Business Process Transformation in Banks

BPM as an Essential Technology in Banking

Businesses are realising that there is no one way tosupport enterprise architecture. Regardless of theapproach, it must facilitate change. The key is tocreate, not the perfect or elegant architecture forthe moment, but the most adaptable architecturefor the future.”

Julie Short, Research Director, Gartner

Newgen Overview- Company Snapshot

1100+ installations

1 of 3 vendors to feature in

Gartner MQs for iBPMS,

ECM & CCM

58+ Countries

200+ Partners

1600+ Employees

150+ Banking

Customers

Globally

40+Patents

World’s largest DMS

deployment with 9 Billion docs processed

Excellent rating for Case

Management - Gartner

Investors

Offices

Singapore

USA • Florida• Washington DC

Canada

UK

UAE

India• New Delhi• Mumbai• Chennai• Bangalore

Industry Recognition

2012 Impact Report

2013 ECM Wave

2011 Wave report for DOCCM

2013 Global Software Leaders Report

2011 Market Share Report

2014 Critical Case Management Capabilities

2013 CCM MQ, IBPMS MQ

2013,2012, 2011,2010,2009 ECM MQ Report

2012 BPMS Market Update Report, 2010 BPM MQ

2011 Retail Loan Origination Vendor Landscape Report

Good Condition and

Low Risk

Flexible and cost effective

Emerging market’s top 100

software vendors

No 1 in India Content

Management Market

Top 3 value for money2011 BPM Decision Matrix

Very Large Installations

Comprehensive Case

Management

2012 ECM vendor evaluation Report

Our Global Installation Base

Asia

Indonesia ChinaSingapore Hong KongPhilippines IndiaMalaysia JapanPakistan Thailand

Europe

Austria Germany Cyprus Lithuania Czech SlovakiaDenmark UKFinland

Africa

Egypt NamibiaGhana NigeriaKenya South AfricaLibya TanzaniaMauritius

The Americas

USABermudaCaribbeanMexico

Oceania

Australia New Zealand

Middle East

Bahrain OmanQatar Saudi ArabiaJordan KuwaitUAE

Our Global Customer Relationships

Banking

&

Finance

Insurance

BPO & Shared

Services

Government

Storage in DMS

Content Capture

ProcessingReporting & Monitoring

Customer Communication

Archive

Indexing

Collaborative

Process Design

Technolog

y

Execution

Real Time

Dashboard

Leading Indicators

Record Classification

Retention & Disposition

Physical Tracking

Long Term

Preservatio

n

End Customers

Design templates

Designer

Flat

Files

Spoo

l

Multiple

Application

Inputs

ECM & BPM Product Suite

Customer Quotes

“We found the BPM platform very useful to align our

business processes. It will give us a flexibility to

amend the business process and improve them

further.”

"The BPM solution, OmniFlow Suite, from Newgen

has enabled us to centralize a large number of our

processes, resulting in leaner and efficient branches.

Branches have been able to focus on sales while the

processing activities are moved to centralized back

office in Mumbai. The Turn Around Time (TAT) has

been significantly reduced, leading to better customer

experience.”

"We would like to thank Newgen for being

instrumental in customizing and integrating the key

initiative of Document Imaging and Management

solution in Credit Operations at RAKBANK. This

enables the bank to be more effective in handling

critical security documentation of loan customers."-

"“We chose Newgen over others owing to the

company's Document Management and Workflow

capabilities.”

