Agile FINANCIAL TIMES

October
2009

Bancassurance
Emergence and Global Trends

CUSTOMER SPOTLIGHT

Reliance Mutual Fund

PERSPECTIVE

Business Intelligence
in BFSI

SOLUTION SPOTLIGHT

AGILIS 1KEY BI Suite

 October 2009

Editor’s Note
CONTENTS
CUSTOMER SPOTLIGHT

Reliance Mutual Fund 4

COVER STORY

Bancassurance -
Emergence and Global
Trends 6

NEWS

Global Update 10

PERSPECTIVE

Business Intelligence in
BFSI 12

SOLUTION SPOTLIGHT

AGILIS 1KEY BI Suite 15

Be Agile!

Shefali Khera
Chief Marketing Officer
Write to us at info@agile-ft.com

Reliance Mutual Fund is India's
largest mutual fund company,
and is part of the Reliance Anil
Dhirubhai Ambani Group.
On the equity side, it has the
largest workforce, comprising
economic teams, separate core
teams and fund managers.
4
CUSTOMER SPOTLIGHT
Reliance Mutual
Fund
Leveraging data for analytics
Reliance Mutual Fund (RMF) is one of India's leading
mutual fund companies, with Average Assets Under
Management (AAUM) of ~ INR 11.7 bn and an investor
base of over 7.4 million individuals.
The Challenge
As part of its regular business operations, RMF carries out
high level research for more than 500 companies. As a result,
huge amount of data is generated, posing a challenge in
terms of analysing this data and developing different reports
for various stakeholders. The existing IT systems were
struggling to handle this, and would generate static reports
from within the application, which could not be viewed
under different scenarios.
Though the CRM solution had reporting capabilities, it
would often fall short when it came to providing detailed
reporting.
Project Background
RMF found it a significant challenge to handle the scale of
data and make analysis and insight available to users across
180 locations. Some of the issues they faced included:

analysing the data of 7 million customers and
understanding their behavioural patterns

Lack of real-time access to decision making information,
due to which productivity of business users was
adversely impacted.

Inability of end-users to consolidate data being gathered
through sales activities and campaigns, mapping it to the
CRM and then preparing reports.
 CUSTOMER SPOTLIGHT

Supplier Selection

RMF was actively searching for a Business Intelligence (BI) tool that would be
easy to learn, use and deploy across the enterprise. It evaluated a couple of
traditional BI tools but found that they had some serious limitations. They were
meant for a select few expert analysts, difficult to deploy and involved excessive
time for training users. RMF chose 1KEY Agile as the front-end tool, as the
interface was similar to Excel, yet powerful enough to deliver on-the-fly report
requirements of the business users. In addition, as 1KEY Agile was developed
on the Microsoft .net framework, it could be easily deployed on the Windows
platform which was being used at RMF. The fact that the deployment would
take only a couple of days worked in favour of the application during the
selection process. The timeframe for the implementation across the enterprise
was just one month, with a day required for technical and functional training of
the fund managers and research team.

Implementation

The technology involves multiple database access that was made available to
end-users, who were identified by the BI team at RMF based on their
requirements and subsequently mapped to 1KEY Agile. Information was
consolidated across all internal applications, including portals. User
management was implemented through Active Directory, which is supported
by 1KEY Agile, and was deployed on Citrix server for faster deployment and
instant access to web-based reports. 1KEY Agile was made a standard interface
for all reporting and analysis requirements, a decision which helped RMF save
enormous time and the trouble of building custom reports. 1KEY Agile was
found to be similar to Excel in terms of ease of use, at the same time offering
better features and better control on the data. It has become a standard
interface that gives flexibility and has considerably reduced the learning curve.

