TCS Financial Solutions: Destination = growth – N Ganapathy Subramaniam
In turbulent times, banks can no longer expect to drive customer behaviour; their competitive edge is now predicated on how well they respond to consumer demand. N Ganapathy Subramaniam of TCS Financial Solutions outlines the new set of rules and opportunities that are signposting the roadmap towards growth.
Institutes at large have tightened their belts in the aftermath of the financial crisis. With the turbulence showing little sign of abating, banks are attempting to resolve a paradox - how best to drive innovation while retaining the necessary frugality?
"At any given point over the last few years, there has been a crisis somewhere in the world," says N Ganapathy Subramaniam, president of TCS Financial Solutions. "If you look at Europe, you had the sovereign debt crisis, and now there are problems in Greece and Italy. In the US, unemployment is a big issue. And in other parts of the world, there have been natural calamities. But business must go on, and institutions are looking, perhaps for the first time, at achieving growth in line with efficiency."
Balancing one against the other is no easy task, but it is imperative in today's unsettled marketplace. A new set of rules and opportunities have emerged, generating new paradigms for growth.
Customers in the driving seat
These rules are largely customer driven. No longer can banks afford to simply create new products and watch their customers fall in line - these days, an institution will sink or swim based on how well it caters to pre-existing demand.
"Banks are catching up in the game with the consumers," says Subramaniam, "and consumers are not just obeying the rules of the game here, but changing the game itself."
TCS Financial Solutions, which provides an integrated suite of solutions for financial institutions, TCS BaNCS, is well placed to comment on market trends. A strategic business unit of Tata Consultancy Services, the world leader in software development and deployment, its solutions are designed to enable transformation across the full range of banking services.
The TCS BaNCS platform encompasses a wide array of products. Each runs as a scalable service, increasing operational efficiency for the client. With banks, capital market firms and insurance providers within its remit, TCS boasts customers across 80 countries and an impressive overview of the bigger picture.
As Subramaniam points out, one clear manifestation of consumer-driven change is the digital revolution. With touch computing and social media now fixtures of everyday life, the onus is on banks to keep pace with developments in IT.
From the perspective of the tech-savvy customer, mobile banking is a must, facilitating almost all the services typically found in a branch. A few quick taps on an iPad can fulfil the same function as a time-consuming face-to-face interaction.
For the bank, meanwhile, increased digitisation comes as an opportunity to open up new modes of communication, with the big trend being towards channel integration.
"Clearly, people want to use different channels - the branches, the call centres, the ATMs, their mobiles," says Subramaniam. "But while many banks offer the convenience of different channels, for most of them, consistency of information is still beyond their reach. Most banks expect you to start and finish a transaction the same way, rather than initiating it, say, on the internet, shutting it down and continuing it through a call centre or your branch."
With channel integration, however, business transactions are simplified and this improvement in customer convenience comes as a marketable asset to the bank.
Of course, while new communication channels have their benefits, they require ever-greater vigilance against fraud. Banks are locked into something of an arms race against fraudsters, who are growing ever more adept at beating firewalls.
Institutions have therefore ramped up their preventative measures, with technologies such as biometrics and non-repudiation metrics helping to keep their data safe. Through adhering to best practice, banks can greatly reduce the risk of a security breach. This applies particularly to the new and thriving domain of social media. With around ten billion financial transactions having occurred on this platform to date, customer protection is a pressing concern.
"Regulators need to look at the digital revolution in a big way, ensuring that they are set up holistically to facilitate such an option and that the transactions are railroaded to safety," says Subramaniam.
An analytical approach
More broadly, with the explosion in data available to banks, organisations are asking how best they can analyse and protect that data. To quantify the trend, banks are now dealing with around 20 times more information than they were a decade ago, potentially rising to 30 times more by 2015. The ability to process it is shaping up to be a crucial component of delivering business excellence in the years to come.
Analytics and surveillance platforms are therefore starting to establish themselves as a critical foundation for growth. "We see banks and regulators investing heavily in these measures as a means of creating operational efficiency for the institution," says Subramaniam.
This is, in part, due to the demand for transparency sparked by the financial crisis. It is also tied closely to regulatory reform, with regulators requiring more and more information at a micro-level, and tighter surveillance being instigated on either side of the regulatory fence.
Most importantly, however, improved analytics means forging better solutions for customers based upon an understanding of their behavioural patterns. This leads not only to an enhanced client experience at every touchpoint, but to increased profitability for the bank.
If a bank, for instance, is sensitive to demographic data, it can supply a portfolio of solutions tailored towards different stages of a customer's life. "One of our clients in Australia has a strategy by which they catch their customers very young," says Subramaniam. "When the customer is a child, their banking requirements are minimal, so you give them what they need; then when they go to college you service them differently.
"When they start work, their needs change yet again so you move them to another brand and, finally, when they become an executive they really become your valued customer. So you need to be with them throughout their career to create that sense of loyalty; with Generation Y, loyalty for the sake of loyalty is not going to be there automatically."
It is also in a bank's best interests to flip its perspective and ascertain the customer's larger aim, rather than simply providing them with the product they have requested. "Let's say a customer comes in looking for a home loan," says Subramaniam. "A bank needs to understand that, actually, this customer doesn't want a home loan; he wants a home. You can become his trusted partner by product-bundling - providing an end-to-end service that matches his specific requirements."
It is through savvy, client-focused strategies such as these this that banks can foster both efficiency and growth. That, at any rate, is the message espoused by TCS, which provides solutions that are consistently ranked in top positions by independent industry experts.
"In terms of growth, banks are predominantly looking at emerging markets beyond their home countries," says Subramaniam. "They're asking: 'What kind of opportunities are there elsewhere, and what kinds of products need to be manufactured in specific segments?'
"But these new trends and paradigms we have discussed apply right across the board, both in emerging and more established markets."