Customer/ Partner Quotes

"In Newgen, we have explored a partnership with a truly

customer focused, young and promising company that is

hungry for getting better. Dow Jones and Newgen, have

experienced many successes together for workflow automation

and control, we expect many more using their BPM tools and

Professional Services that have always delivered on time and

within budget. Newgen suite of products that I've interacted

with has tremendous potential and flexibility to ensure agility

and match the speed of business operations”

“… Built on IBM Web sphere Application Server Newgen’s solution is optimized to ease administration in a

scalable deployment environment, this core J2EE configuration delivers a secure, high-performance transaction

engine for dynamic applications…”

“…with the availability of solution on Red Hat Enterprise Linux, customers are ensured that they are not trapped

by the vendor’s proprietary lock-in but at the same time ensure robustness and scalability. Implementation on

Linux platform makes the customer winner all the way by adding stability and low cost of ownership…”

IBM on Newgen’s Linux-based Solution, Partnered Solutions Portfolio

"The Newgen BPM solution allows us to closely

monitor time frames, while efficiently handling

burgeoning growth in number and complexity of

customer requests. This has been possible due to the

system's close integration with all other insurance

applications.”

AREAS IN BANKING

A typical scenario of Front and Back office setup in a Bank

Core Banking

An Approach to Change the Future……

Enablers of Change

Creating Milestone all the Way

13

• LIC•200 million customers, 4

billion pages archived, 2000 branches

Scalability

• ADCB•230% ROI over a period of

1 year for Customer Acquisition Process

ROI

• CITIBANK•Pioneer in SSC

•100+ processes (e-Serve) deployment by Citigroup itself

Self Sufficiency

• Ecobank

• Integration across Geographies with different versions and across client systems.

Integration

• FIC•700+ branches automated

in 2 years; 40,000 loans per month

Rapid Deployment

• Mashreq bank•55 processes across LOBs

implemented in just 8 months including New Business, Trade Finance etc.

Solution Extendibility

Banking Domain Experience

Retail

A/c Opening & Maintenance

Term Deposit Services

Customer Services

Customer Request Mgmt

Locker/Custodial Services

PoS A/c Mgmt…

Payment & Settlement

Fund Transfer

Remittance

PDC Operations

Interest/Dividend Warrants

Inward & Outward Clearing

SWIFT Virtualization…

Lending & Mortgage

Loan Originating

Loan Underwriting

Loan Servicing

Early Warning System

Collection & Disputes

Loan Takeover Mgmt…

Organizational

Audit/OR Mgmt

Contracts Mgmt

Corporate Finance

Vendor Services

Asset Mgmt

HR Processes …

Corporate/ Commercial

LC Issuance & Amendment

Bills of Exchange

Shipment Credit

Bank Guarantee

Commercial Loans

Corp Term Loans/Limits…

Credit Card & Third Party

Wealth Mgmt & Depository

Security Trading

Credit Card Issuance

Credit Card Servicing

Bancassuance

Utility Bill Mgmt…

Retail Banking

Applications DriversA/c Opening & Maintenance

• Competition for Deposits • Revenue Growth

• Geographic Expansion • Diverse customers retention • New Customer Acquisition

• SPOC – for customers • Increased Service delivery

mechanisms - Anytime, Anywhere Banking

Term Deposit ServicesCustomer ServicesCustomer Request

MgmtLocker/Custodial

ServicesPoS A/c Mgmt…

Statements ArchivalCRM Image Enablement

statements consolidation and

distributionATM Statements

Processing

Payment and Settlement

Applications Drivers

Fund Transfer• SEPA Payments

• Maintain Earnings• Cross - Border Co-

ordination• Operational Efficiency

• Loss Mitigation • Open Standards

SWIFT Virtualization…

Forex Cheque Processing

Foreign Inward Remittances

Foreign Outward Remittances

Lending and Mortgage

Applications Drivers

Loan Originating

• Current Economic Environment

• Operational Efficiency• Risk Management• Protection from predatory Lending

Loan Underwriting

Loan ServicingEarly Warning

SystemCollection &

DisputesLoan Takeover

Mgmt

Image Enablement of

LoS

Loans Statements Archival

Loans Statement consolidation

Reconcilliation Module

Customer Query Resolution

CORPORATE / COMMERCIAL

Applications Drivers

Cheque Clearing Process

• Fraud Detection for banks with Multi Channels

• Competitive Threats• Changing Consumer

Preferences • Capital Preservation

• Improve key performance metrics reporting

Remittance PDC Operations

Interest/Dividend WarrantsInward & Outward Clearing

Cheque Archival

Cash Management ServiceCheque Collection/Bulk

PayOrdersLC Issuance & Amendment

Shipment Credit

Bank GuaranteeCommercial Loans

Term Lending

Capturing Documents at the point of sale

Adhoc Contracts generationAccounts statements

Archival AML on BRE

Solutions Across LOBs in Banking

Small Average Profits per Customer. As such retail banking business requires to be managed well .