Business Benefits The RMF team is

With 1KEY Agile, RMF can generate different types of reports for various very happy and
users involved in equity research based on their roles, albeit from the same data.
The RMF team is very happy and satisfied with the 1KEY Agile deployment satisfied with the
and the fund managers, who need to modify their queries at various stages of
their decision-making process, find it very easy. Reports that earlier required 1KEY
intervention from the IT department and took 15 minutes, are now being
generated by business users in a fraction of that time. Marketing and operations deployment and
teams, fund managers and research teams, all log in to 1KEY Agile to generate
reports and access all their applications. The ad hoc reporting facility from the fund
1KEY Agile has been found to be the most valuable and sought-after feature.
Sales teams are now using 1KEY Agile to effectively sell funds to distributors, managers, who
as it gives them the ability to quickly generate historical reports to target and
qualify specific advisors. RMF also uses 1KEY Agile Scheduler extensively to need to modify
send scheduled reports via e-mail. Due to its comprehensive capabilities and
remarkable flexibility, 1KEY Agile has taken immense pressure off the IT team their queries at
and has given users the freedom to self-serve themselves.
various stages of
Conclusion
their decision-
1KEY Agile has been instrumental in increasing operational efficiency at RMF
substantially. In a phased manner, RMF plans to extend the usage of the making process,
application to all its users, including sales teams, distributors as well as all the
branches. With 1KEY Agile, RMF was able to save cost and turn-around-time find it very easy
required to cater to the reporting needs of the fund managers, research teams,
MIS team, risk team, operations and IT. now.
5
 Bancassurance is a
comparatively new
phenomenon in the financial
world and may have slightly
different connotations across
the globe, as it takes into
consideration many regulatory
and legal aspects.
In essence, bancassurance
refers to the partnership of an
insurance company with a
bank, where the former uses
the latter to refer, sell and
distribute insurance products
and services. The insurance
company trains and advises the
bank staff, with both parties
sharing the commission.
6
Bancassurance
Emergence and Global Trends
Bancassurance emerged when a mature banking industry in France aimed at
adding value to services for its customers, and decided to offer customers a one-
stop shop to cater to all their financial requirements. With a positive impact on
profits, customer loyalty and diversification, the concept achieved a lot of success
in the country, as is evident from the large number of French bank groups having
life insurance subsidiaries. Another manifestation of the popularity of
bancassurance is that French bancassurers premium collection increased from 37
percent of all life insurance premia in 1990 to 64 percent in 2006. Other non-life
insurance premium shares have also registered increases. The success has been
attributed to the capacity of retail banking networks to sell individual policies.
Banks are using success in life-insurance to build on their other services.
Innovations in the form of non-standard policies such as company savings plans,
death/ disability/ care/ illness insurance policies, property and vehicle insurance
have been introduced, depending upon the demographics of a region. According
to the European Life Bancassurance Review released by Milliman, bancassurance
in France has maintained its market share as tax and regulatory changes were
optimized adequately. Innovative products and services for customers and
creation of new opportunities helped sustain the growth.
After France, other European countries followed suit, with Spain and Austria
being among the more successful. According to other findings of the Milliman
report, bancassurance was found to be a major distribution channel in Europe,
accounting for over 60 percent of individual life insurance premiums in France,
Italy, Portugal and Spain, and over 50 percent in Belgium. Countries such as
United Kingdom and Germany have had limited success.
 COVER STORY
Over all, an extremely supportive regulatory framework,
well-developed banking network, simple and innovative
financial products, and strong relationships with banks have
helped in making bancassurance successful.
Concept Globalization: Mixed Response
Bancassurance has gained prominence and acceptance in
other parts of the world only in the last few years. Many
governments delayed their decision to allow banks to take
up insurance for the fear of giving them too much control
over financial markets.
The 2008 study by the American Bankers Insurance
Association, in cooperation with Reagan Consulting, on
‘Banks in Insurance’ revealed that 96 percent of banks
currently distribute insurance products and believe that
insurance businesses add value for bank shareholders and
about 40 percent reiterate saying it adds "significant" value.
However, the progress of bancassurance has been slow in
the United States. As the industry coped with regulations
that were not very favourable, banks attempted to achieve
success more through distribution rather than through
innovation. Penetration has been low as marketing initiatives
to increase awareness among customers lacked efficacy.
Latin America
The European bancassurance model was successfully
replicated in Latin America. Insurance penetration is low in
the region in the range of 5 to 8 percent. Regulations vary in
countries in the region but most allow the sale of insurance
products to a bank’s customer base with certain restrictions.
For instance, Argentinian law requires the presence of an
intermediary when selling insurance to a bank customer,
while Chile does not allow direct sales to a bank’s customer
unless such sale is incidental to a banking product.
The region needs to focus on making the distribution
approach more effective. Bancassurance is gaining
importance as a distribution channel in the region and its
success can be attributed to the following factors:

Emphasis on advanced financial market integration;

Structural changes in the financial markets and insurance
industry; and

Entry of experienced foreign insurers.
Brazil and Mexico dominate the Latin American insurance
industry. Mexican insurance market generated more than 25
percent of the total premiums in the region and the country
registered an increase of 16 percent year on year in net
written premiums in the first nine months of the last fiscal.
Life insurance product sales through the bancassurance
channel played a major role, with penetrations close to 80
Clive C R Bannister, Group Managing Director of
Insurance at HSBC Holdings plc, recently spoke at an
industry conference. Here are a few thoughts from his
speech, 'Delivering Growth through Bancassurance':
Bancassurance success comes from identifying a
customer need and providing key products, and is
strategically logical in the process of broader wealth
management. Bancassurance knows and touches
more client's financial needs than any monoline insurer.
There is a strong rationale for banks to focus on selling
insurance products. People who are over 50 years old
possess 70 percent of all financial assets. With better
healthcare, the longevity of population globally is
moving upward. These individuals need protection
(insurance) and advice on investments - not more
borrowing, thus building the case for life, pensions and
investment products.
Bancassurance also helps in internalising profits that
are otherwise paid away to an agency sales force, and
is a winning strategy because -

Customers want 'one-stop shops' that offer a full
range of banking, pension and investment products
to meet their total financial needs.

