OPEN BANKING ARCHITECTURE

Open Banking Architecture

Mayank Mishra
Principal Banking Architect
Oracle Asia Pacific


 

                                                                                               

 

                                                   

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served.

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Emerging Banking Trends
New Areas of Opportunities
Retail
-

Fee based Income (Mutual funds, Banc assurance)
Mobile Banking
Processing efficiency in Account Origination
Financial Needs Analysis (life cycle driven)
Payments Hub

 

                                                                                               

The ‘Unbanked’
- Microfinance Initiatives
- Distribution through Partnerships (postal, retailers)
- Pre-paid cards to
reduce the Risk
                                                   
- New segments – Farmers, Students, tourists

 

Corporate & SME
- Maximize cross sell across verticals
e.g. Trade - Treasury, Cash - MM, Custody - Treasury
- Vendor Financing – Converging Cash & Trade
- Structuring custom Loans – Risk adjusted pricing
- Liquidity management, Sweeping

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served.

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IT Reality - Without an Architecture !
Integration problems -> in-flexibility, high cost, high risk

Customer
Information
System

General
Ledger

Data
Warehouse

Current & Applications & Data
 Fragmented
Consumer
Corporate
Savings
Banking
Banking
Accounts Business Processes, Visibility
 Fragmented
  Fragmented Security and Management
 Complex, unmanageable environment
Trade
Treasury
Private
Insurance
finance
 Unscalable,
Costly environment
                                                                                               

 

                                                   

Banking

Branch network

Call centre

ATM
Network

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served.

Internet
Banking

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Framework for Customer Service Delivery
Banking Eco System – Leveraging all

m
st ge
Co ana
M

                                                                                               

Sales Unit

E Pr
En ffic oc
ric ie ess Service Unit
hmncy
en &
e
plianc
t

 

                                                   

Pe
e rform
a
tMan
nc
ag

Collaboration

e
m
en

Bank’s
Product
usiness Unit

Customers

t
en

 

C
u
s
t
o
mer
S
a
t
i
s
f
actio
n

Partner
nks & Agencies

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e
v
e
R
ation
r
e
n
Ge

Com
ess
Readin

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served.

Regulators

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Agenda – Banking Architecture

• Business Demands & Trends
• Architecture Approach
• Ideal Banking Architecture
 

                                                                                               

 

                                                   

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Purpose of an architecture
To allow IT strategy to align with the business strategy
Regulators
demanding
greater
transparency
and accuracy

Channel
optimisation and
profitability
analysis

IAS, Capital
Adequacy
requirements
being adopted in
varying degrees

Administration
and training
costs; closing
the strategyexecution gap

Corporate
Governance

Customer
Management

Risk
Management

Human
Capital

Control and Customer focus
while reducing the Cost and Complexity
Optimize

Maintenance costs; time to market, new
products; multi-channel integration

Core Systems
Optimisation

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Key objectives from IT Investments!!
Getting value from IT
Better Cost allocation

- Minimal Capital expenditure
- To tie the costs to business value delivered
- Leverage technology to minimize capital investment
- Lower operations risk by reducing manual
exception handling
- Reduce cost of internal & external change

 

                                                                                               

Competitive Advantage by Business Agility

- Products & services innovation at affordable price
- Easy Integration of partners into the banks portfolio
- Reduce cost of change by configuring products &
Services, no expensive IT delivery cycles
- Support Business in BPR & automation initiatives
- To enhance the customer service

Technology Independence & Re - Use

- Capability to enrich the satellite systems in
the bank

- Leverage on SOA to have shared services
Infrastructure
                                                   
- Real time environment, reduce batch windows
- Reduce Vendor Risk, go Open systems
- Collaborate, promote Open finance initiatives

 

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served.

