Accelerating Financial Services Transformation

Transcription

1 Accelerating Financial Services Transformation Kumar S. Rao Vice President & Head, Cards & Payments Tata Consultancy Services Sydney's 6th Annual Technology & Innovation the Future of Banking & Financial Services November 2011 Copyright 2011 Tata Consultancy Services Limited 1

2 Changing expectations and demand 2

3 Barriers to innovation Traditional Barriers Complex value chain Legacy systems Switching costs, Status Quo bias Two-sided market effects Lack of global standards Ubiquitous Access Social Media Cloud Services Standards & Infrastructure 3

4 Confluence of factors Ubiquitous Access Smart phone proliferation Feature phones Tablet PCs Internet and WiFi All devices are internet connected 4

5 Confluence of factors Social Media Networks Explosive growth Communities and networking Information sharing and access Discussion groups and referrals Crowd sourcing Years to reach 50 m customers Radio 38 years TV 13 years Internet 4 years Facebook and ipod 3 years Google+ 88 Days 5

6 Confluence of factors Cloud Services Infrastructure as a Service Platform as a Service Developer platforms Software stores Software as a Service 6

7 Confluence of factors Ubiquitous Access Smart phone proliferation Feature phones Tablet PCs Internet and WiFi All devices are internet connected Cloud Services Infrastructure as a Service Platform as a Service Developer platforms Software stores Software as a Service Social Media Networks Explosive growth Communities and networking Information sharing and access Discussion groups and referrals Crowd sourcing Standards & Infrastructure Central Payments Infrastructure Real-time Payment Clearing Messaging Standards (ISO 20022) Mobile NFC Standards 7

8 Failed vs. Disruptive Innovations PAY BALANCE MENU LOCK / C x N * 0 # - + M = Pong - Never took off (c. 2005) Square - (2010) izettle (2011) Accept money from Bank account or Credit Card Another Ponger Send money to Another Ponger Cell Phone or MagStripe Card Mobile Point of Sale Paperless receipts Card Case Mobile wallet Voice activated Others: GoPayment, Erply Accepts EMV Card Mobile Point of Sale Signature Capture Paperless receipts Leveraging Software Platforms 8

9 Adoption Major areas of focus Impact PFM Universal Mobile Payment Cross Border Payment New Bank Model ewallet Micorpayment SMB Solutions 10 0 Digital Money Innovation Scenario Analysis Adoption Universality Convenience Value Cost Innovation Evolving Technology Evolving Standards 9

10 Financial services transformation by Apps on Platforms Accelerated Innovation Pervasive access to connected devices Software platform network effects e.g., PayPal X, IP Commerce Lab Significant apps already out there Building an Ecosystem Application Platform, Sandbox Service expansion Compensation to developers Develop community size Ecosystem alliances Competitive Dynamics Controlling the app store can control innovation Platform free for developers, revenue from users Several recent moves AMEX buys Serve, Sometrics VISA buys Cyber Source, Fundamo Master Card Labs, PayPal X launch Intuit s Workplace, acquisition of Mint Emerging VARs: Intaact, Accumatica 10

11 Virtuous cycle accelerating innovation Users Choice of Apps working seamlessly Developers Access to User Base Software Platform Examples iphone more than 100,000 applications PayPal X 25,000 Apps after 6 months Cheaper Apps Software tools SDKs and APIs Evangelists/ Consultants/ Collaboration Free for Developers 11

12 Software Platforms leveraged by Banks Popmoney from CashEdge US Bank Centric platform for FIs Multi-network payment processing APIs for Opening, Funding, Verification, Transfer Recipient ID: , mobile, account Money sent from online banking, recipient gets bank branded Bundle.com Launched in 2010 with funding from Citigroup and Microsoft Account aggregation and Personal financial management solutions Allows interesting comparisons with peer groups Roadmap for launching APIs 12

13 Implications - required Capabilities for Banks Imperatives Required Capabilities Be nimble and agile Innovative products, easy to learn and use Adaptive Systems Componentization, Configurability, APIs Stay close to the customer Customer centricity, Insight, Social Integration Software Platforms Developer services, Social Digital Platforms Focus on customer experience Integrated Self Service, Empowerment Advanced Analytics 360 View, Big Data, Analytics Integration Embrace collaboration Partner ecosystem, Involve customers Agile Solutions Cloud strategy, Digitization Remove boundaries Convergence of Card and Payment products Customer Loyalty and Adoption Context enriched services Strengthen risk management Fraud, Risk Mgmt, Authentication, Data security Risk Management/Security Integrated Fraud & Risk Management 13

14 TCS Research and Development BFS Innovation Customer experience Personal Finance Mgmt Mobile banking/payments Anywhere, anytime access Channel integration Integrated IT Solution GRC Reference Model & Tools Credit risk MI and reporting Customer Centricity Ubiquity GRC Enterprise KM Customer collaboration Social analytics High frequency trading VaR and Hedging solution Fraud detection TCO optimization Legacy modernization Data management Social Computing Capital Markets IT Themes Security and Id Mgmt Data Privacy Solutions Fraud Detection Rural banking Micro Finance Mobile agro advisory platform B2B, Online servicing Next generation payments Security Financial Inclusion Corporate Banking Service/Efficiency 14

15 Example 1: TCS Hosted m-commerce Platform 15

16 Products and Transactions Enrolment Example 2: TCS Financial Inclusion Solution Customer Customer Enrolment CIF Data Account Opening Photo and biometrics Enrolment Kit Laptop Digital Camera Finger Print Scanner Printer Personalized smart card Card Mgmt System Customer Rural Banking Cash Deposits Cash Withdrawal Funds Transfer Balance enquiry Mini Statement Micro Finance Loan appraisal Account opening Disbursement Repayment Other Rural Applications GPRS/GSM/ PSTN Rural Gateway d i gi t a l Cust & Acct Txns Core Banking System 16

17 Example 3: TCS BαNCS Payments Enterprise Payments Hub 17

18 Example 4: TCS Personal Finance Management Solution Account Overview Spend Analysis Payment Alerts News Feeds Goal alerts Event Calendar Peer Comparison Community Linkage Personalization 18

19 Example 5: Knome Leveraging the social web inside the enterprise 19

20 Example 6: Cubuzz Connected marketing 20

21 Thank You