Most international banks have strong brands and
capital resources, which promote and provide good
financial certainty and long term risk protection,
respectively.

Banks have access to significant customer bases in
all major markets.

Banks possess appropriate channels e.g. branch,
sales forces, direct marketing and internet banking.

Insurance is a logical 'add-on sale' to loan products.

Insurance allows banks to diversify earnings from
interest to fee-based income.
7

percent of the total life market in Brazil. A number of joint
ventures are active in the region, some of the prominent
ones being Bancomer and Aetna in Mexico, Banorte and
Generali in Mexico, AXA and BCI in Chile.
Asia
Asia has been a region of high growth, primarily due to the
Indian and Chinese markets. Changes in policies and other
regulations are fast paced and bancassurance stands to
benefit.
As part of a pilot program launched in April 2009, four large
state banks in China will be allowed to operate insurance
companies. "We have reached an agreement with the
insurance regulator on allowing banks to set up their own
insurance companies, and the big four banks will be the first
to run it on a pilot basis," said Lai Xiufu, an official from the
China Banking Regulatory Commission (CBRC).
With the insurance sector growing at about 20 percent
annually, even mid-sized banks are looking to capture the
opportunity. According to Daniel Wong, analyst at Moody’s,
a positive longer-term growth of bancassurance in China is
expected.
With the growing demand for insurance products and the
existing low level of bancassurance penetration of the
market coupled with the banks’ capability to reach
customers through their extensive branch networks, will all
work in favour of the industry.
Similarly, the constitution of a panel by the Insurance
Regulatory and Development Authority (IRDA) in India, to
examine the need for a separate regulation for the
bancassurance model indicates the interest generated in the
country. The panel will evaluate the current regulatory
requirements for banks that allow them to tie up with only
one life insurance company and one general insurance
company for bancassurance, which is restricting the growth
of this industry. India has a strong network of banks in the
public, private and co-operative sector, but a dismal 3 to 4
percent insurance penetration rate.
The Japanese market is dominated by agents and has one of
the highest rates of insurance penetration. Other countries
such as Korea, and the Philippines have only recently started
to experiment with this channel of insurance delivery.
Africa
Bancassurance has been introduced in the recent past in
most African countries, with private players tying up with
various banks and insurance companies to set up operations.
The insurance penetration level in most countries in this
regions is abysmally low.
Bancassurance has been stated to be the fastest growing
8
COVER STORY
revenue stream for banks in Africa. For instance, Standard
Chartered Bank recently entered into a deal with Sanlam to
offer insurance in five African countries. These countries
have also been identified as regions that have potential for
success in bancassurance as consumers become more and
more demanding.
Standard Chartered, which is considered by many to be a
front runner when it comes to innovation, plans to tap this
market by offering policies that will appeal to the region and
will cover illness, funeral expenses, savings, education and
life insurance.
Middle East
Insurance products could be a major source of revenue for
banks in the Middle East, but call for changes in legislation
and internal processes. Bancassurance is still in its nascent
stages of development in many Middle East countries.
According to an industry expert, bancassurance has the
ability to generate 50 percent of a bank’s fee-based income
and considers legal issues as the major stumbling block to its
growth in the UAE.
Going Forward
Markets that are greatly liberalised and have higher insurance
penetration have not really been able to showcase similar
success when it comes to bancassurance. Bancassurance
typically works better under a regulated environment where
penetration is low and closer interaction with customers can
influence decisions.
Technology is also expected to play a major part in the
growth. Different needs of different models create a
challenge for users, both for insurers and banks.
Automation, quick access to clients, flexibility to cater to the
entire value chain, are some of the facilities that technology
can enable.
Globally, there is considerable debate about best practices
for bancassurance. It needs a strong backing of regulatory
measures, and banking and insurance policies that can aid its
growth. To sustain growth the service needs to build on the
existing advantages of its ability to cross sell to the large
base of bank customers, get huge volumes in exchange for
a marginal commission paid to banks and be able to use the
existing bank infrastructure.
Markets that have recently introduced this service can expect
to witness a large number of mergers and acquisitions as
players with the capacity to service high volumes will capture
new markets.
Similarly, the ability to innovate in order to cater to regional
requirements and experience in other markets will help
larger players to capture a greater market share.
COVER STORY

Making Bancassurance Agile

Presentation at the 4th Annual Bancassurance Conference in Vienna

Kalpesh Desai, CEO of Agile FT, recently spoke at the

4th Annual BancAssurance Conference in Vienna,
Austria, on ‘Making Bancassurance Agile’.

