Trends to dominate the BFSI industry.

A market place is not a picnic spot, it’s filled with fierce competition. The ever-changing landscape, where riding on a trend can be the difference between tremendous success and utter failure. Here are the top local trends that BFSI industries need to follow to stay relevant and ahead of the competition.

Services will matter more than products –

To service is to sell is the philosophy to dominate the market right now and for coming days. Banks will leverage their rich customer data to "service first", rather than sell. Sales will happen because banks anticipate service moments. This will need large technology investments to sense "customer moments" and respond to them in real time. Banks will shift their beliefs from a product-oriented organisation to a customer-driven organisation. Customer will make the rules.

Paperless and online –

When it comes to the process of applying for a loan or opening a new account, customers desire speed, ease and transparency, along with instantaneous decision-making capabilities. These are no longer a luxury but instead have become a hygiene factor and a necessity. They would also like the power to customise as per their needs and more choices for financial products and service. Future banking will be online and paperless with digitisation. Tab banking and mobilebanking will take the throne. With the help of Aadhar platform, loans will be disbursed within mere seconds and virtual cards will be issued instantly

Personalisation will be the key –

More effort will be put in to make the whole experience more personalised. India has more than 440 million millennials, more than China. This mobile-first consumer segment wants choice, convenience and personalisation; customised offers and an experience that is easy and intuitive while also being contextual. With infrastructure development and increase in smartphone usage, customers expect to use services anywhere, anytime. This is revolutionising the consumer experience. People are increasingly using mobile devices to research potential purchases, compare prices for goods and services and transact using mobile banking. 

Business Process Reengineering

Business Process Reengineering involves the exhaustive redesign of core business processes to achieve astonishing improvements in overall productivity, cycle times and quality of work. In Business Process Reengineering, companies start with a blank sheet of paper and rethink existing processes and hold them in a way to deliver more value to the customer. They typically adopt a new value system that places increased emphasis on customer needs. Companies may reduce organizational layers and eliminate unproductive activities in two key areas. First, they redesign functional organizations into cross-functional teams. Second, they use technology to improve data dissemination and decision making.

How Business Process Reengineering works:

   Business Process Reengineering contains five major steps. Managers should:

·         Refocus the company’s values on customer’s needs.

·         Redesign the core processes, often using information technology to save time and make improvements.

·         Reorganize a business into cross-functional teams with end-to-end responsibility for a process.

·         Rethink basic organizational problems and people issues.

·         Improve business processes from top to bottom, all across the organization.

Companies use Business Process Reengineering to:

Companies use Business Process Reengineering to improve performance substantially on key processes that impact customers. Business Process Reengineering can:

·         Reduce costs and cycle time. Business Process Reengineering reduces costs and cycle times by eliminating unproductive activities and the employees who perform them. Reorganization by teams decreases the need for management layers, accelerates information flows, and eliminates the errors and rework caused by multiple handoffs.

·         Improve quality. Business Process Reengineering improves quality by reducing the fragmentation of work and establishing clear ownership of processes. Workers gain responsibility for their output and can measure their performance based on prompt feedback.

Why Banks opt for Tab Banking?

Offering a collaborative, electronic process can meet your customer’s expectations and evoke a sense of loyalty. This can translate into greater customer retention and wallet share. Whether a customer is opening a new account, applying for a credit card or making an account change, tablets offer an interactive way for customers and representatives to complete a transaction.

From ICICI to the HDFC, every major bank in India offers tab banking. Although tablets are considered mobile devices, they have a place in a bank’s multiple business channels, including the branch. In fact, tablets could close the gap between the customer’s satisfaction rating and the bank’s perception of their service. In addition to improving customer service and potentially appealing to a broader audience, tablets offers a wide array of benefits to the banks, such as,

Going Paperless: By adopting an e-process that includes electronic signature capabilities, there’s no need to print and waste papers. The process is totally electronic from start to end, saving banks the cost associated with managing papers.

Multichannel Support: The same tablet application can be used in-branch, in-field and even by customers in the comfort of their own home. A similar process across multiple environments makes a bank’s multichannel strategy a reality while contributing to a better customer experience.

Collaborative Process: Instead of a stiff customer/representative interaction, tablets promote collaboration. 

Tablets are versatile devices that banks uses as leverage to improve the customer experience and benefit the organization by implementing paper-free, efficient processes.

Guidelines to make outsourcing in Insurance well structured.

IRDAI - Regulator Insurance Regulatory and Development Authority of India, has proposed outsourcing regulations for insurance companies operating in India, under which they can take services of individuals for activities such as medical examination, investigation of claims, and recovery. As per the exposure draft, every company should put in place a comprehensive board approved the outsourcing policy. In considering or renewing an outsourcing arrangement, an insurer should subject the agency to appropriate due diligence, the regulator said in the proposed IRDAI (Outsourcing of Activities by Indian Insurers) Regulations, 2016. “The insurer shall satisfy itself that the outsourcing agency’s security policies, procedures, and controls will enable the insurer to protect confidentiality and security of policyholder information,” according to the draft.

   

The new norms have been welcomed by the industry, as it will help regularize the outsourcing. As a better structured outsourcing mechanism can be put in place adhering to these rules. “The proposed regulations are trying to give a more structured and better shape to outsourcing activities by clearly defining core and non-core activities,” Puneet Sahni, Head-Product Development, SBI General Insurance, adding that the new norms will “positively” impact business processes and customer interests.