The cost of acquiring new customers must be kept low. Modern non-branch sales channels are essential

Cross-selling of services needs to be high. Selling just one or two basic products is seldom sufficient

Credit decisions must be accurate, fast and cheap to take. Credit scoring is the way to meet these requirements

Service quality levels need to be satisfactory but costs must be kept low. Too much quality results in losses

Transaction processing must take advantage of economies-of-scale. Centralized processing is advantageous

Key Challenges in Retail Banking

20

Large Proportion Customers which are not contributing much to Bank’s profit or are loss making customers

Method to identify such customers based on individual account profitability

Up-selling to ensure either these customer use services of the bank or leave the bank

Moving un profitable debit card customers to credit cards

Shifting such customers to alternative channels such as Mobile, Internet and ATMs

Enforcing fees commission and charges.

Shifting overdraft customers to term loans or credit cards

Key Challenges in Retail Banking

21

Customer On Boarding at Branch

BRANCH OFFICES

Documents Check and Verfication

3

Collect Customer Information 1

Local Scanning

Central Scanning

Collect KYC Information 4

Exception Handling

KYC Rating process6

Account Activation7

Email Notification to customer

8

Disbursing other documents to customer

9

Core Bank Updation 10

Central Processing Office

Collect Documents2

Credit Bureau Check

5Verification Agencies

60% Reduction in A/c Opening TAT

“…OmniFlow Suite has resulted in leaner and efficient branches... The Turn Around

Time (TAT) has been significantly reduced, leading to better customer experience.” –

Richard Falco, Director

Challenges:

•First foray into retail banking worldwide

•Ambitious customer acquisition targets

•Long A/c Opening cycle

•Anticipating outsourcing for keeping costs down

•Time-consuming exception handling

•Tracking Physical Documents as per Central BankGuidelines

Processes Automated:

Account Opening, Maintenance and Closure for Savings Account, Current Account & FD

Outward Remittance

Standing Instructions Execution

TDS Process

Benefits:

Opens 1200 accounts/day through 10 branches

TAT improved from 8 days to 3 days

Better monitoring of Branch Activities

Outsourcing step allows automatic upload of bulk customer data

Masking of signature and mobile nos. for the outsourcing vendor

Exception handling TAT reduced by far

Operational risk mgmt via KYC

Winner of “Red Hat” Award

Corporate Lending

Key Challenges in Corporate Banking

25

Corporate and Commercial Credit is key contributor to bank’s profits and yet Corporate Credit Approval is least technology supported system in the Banks :

Paper Intensive

Collecting and Managing large data for review

Manual/Excel based Credit and Risk Analysis

Manual Creation of Credit Memorandum and manual circulation to decision makers for approval

Manual check on adherence to Bank and Central Bank credit policies/compliance

No Method to track TATs and SLAs

Key Challenges in Corporate Banking

Even after the Credit Sanction..

26

Manual Management of documentation

Manual Management of collaterals

Manual post disbursement covenant monitoring

Manual review & renewal

Manual records for call reports

Manual referral processes

In addition, credit managers also to grapple with :

Increased scrutiny by regulators

Additional Reporting Requirements

New Capital Responsibilities

BRANCH OFFICES

Documents Receipt/verification

1

Data Entry 2

Blacklist and Dedupe customer Check

3

Local Scanning of Docs.