The audience included senior representatives of the

banking, insurance and financial services globally who
travelled to Vienna specially to attend the conference.
Captured here are a few highlights of the speech:

Bancassurance has now grown to become one of the

largest distribution channels for insurance companies
across the globe. In order to reduce dependence on
interest-based income and alleviate the effects of
increasing competition and declining margins, banks
too have been actively exploring different avenues to
generate income, hence their interest in cross selling
insurance to their incumbent customer base.

With an increasing number of insurance companies and

banks partnering to explore this business model, the
competitive pressure on productivity, efficiency and
customer service standards has led to an aggressive
adoption of technology. On one hand, the alignment and
integration of various processes have resulted in
helping insurers and banks to achieve seamless
integration, while on the other hand, technology has
been a key enabler of customer segmentation and
superior service delivery.
The recent trend among BFSI companies in general and
bancassurance providers in particular is to move
towards technologies which offer higher variability in
expense control.
With platform-enabled outsourcing emerging as the
definitive model for many banks as they strive to lower
operational costs to ensure a high return on investment,
there is no better time than now, to leverage
functionality-rich application software platforms!
Platform-enabled service has evolved from the
software-as-a-service model and is a step ahead. It
provides a completely flexible and configurable platform
to create, run and operate applications. Applications
include design, development, testing, deployment,
hosting, and application services such as security,
scalability and versioning. All this is completely available
as an integrated suite from the internet, where no
software or installation downloads are required.
In addition, with the Infrastructure-as-a-service model,
there is no need for corporations to allocate capital
expenditure to purchase servers, software, and data
centre space or network equipment, but instead they
can buy these resources as a fully outsourced service.
In a scenario where most banks and financial
companies are already straddling a host of legacy and
fragmented systems within their own set-ups,
technology imperatives for bancassurance may seem
to be prohibitively high. Meanwhile, companies active in
strategic bancassurance partnerships continue to seek
technology which can provide the necessary fuel to
enhance flexibility in adopting, integrating and
implementing change. Technology that can provide all
this without "locking-in" companies in heavy
investments will help bancassurance providers become
truly agile.
Financial institutions need to ask themselves - are we
taking advantage of the benefits that can be sought
from this model in order to stay ahead of the
competition and drive innovation?