The proposed rules will bring more accountability, as outsourcing relationships will be governed by written agreements that are legally binding for a specified period. That clearly describes all material aspects of the outsourcing arrangement, including the rights and responsibilities of all parties. 

Why Vietnam is becoming the next big Outsourcing destination?

Offshore outsourcing is a time-tested way of saving on cost that almost every multinational company has accepted and used. Outsourcing the business processes in an emerging economy enable them to create the infrastructure and get the labor at a much cheaper price, than their native country.

  

Once India used to top the list of nations preferred for outsourcing, but that is changing. With the India’s economy reaching new highs every year, even surpassing the China in the race. In this growing economy where youth is getting better prospects than before and with middle class getting more and more empowered, the low labor cost might soon disappear. Foreseeing this, outsourcing companies are looking for new destinations to outsource to. And they are eyeing the Vietnam.

    

Vietnam’s economy quietly slipping, with the worst drought in the last decade country is far below the ambitious GDP aim it had set for itself. It’s becoming the next hot destination for offshore outsourcing. With Vietnam’s talent pool increasing in technical areas and modern tech infrastructure, as well as its reasonable rates, mean it’s catching the attention of tech companies big and small.

“The Vietnamese have a very strong desire to work with other parts of the world because they value the positive flow of money and funding coming into their country,” said Anna Frazzetto, chief digital officer and senior vice president at recruiting firm Harvey Nash. “All the big players are setting up their own facilities. If the companies that are the gold standard in technical competency are setting up house in Vietnam that says a lot about the technical talent Vietnam is offering.”

Cryptocurrencies

While bitcoin is the most salient and top of mind in the Financial Technology (FinTech) world, many altcoins have emerged as more specific and affordable options, especially in the USA and the UK. Many others have made decisions against digital currency, for reasons ranging from ignorance to ambiguity to protectionism of national currency. Crypto currencies are basically peer-to-peer digital currencies that use cryptography as lead security system. The laws about crypto currency are in a grey area across most parts of the world including India. Since it's a P2P currency, it is impossible to regulate a population using bitcoin as currency and the logistics to monitor a mass population is almost impossible. At the moment there's no verdict on the legality of virtual currency in India.

Outsourced Compliance Monitoring and Reporting Services

BFSI organizations across the world are facing the challenges of tighter regulation and having to deal with disparate information systems. Outsourced services of Archis Business Solutions Pvt Ltd can help you streamline business and statutory reporting processes and enable inter operable data communication. From Capital Adequacy Reporting to Credit Management, from MIS to Risk Management, and key internal processes such as loan and credit management can significantly save on time and costs with outsourcing of these services to established domain experts in this field. 

Archis Services for Compliance Monitoring and Reporting

With modification in existing regulations and addition of new ones, financial institutions are faced with a host of challenges in keeping abreast of these changes. There is an immediate need of putting in place an effective and dynamic compliance framework that is responsive to market and regulatory development. Archis Business Solutions’ Compliance and Regulatory team provides expert assistance on regulations and compliance and provides a comprehensive compliance framework to customers.

For companies to stay relevant, process and system enhancements are required to cope with the increasing demands. We ensure accuracy and punctual information transfer to assist our customer in staying relevant. With Archis’ services, companies can roll out innovative products without being tied down by regulatory implications or disclosure requirements.

Our Compliance and Regulatory team is comprised of technicians and professionals with 30+ years of broad ranging experience of providing effective solutions to financial institutions. Leveraging on our insightful knowledge and deep understanding of the regulatory requirements within the financial services industry, we are able to assist you in understanding and responding to increased challenges that banks and other financial institutions face in the regulatory regime.

COMPLIANCE MONITORING AND REPORTING

Compliance laws, rules and standards generally cover matters such as observing proper standards of market conduct, managing conflicts of interest, treating customers fairly, and ensuring the suitability of customer advice. They typically include specific areas such as the prevention of money laundering and terrorist financing, and may extend to tax laws that are relevant to the structuring of banking products or customer advice.

The expression “compliance risk” is the risk of legal or regulatory sanctions, material financial loss, or loss to reputation a bank may suffer as a result of its failure to comply with laws, regulations, rules, related self-regulatory organization standards, and codes of conduct applicable to its banking activities (together, “compliance laws, rules and standards”).

A bank that knowingly participates in transactions intended to be used by customers to avoid regulatory or financial reporting requirements, evade tax liabilities or facilitate illegal conduct will be exposing itself to significant compliance risk.

Compliance laws, rules and standards have various sources, including primary legislation, rules and standards issued by legislators and supervisors, market conventions, codes of practice promoted by industry associations, and internal codes of conduct applicable to the staff members of the bank. For the reasons mentioned above, these are likely to go beyond what is legally binding and embrace broader standards of integrity and ethical conduct.

It is in such a scenario that outsourced services of Compliance Monitoring & Reporting by companies such as Archis Business Solutions Pvt Ltd gain significance. While theoretically compliance should be part of the culture of the organization and not just the responsibility of specialist compliance vendor or staff, nevertheless, a bank will be able to manage its compliance risk more effectively if it outsources the compliance function to a specialist organization where the required structures are in place and the processes are fine-tuned over time with the “compliance function principles”. Apart from the obvious saving on manpower & training costs, with properly documented division of responsibilities, the inherent risks are almost completely mitigated!