Evaluation & Document Verification, Property appraisal

4

Exception Handling

Exception Handling

5

Aggregate Score calculation, Credit history verification, Deviations

6

Contract Preparation &Email Notification to customer

8

Loan booking ,Disbursement/Partial Disbursement, & Authorization

9

Arch ival in DMS10

Mortgage loan Process

Central Processing Office/Risk Dept

Parallel Processing of cases to reduce TAT and Processing Cost

7

Loans Automation – Key Benefits

“Core banking is transaction oriented, whereas Workflow Automation is people oriented, where

escalations through mail triggers, alarms and monitoring of people can be done in Real time”

• End to End automation of document intensive Loan processes , where users can see documents and data

on single screen.

• Inbuilt loan calculators / Score Cards for automated Credit risk assessment.

• Automated Identification of fraudulent cases during initiation and archival for future reference.

• Instant Loan summary template for review and approvals by senior management.

• Flexibility to change the processes as per Market requirements without any changes in Core application.

• Automatic routing of the cases to appropriate authority on the basis of applied loan limit.

• Mandatory document/Process check listing at the time of initiation to reduce the rejections.

• Extending the reach of the to DSA (Direct Sales Associate) for initiating the Loan approval

• Real time Monitoring/Escalations for SLA management.

Abu Dhabi Commercial Bank, UAE

• Business Case – Meeting Statutory Requirements

– Customer visits the Branch for opening an account or alternatively DSA can approach

prospect/customer for account opening.

– Capturing / Editing customer information and KYC information - account related details,

relationship between the new account and customers, operating instructions, account memo and

signature cropping.

– Generating requests for Cheque Books and Smart Debit Cards (SDC) in Core System.

– Generating handoff file and uploading status for welcome kit to be dispatched by courier

company.

– Integration with Core banking system to push customer information, customer signature and

account information

Leading bank in Dubai providing retail loan services across 43 branches.

Abu Dhabi Commercial Bank, UAE

•Deployment Details

•Oracle 9i

•Windows 2000-Advanced Server

•150 users

• Business Benefits

– Core system was developed long back and did

not have extensibility to capture new

information which was necessary for statutory

compliances and audits. This information is now

captured and managed in BPM

– Integration with Core banking and subsystems

like SDC System

– Availability of online images for verification

– Improved turn-around time

– Generating customer and account related forms

in PDF format through the captured information

Process Implemented

• Account Opening

• Account Maintenance

• Customer Maintenance

• Term Deposits

• New and Term Deposit Maintenance

• Trade Finance Processes

• LG (Letter of Guarantee) Issuance

• LG Amendments

• LG Correspondence

• LG Closure

Trade Finance

Trade Operations Emerging Challenges

What is impacting the Trade Operations market

Clients are looking forward to Bank’s help in streamlining the inefficiencies in supply chain wherever possible

Basel III will fundamentally affect the profitability of the trade business with in crease in capital reserve requirement

Productivity between efficient and inefficient trade ops in Banks is as high as 700 percent

Open account transactions now account for more than 80 percent of global trade reducing banks’ role to simply moving money between trading partners

Trade Operations - Solution Overview

BPM – How it works for TF Operations

• Import LC Issuance

• Import LC Amendment

• Import LC Cancellation

• Import Bills under Collection

• Realization of Import Bills

• Direct Import Bills

• Advance Import Bills

• Shipping Guarantee/ Delivery Order

Export LC Advising

Export Packing Credit

Packing Credit Cancellation

Export Bill Negotiation

Export Bill Collection

Export Collection Bill Realization

Advance against Collection Bills

Export Bills Free of Payment

Import LC Export LC

BPM automates all key International Trade Finance processes

BPM - How it Works for TF Operations

BPM automates all key International Trade Finance processes

• Inward Remittances – Export/Other than Export (By MT 103)

• Outward Remittances – Imports / Other than Imports (By FTT (Swift) / FDD)