9

Recession 'very likely over' - Federal Reserve
According to the Federal Reserve Chairman, Ben Bernanke,
the worst recession to hit the world since the 1930s, is
probably over. Bernanke cautioned however, that even
though the economy is likely to show some growth now, it
may not be enough to prevent the unemployment rate from
rising, which is currently at a 26-year high of 9.7 percent.
Bernanke expressed confidence about the ability of the
Congress to avert any future crisis and that it was willing to
revamp the nation's rulebooks in order to do so. "I feel quite
confident that a comprehensive reform will be forthcoming.
It has been too big a calamity over the past year, with the
near meltdown of the US financial system, for Congress not
to take action," reiterated Bernanke. He found support in
President Barack Obama, who urged the Congress to enact
legislation this year. Though official confirmation is awaited,
many analysts have predicted that the economy which had
contracted at a 1 percent pace in the second quarter, is
growing at an annual rate of 3 to 4 percent in the current
quarter.
Nokia Money - Making Mobile Payments
Happen
Nokia Money, a new mobile financial service is a simple and
convenient medium through which consumers can send
money simply by using the receiver's mobile phone number.
The service allows consumers to pay suppliers for goods and
services rendered as well as pay their utility bills, or even
recharge their prepaid SIM cards. The service includes
accessibility 24 hours a day from any location. This in turn
10
NEWS
Global
Update
A quick review of industry news from
around the world.
results in huge savings in terms of travel costs as well as
time, for the users. To facilitate an efficient flow of funds,
Nokia is building a wide network of Nokia Money agents,
where consumers can deposit money in or withdraw cash
from their accounts. "We believe mobile financial services
offer a market opportunity with long term growth potential.
With more than 4 billion mobile phone users and only 1.6
billion bank accounts, global demand for access to financial
services presents a strong opportunity to combine mobile
devices with simple but powerful financial services such as
Nokia Money", said Mary McDowell, EVP and Chief
Development Officer, Nokia.
The Decoupling Debate
Decoupling alludes to the phenomenon that emerging
markets in Asia and elsewhere would remain indifferent to
funding received from the Western world and that their
economic growth would no longer be a function of the
health of the industrialised world. The belief that emerging
economies had decoupled because of the existence of
strong domestic markets, high currency reserves and
prudent macroeconomic policies, bit the dust as the Wall
Street meltdown set the global financial system trembling,
Asian markets notwithstanding. So though it may still be
premature to declare decoupling, business cycles in Asia,
especially East Asia, are fast moving towards more cohesive
financial linkages. As the regional economies integrate, trade
as well as production accelerate, and consumer markets
develop, it is felt that Asian economies will reduce their
dependence on the US and European economies. This
coupled with dollar de-linking may well lead to decoupling.
 NEWS
Bank of England Sees Silver Lining
According to a senior policy maker at the Bank of England,
the British economy could resume its tread on the growth
path as early as the next six to nine months. However, there
is an underlying cautionary note, that this growth may still
not prevent unemployment from rising for at least a few
more months. According to David Miles, an external
member of the Bank's Monetary Policy Committee, there
may be a few quarters where the economy could witness
small increases in the GDP. Technically, this implies that the
country could be out of recession in six to nine months. But,
he also indicated that the current levels of spare capacity and
low inflationary pressure may keep the interest rates at low
levels and it would take a while to rebuild the banks' cash
and reserve levels.
CIC to Acquire Stake in Noble Group
China's sovereign wealth fund, China Investment
Corporation (CIC), proposes to buy a 15 percent stake in
Noble Group. It is proposed that US$850 million worth of
new and existing shares of Noble will be sold to CIC at 8.1
percent discount to the last traded price. CIC has decided to
increase investments in commodities after it earlier lost
money on financial firms including Blackstone Group LP
and Morgan Stanley. Noble, the Hong Kong-based supplier
of commodities, will benefit from China's demand for coal,
iron ore and soybeans. The second-quarter profit at Noble
doubled as China boosted raw material imports to fuel
US$586 billion of stimulus spending needs. China is the
world's biggest buyer of commodities including soybeans,
soybean oil, cotton, iron ore, aluminum, copper and zinc.
Asia to Lead the Bounce Back
Asian Development Bank (ADB) in its flagship publication,
Asian Development Outlook (ADO) 2009, says that Asia is
proving to be more resilient to the global downturn than was
initially thought. The update to ADO forecasts economic
expansion in developing Asia to come in at 3.9 percent in
2009, up from the 3.4 percent expected in March. In 2010,
the growth projection is likewise upgraded to 6.4 percent
from 6.0 percent. Stronger growth in East Asia and South
Asia underpinned the improved prospects. This can be
attributed to a number of factors such as affirmative action
by many governments and central banks, the existence of
relatively healthy financial systems prior to the global crisis,
and the rapid turnaround in the region's larger, less export-
dependent economies.
Uruguay Sells Bonds in Overseas Markets
Uruguay sold US$500 million of bonds maturing in 2025 in
its first international debt issue in three years. Uruguay
issued the 16-year bonds to yield 340.3 basis points above
the US Treasury, according to data from Bloomberg. The
issue is the first since October 2006, when the government
sold US$500 million in a re-opening of its 7.625 percent
bonds due in 2036. The South American country tapped
overseas debt markets amid a rally in emerging-market debt,
sparked by a recovering global economy. The country's
offering follows a US$1.75 billion debt sale by Mexico last
week. Uruguay is also preparing to hold presidential
elections in the end of October and Latin American
companies have stepped up debt sales this month. Petroleos
Mexicanos, the largest oil producer in Latin America, sold
US$1.5 billion of 5.5-year bonds, while Brazilian iron-ore
miner Vale SA sold US$1 billion of 10-year bonds.
Iran to Replace the Dollar with the Euro
Iran's President, Mahmoud Ahmadinejad, has ordered the
replacement of the US dollar by the euro in the country's
foreign exchange accounts. As per a report from the Mehr
News Agency, the September 12th edict was issued
following a decision by the trustees of the country's foreign
reserves. Since the introduction of the euro by the European
Union, the euro has gained popularity internationally and
there are now more euros in circulation than the dollar. The
move will also help decouple Iran from the US banking
system.
Higher Tax - Indicator of Faster Recovery?
Indian companies have paid twice the amount of tax this
quarter as compared to the last, fuelling discussions that
growth in the Indian economy may be accentuated. Advance
taxes paid by corporates was at INR 440 billion in the July-
September quarter.
United Korea - a Force to Reckon With?
According to Goldman Sachs, a united Korea, which implies
the coalition of Asia's fourth biggest economy with one of
its poorest, forms an economy that could surpass that of
Germany or Japan in terms of GDP, within the next three
to four decades. Although North Korea's economic system
appears to be on the verge of a collapse, it brings in its wake
huge mineral resources and a large, cheap workforce. Even
though this reunification may not be without risks, Goldman
Sachs feels that it can be made viable by restricting inter
Korean migration and adopting policies similar to those in
the case of Hong Kong/China.
Reduction in China Export Slowdown
China had been experiencing a decline in exports since
November last year. However exports from China fell at
their slowest pace in nine months in September 2009. The
shipments from China dropped 15.2 percent to US$115.9
billion as compared to September 2008 (a recent survey of
economists had estimated the average decline at 21 per
cent). The fall in the rate of exports decline was mainly on
account of shipments to the US and the European Union
picking up.
11