8


Architecture Selection Criteria

Future Proof your Investments
• Architectural longevity (the changes in technology and
fortune that the platform will undergo during the next
three to five years)
• Availability of skills (from lower cost of ownership as well
as lower inertia point of view)
 
• Level of integration required (the amount of system
integration work the customer is required to do)
• Manageability: Planning downtime, partitioning, capacity
on demand, workload management
• Market momentum: Independent software vendor (ISV)
and channel enthusiasm, market share, demand creation

                                                                                               

 

                                                   

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Evolution of computing Infrastructure

 

                                                                                               

 

                                                   

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served.

10


Agenda – Banking Architecture

• Business Demands & Trends
• Architecture Approach
• Ideal Banking Architecture
 

                                                                                               

 

                                                   

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served.

11


Moving Away from a product-focused design
To a Reusable Design
Legacy Business Model
Deposits

Loans

Cash

New Services based Business Model

Treasury

Product
development

Product
development

Product
development

Product
development

Reporting

Reporting

Reporting

Reporting

 

Interest/Fees Interest/Fees Interest/Fees Interest/Fees

                                                                                               

Deposits

Cash

Treasury

Product
Development
Reporting
Interest/Fees

Accounts

Accounts

Accounts

Accounts

Accounts

Facilities

Facilities

Facilities

Facilities

Facilities

Payments

Payments

Payments

Payments

Payments

limited flexibility and re-use with
ever-increasing maintenance costs

Loans

 

                                                   

provides business, process and data
components that are re-useable
across product lines

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served.

12


Processes Automation, Efficiency & Enrichment
Gaining Business Agility

Many advantages

Automate mundane processes

 

Reconciliations
Exception management

                                                                                               

End to End Process Efficiency
Loan origination
Credit Card approvals
collections

Open Finance

 

BPEL is the future of the
                                                   
integration space in my view…
Why? Because the value is so
much higher when you provide
not only a way to integrate
applications, but also a way to
create services from them and
put them into business
processes

Collaborate to offer attractive products

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served.

- John Rymer, Vice President,
Forrester Research, Inc.

13


Customer Centric
Understanding the customer better
Targeted Marketing for better
results
Readiness for compliance
(KYC)  

 

                                                                                               

Understanding life-cycle
requirements
Understanding Customer –
Customer relationship

Siebel

Chordiant

                                                   

BroadVision

E.piphany

PeopleSoft

SAP

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served.

Legacy

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End-to-End Insight

Siebel Analytics Integrated To Oracle FSI Analytics

(OFSA)

A banker asks . . .
 What products are most profitable to sell to
whom?
 How to better hit our targets?
 How to improve wallet share?
 Where are organizational bottlenecks?

 

 

 What is our Risk Adjusted Return?

                                                                                               

                                                   

Pervasive Insight from the Back office to the Front
Profitability
Analytics
Multi Dimensional Profitability
Activity Based Costing
Transfer Pricing

Risk
Management
Risk Assessment/
Quantification

• Credit
• Operational
• Market

Operational &
Financial
Analytics

Performance Scorecards
Operational Cost Analysis
Bank Performance Analytics

CRM
Analytics
Interaction History
Customer Behavior
Segment Migration
Propensity to buy

Regulatory Compliance

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served.

15


Cost Management
Improve IT asset Utilization

Centralize the Operations
Simplify Support and Reduce Cost

 
Consolidate
Hardware to a GRID  – on demand
                                                                                               

                                                   

Bring Branch processing to the center
Reduce hardware investment and software
licenses
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served.

16


Well defined Architecture
Call
Center

ATM

Internet

IVR

Corporate
Channel

Branch

Partner
Channel

Access Channels

Collaborative Access Management
Business Process Orchestration & Management
Integration Management

Lending,
Deposits
&
Accts

 

                                                                                               

Trade
Finan
ce

Cash
Mgmt

Treas
ury

Cards
&

Switch

Invst
Mgmt

 

Partner
Management
Customer
                                                   
(Suppliers,
Relationship
Management
Management
counterparti
es)
Customer
Information

Transaction Functions

Enterprise GL
Management Information
Risk Management
Data Management

Support Functions

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served.

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Fusion Architecture - All encompassing
Technology Superiority

 

                                                                                               

 

                                                   

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served.

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Thank You

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served.
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