• Inward Foreign Guarantees

• Outward Foreign Guarantees

• Invocation of Bank Guarantees

•Bank Guarantees (Domestic) –Issue/Amendment/Extension/Cancellation

• Forward Contract – Sales/Purchase –Booking/Utilization/Cancellation

35

FORWARD CONTRACTS

BANK GUARANTEESREMITTANCES

• Inland L/C –Opening/Amendment/Cancellation

• Bill Lodgment under Inland L/C -Collection/Discounting

• Realization of the Bills

• Inland Bills under Collection

• Realization of the same

• Intermediary Trade Bills

• Vendor Bill Financing

INLAND TRADE FINANCE

Sample TF Process: Import LC Issuance

36

Case Study – ICICI Bank

Challenges

• To provide high quality customer service to wide spread client base cost efficiently

• Difficulties in meeting regulatory and internal compliance in handling trade business

• Lot of paper intensive work leading to misplacing papers, delays in TAT etc

Processes Automated

• Trade Factory - over 60 processes are live

• Overall in bank = 14 processes + 60 processes in Trade factory

• Each application has 8 to 12 page and sometimes up to 1200 pages one trade

Benefits

• Meeting compliance and following the required guide line

• Work tacking and visibility

• Major reduction in TAT responding the customers

Solution features

• Omniflow, Omniscan, Omnidocs

• Total number of users - 10000+ named users

• Current Trade Users - 600,

• Expected Trade Users > 3500

• Current Daily Transactions - 400 Expected Daily Transactions - 6000

• 225 million documents archivedincluding millions of TF documents over 7 years

37

Trade Finance Experience - ICICI Bank

PROCESSES IMPLEMENTED

IMPORTS:

•Import Bill Realization Under LC

•Import Bill Lodgement under Collection Bills

•Advance Import Payments

•Import Bill Realization under Collection Bills

•Buyers Credit

•Suppliers Credit

•Buyers Direct Import Bills

•Import LC Issuance

•Import LC Amendment

•Import LC Cancellation

•Direct Import Bills

•Import Bill Lodgement Under LC

EXPORTS:

•Export Bills Collection

•Expot Bills Against Advance Remittance

•Export Bills Negotiation

•Export Packing Credit

•Outward Bills (LC / Non LC) Direct Discounting

•Outward Bills (LC / Non LC) Direct Discounting - Realization

•Outward Bills Under Collection (Non LC) - Lodgment

•Outward Bills Under Collection (Non LC) - Realization

•Export LC Advising

•Export Realization

Trade Finance Experience - ICICI Bank

PROCESSES IMPLEMENTED

INLAND TRADE FINANCE:

• Inland LC Issuance

•Inland LC Amendment

•Inland Bills Under LC - Lodgment

•Inland Bills Under Collection - Lodgment

•Inland Bills Under Collection - Realization

•Inland Bills Under LC - Realization

•Inland LC Advising

REMITTANCES:

• Outward Remittance – Lodgment

•Outward Remittance - Realization

•DD Cancellation

•Conversion from EEFC

BANK GUARANTEES:

• Domestic Bank Guarantee Issuance

•Domestic Bank Guarantee Amendment

•Domestic Bank Guarantee Cancellation

•Shipping Guarantee / Delivery Order

•Foreign Investment Bank Guarantee Issuance

•Foreign Bank Guarantee Issuance

•Foreign Bank Guarantee Amendment

•Foreign Bank Guarantee Cancellation

Solution Benefits & Value Addition

40

Reduction in Turnaround time due to removal of time lags introduced by activities such as

communication of shortcomings to customer and preparation of currency sale/purchase report for

rate inclusion.

Visibility of work to all the stakeholders, transparency of operations and easy tracking helps faster

resolution of discrepancy in applications.

Improvement of client satisfaction with the bank’s improved service levels.

Real- time view of Key Performance Indicators (KPI) helps the management to align the operations

with desired.

Flexibility of work allocation enables the efficient use of work force to cope up with work load in

peak hours.