The banking and financial
services industry, like many
others, is changing
fundamentally and is in a state of
rapid transition. Banks have
become complex financial
organisations offering a wide
variety of services to
international markets and
controlling billions of dollars in
cash and assets.
12
PERSPECTIVE
Business
Intelligence in
BFSI
Gateway to greater profitability
- Sanjay Mehta, CEO, MAIA Intelligence
Supported by the latest technology, banks are striving to
identify new business niches in order to develop customised
services, implement innovative strategies and capture new
market opportunities. With further globalization,
consolidation and turmoil in the financial industry, the
banking sector is becoming more complex by the day.
Furthermore, the modern financial industry has brought
greater business diversification. Some banks in the
industrialised world are entering into investments,
underwriting of securities, portfolio management and the
insurance business. All put together, these changes have
made banks a potent entity in the global business
community.
Business Challenges
The evolution of the financial services industry is fraught
with challenges and opportunities. Over the last several
years, financial modernisation, industry consolidation, rising
new institutions, shifting trends in borrowing and lending
and emerging technology, have influenced and affected the
operation of financial institutions.
Institutions are in a perpetual balancing act with credit risks
on the one side and satisfying the changing needs of their
customers with a wide variety of products, such as
mortgages, home equities, credit cards, lines of credit,
savings and checking accounts, insurance and investment
products, on the other.
In addition, with money laundering on the rise around the
 PERSPECTIVE
world, regulatory response has also increased. It focuses on
an institution's lack of consistent internal controls, poor
governance and oversight. Financial institutions need to be
able to estimate and review risk and compliance with
regulations such as Basel II and mandatory capital
requirements. Now, more than ever, banks need better
understanding of key indicators and best practices for
decision making in all areas of operations, including:

Improving customer service and retaining customers

Acquiring new customers using competitive market
initiatives

Enhancing sales and service

Pricing and analysing return on investment

Managing risk and preventing fraud

Drawing financial flows, valuations and forecasting
Technology Challenges
Apart from their core solutions, organisations need to have
software applications, preferably based on a service-oriented
architecture (SOA) addressing data and information
management to proactively analyse and learn from large
volumes of transaction data.
The primary challenges that a typical bank or financial
services company would face are:

Consolidation - Data for reporting typically resides in
multiple systems with no interface between these
applications. While the data is refreshed on a daily basis
in one application, the previous day's data is lost if not
loaded in the central data warehouse. Companies need to
invest in an ETL Tool.

Volume - A large number of reports are required on a
daily/weekly basis for the ongoing sales, marketing and
customer campaigns and schemes.
Industry Solution
Fierce competition, sharp decline in margins and
profitability, tighter regulatory and disclosure norms and the
need for robust risk management and early warning systems
have compelled organisations to look at data warehousing
and business intelligence solutions to manage their
businesses more efficiently and effectively.
Companies use data warehousing solutions normally for
profitability analysis and to enhance their risk management
capability. They use customer relationship management
(CRM) solutions to enhance their ability to manage and
grow their customer base in the most desired manner.
In the Indian context, most banks have already implemented
or are in the process of implementing an enterprise-wide
core system to facilitate processing of transactions
seamlessly across the enterprise. Many of them have also
aggressively implemented a multi-channel delivery capability
including e-commerce and ATMs. Deploying a data
warehousing and business intelligence capability will be the
logical and immediate next step for banks in their strategic
use of information technology.
Business intelligence aids organisations with critical insights
into core business strategies and strategic policies. It reveals
concealed trends in the past as well as the present and
reveals future obstacles that the company may not have
otherwise been aware of.
Traditionally, financial institutions have invested money and
effort in predictive and descriptive models to understand key
influencers and predict changes in the business by analysing
the data collected in daily business operations. Business
intelligence may be used to design reports and executive
dashboards as well as to understand risk and fraud,
determine marketing return on investment and improve
business operations at every level. Global competitive
advantage requires highly developed data analysis to improve
customer profitability, manage risk, reduce operating costs
and provide better service offerings.
CRM solutions, when implemented and integrated correctly,
can help significantly in improving customer satisfaction
levels. Data mining helps the industry to analyse and
measure customer transaction patterns and behaviour. This
can aid in creating forward-looking suggestions that will
help to:

Segment and predict behaviour of homogeneous groups
of customers

Detect patterns of fraud

Identify causes of risk, create sophisticated and
automated models of risk

Uncover hidden correlations between different
indicators

Create models to price futures, options and stocks

Optimise portfolio performance
What Can Business Intelligence Do for You?
The ability to make fast and reliable decisions based on
accurate and usable information is essential to all business
enterprises.
Business intelligence provides the user with a competitive
advantage as it supplies timely information about customer
relations, markets, suppliers, emerging trends and patterns,
thereby delivering the right information to the right person
at the right time.
In addition to greater profitability, business intelligence
provides the following business benefits:

It helps in identifying loyal customers with better ability
to sell services that address specific customer needs

It allows for differentiation in the eyes of a customer
13
 PERSPECTIVE

It facilitates better exploitation of changing and services industry effectively track and optimise the
widening markets performance of the campaign and its components, measure

It uses a customer centric approach focused on the performance of the campaign in terms of sales benefit
optimizing the lifetime value of the customer and retention benefit, access and track cost per lead,

It allows concentration on financial budgeting, cost calculate revenue and return on investment, improve lead
control, and risk management quality through segmentation, streamline lead generation

It looks at new ways to minimise costs, while increasing and sharing, track the status and outcome of referrals in
profitability and shareholder value by effectively sales pipeline, compare status of in- progress referrals over
managing consumer relationships multiple time periods, explore the possibility of a new
product or service in a particular market segment
Customer Analytics
Operational Analytics

Customer Segmentation Analysis

Customer Loyalty Analysis
Call Centre Operator Scorecard - number of questions

Customer Credit Scoring actually asked as against standard number of questions

Customer Life Time Value to be asked

Customer Churn Analysis
Lead Activity Exception Report

"Recency", Frequency and Monetary Analysis
Leads Delivered Report

Customer analytics helps the company acquire ideal
customers, maximize customer value, determine and retain
profitable customers, identify ideal customers for cross-
selling techniques, manage risks, identify the time of the year
when customers get raises or bonuses so that financial
schemes like bonds and term deposits can be timed better.
Marketing Analytics

Product Preference Study

Attribute Preference Mapping

Market Segment Analysis

Target Market Identification

Market Basket Analysis

Campaign Performance Management - Leads analysis,
Sales and Retention Benefit Analysis, Product wise
break-down of Sales and Retention
Marketing analytics can help the banking and financial
About the Author
Sanjay Mehta
CEO, MAIA Intelligence
Operational analytics prevents crucial data from getting lost
by loading it in the data warehouse using an ETL tool.
Also, the reliable data reports along with their graphical
format, aid in effective presentation, analysis and corrective
action by the management. The deployment of such reports
results in considerable time saving.
Performance Analytics

Number of loan accounts

Average loan amount per branch

Loan to deposits percent

Current recovery rate percent per branch

Non-performing assets percent
Performance analytics results in better loan management,
interest income management and credit risk management.
Loan management results from taking into cognisance of
various aspects such as the average loan amount per branch,
the type of loan taken the most, the customer segment that
defaults the most, the current recovery rate, annual loan-loss
record, average outstanding amount per customer or
account, total non-performing assets, loans that have
defaulted the most, the share of non-performing assets per
branch, etc.

Sanjay leads a team of Interest Income management accounts for aspects such
technocrats with a vision to as interest income generated through loan accounts, interest
change paradigm in the income generated through inter-bank loans, branches
business intelligence (BI) earning the highest interest income, high income customer
space and make it available to segments, etc.
the masses. Sanjay has 14 years of experience in
the software product business. Sanjay, who holds a Credit Risk management looks into the loans of various
Bachelor of Engineering Degree in Electronics from types that are approved by different branches, the reasons
Mumbai University, is a Microsoft Certified for which loans are rejected, percentage of delinquent loans,
Professional and ISB Alumni. distribution of delinquent accounts by buckets, and
percentage of delinquent accounts written-off.

14
 SOLUTION SPOTLIGHT
1KEY Agile
BI Suite
A business intelligence solution from
Agile FT
A successful BI tool must
provide a highly interactive
interface, flexibility and intuitive
reporting that facilitates decision
making. In addition, users must
be able to access any or multiple
enterprise data sources.
1KEY Agile BI Suite is a comprehensive Business
Intelligence (BI) application catering to the strategic, tactical
and operational levels of data analysis and reporting needs
of multiple vertical industries. It is a single layer, inter-
operable, ground-up built, end-to-end BI product. An
integrated offering with modules to pick and choose from, it
enables organisations to deploy the BI framework with
minimal investment.
Features

