in corporate actions. It needed a solution that would facilitate the management of all kinds of corporate events and also automate reporting of these events. Tata Consultancy Services (TCS) implemented the Corporate Actions solution from TCS BaNCS, an integrated product suite for �nancial services, to consolidate the global and local custody operations onto a single IT platform. As one of the world’s fastest growing technology and business solution providers, TCS enabled a high degree of standardization to upgrade business processes to support higher volumes, and facilitate the processing of 150,000 corporate action events in a year, thus pushing up STP alongside accurate client reporting and scaling up of their business.