Agility in process change due to market, product, regulation changes

Enable low volume branches for Trade Finance business

Product Suite

Solution Accelerators – Not just coded black box

42

Loan Prospecting and Pre screening

Credit Memorandum Document captureData capture

Underwriting & Credit Analysis

Scoring & Rating Risk Management,RAROC

Collaterals Documentation Disbursement

Classified CCMRestructuring

Review Renewal

Credit monitoring Account conduct Covenants

TODAdhoc approval

CollectionsNPL Management

Reports & DashboardsPortfolio MonitoringTAT & SLA.

Servicing Modules Release of securities Change in Pricing

But developed on framework enabling Bank to configure bank specific requirements

Document capture from multiple sources

Flexibility to change data attributes through Inbuilt Form Designer

Production scanning Mobile approvals

Facility to Configure and Change Business Rules.

Real time Configurations as per Market trends.

No Programming effort

Flexibility to Configure and change Business Processes.

Empower Business to control their Process.

Real time Process changes as per Market Dynamics

Real time Dashboards.

Configurable Business Reports through

intuitive Wizards Business Analytics Auto schedules of

Reports for Mgmt.

Out of Box adaptors for Core Apps

Integration through Web Services and Middle Ware

SOA for flexible Interfaces

Document capture Configurable Data

Configurable Rules through BRMS

Designing Business Process and Workflows

Business Activity Monitoring

Seamless Integration with Existing/Core Apps

Business Insights/KPIs Operational Reports

BA

M/

DA

SHB

OA

RD

S

Retail, SME and Corporate specific processes and workflows can be configured/designed in user friendly Process Modeler

44

Business Rules Management

45

Strong Rules

management and

hierarchy

definition for

applying these

rules

BAM - Visibility, Accountability and Improvements

Functional DashboardOperational Reports Investigative Dashboard

Integration Capabilities

Easy Integration with External Systems

48

Web Service

WebServices based

Integration

Messaging Based

Services

EJB Based Adaptors

DMS Archive Connector

ZapIn! New door to success….

Customer On Boarding in Field -ZapIn

Upload metadata and document images to back office in offline And

Capture Application forms and supporting documents . Documents compressed by at least 80%

Enter key metadata in the application form on tablet/ Smart phone

Engage with the customer in the field (such as malls) or premisesZapIn can also be used for customer on boarding in the branch

And save cost of scanners

Check status with external credit bureau online. Check application status at back office online

How ZapIn works

Application Form

Supporting Documents

Cloud

ZapIn Server

In-Premise or Cloud

Mobility Support: Customer On boarding

Data & Document Capture

ZapIn can also be a great tool for a large Bank

In case of branches which are not online or on low bandwidth , ZapIn is a goodalternative. It can also be used effectively in Agent Banking

1. Will reduce cost of deploying scanners at branches2. Can store data and documents in offline mode. The data and documents are

uploaded to central server whenever connectivity is established 3. Converts coloured image to black and white like a photocopy4. Uses Adaptive Binarization to ensure best quality legible B&W images5. Ensures Auto orientation in Imaging6. ZapIn application has auto cropping features for photos and signatures7. Business rules and validations built in application to increase FTR (First time right)8. ZapIn advanced imaging compresses image to a very small size. For example a

image of 600 kb is compressed to 30 kb which can easily travel on low bandwidth9. Application supported both on Android and iOS platforms10. Inbuilt strong security features11. Proven technology as very large banks in our other implementation are using it very

successfully

Why Newgen for Banks

54

Entire gamut of Business Process, Product & Tech Consulting

First-time right, tailored solution owing to our industry knowledge

Fastest implementation cycles in the industry

Complete ownership of the deployment

India Delivery advantage passed on to you

Flexible licensing to suit the enterprise needs

Operational integration of distributed branches and Central location

Distributed capture of Documents and Bandwidth Optimization

Last mile integration, partnership with other core banking players

One-stop shop for Worflow and Document Mgmt products

Highly focused on leading edge product development

Support for mission critical processes across multiple locations

24 x 7, reliable support for your organization

Comprehensive Product Range

Domain Knowledge

Enterprise- wide Solution

Rapid Deployment

Value for Money

Mission Critical Process Support

Thanks