Scalable and adaptive SOA

Dashboards and visually stunning reports

Dynamic Expression and Query Builder for ad hoc
reports

Connects to multiple applications and multiple databases

Performance to handle silos of data

Intuitive and friendly user interface
The BI framework may be implemented through the use of
one or more of the following modules:
Online Analytical Processing
1KEY Agile Online Analytical Processing (OLAP)
transforms raw data to reflect the real dimensionality of the
enterprise as understood by the user, and gives remarkable
performance on the ever growing size of the databases.
It connects to and synchronises with multiple raw databases
and creates an OLAP database in a user desired flavour. It is
akin to having a middleware engine, where the data can be
15

restructured and cleansed, allowing the users to create their
own OLAP Data-Warehouse with ETL Process. The
advantages of OLAP include:

Calculations and modelling applied across dimensions,
through hierarchies and/or across elements

Trend analysis over sequential time periods

Slicing subsets for on-screen viewing

Drill-down to deeper levels of consolidation

Reach-through to underlying detail data

Rotation to new dimensional comparisons in the viewing
area
1KEY Agile TREE
The solution has an intuitive visual data representation of
OLAP and raw data in a hierarchical tree based drill down
expandable structure. 1KEY Agile TREE is used to drill
down into a number and see the relative importance of each
of its constituent parts. While drilling down into any
dimension at any node in the tree, the OLAP client ranks the
next level of detail from left to right by value and percentage
of the total. Hence, the user can readily grasp the relative
importance of any group of products, sales regions,
customers, or any other dimension of the cube. The
advantages of 1KEY Agile TREE are:

It allows users to read OLAP models, SSAS cubes,
query-based OLAPs.

It is built on the concept of on-demand load which
increases performance.

It allows users to do further filters, displaying the results
in charts, setting other aggregates like percentage and
min/max counts, and also export and email. Users can
save their own layouts or what they drill from any other
model.
16
SOLUTION SPOTLIGHT
1KEY Agile CUBE
The solution is a comprehensive data analysis, data mining,
and multi-dimensional visual reporting solution. It is a
powerful tool conceived to help business users understand
their data, compare and contrast scenarios, and deliver this
information inside and outside of their organisation. The
module has the "rapid-in" memory cube which represents
raw data for multi dimensional analysis.
With 1KEY Agile CUBE, the user can visualise multiple
charts within cubes based on selected data. Users can drill
down into raw data in any manner they require using the
easy-to-understand pivot table functionality like in Excel,
and instantly render the desired output. The advantages
include:

The powerful data architecture allows the customer to
slice and dice information efficiently and provide for an
extremely intuitive experience.

Regardless of the perspective, data can be rendered to
answer business questions - and it allows business users
to focus on business rules rather than creating dozens of
reports.

It has numerous runtime customisation options that
help users to create on-the-fly reports and layouts with
various permutations of dimensions for runtime
analysis.
1KEY Agile VIEW
This module provides users the flexibility of analysing data
and creating complex reports of great business value. It has
been engineered to fully address the BI needs and reporting
requirements of an organisation. The advantages of this
module include provision of two-dimensional tables for
runtime analysis, grouping and column customizations with
parent-child relationships, drill down and drill back
functionalities.
1KEY Agile CHART
1KEY Agile CHART is a graphical representation and visual
report which represents business performance through
meaningful diagrams. It helps drive organisational
achievements by giving information in a consolidated and
easy to understand manner. Its advantages include:

Capability to filter and change the chart type (column,
bar, line, pie, dial gauges, speedometers, heat maps and
many more data visualisation methods) on run time to
derive more value from data available directly from the
graphic representations.

Customer segmentation, forecasting and trend analysis
are all made easy for proactively managing and
monitoring business processes.

Run-time user definable drill down and drill back
functionality.
 SOLUTION SPOTLIGHT
1KEY Agile Key Performance Indicator (KPI)
KPIs are high-level snapshots of a business or organisation
based on specific pre-defined measures. Typically a
combination of reports is needed to correctly depict and
measure KPIs. The reports may include global or regional
sales figures, personnel statistics, real-time market
information, or anything else that is deemed critical to an
organisation's success. In developing KPIs, a user or
developer defines target performance levels and then
decides the best way to represent variance from that target.
Business users are empowered to set the KPI values on their
own without depending on the IT team. The advantages of
this module include:

Visualisation of key performance data effectively with
graphical pointers

Convey performance results quickly with visuals

Monitor red zones and define threshold levels to set
indicators and trigger alert deliveries

Link individual KPIs to corporate goals

Allow goals to be observed with the help of different
warning metrics which switch on as defined, and give the
user a quick view of how well or how poorly each goal
is met.

Give business executives a high-level, real time view of
the health of a company by visually displaying vital
statistical information about the company.
1KEY Agile DASHBOARD
This module gives a single window view of all types of
numbers, facts and figures in multiple ways, and provides for
multi-data presentation. Users can define their own
Dashboards with a combination of multiple reports on one
single screen. The advantages of this module include:

The dashboards, which are lightweight extensions, would
access only the required portions of data and be rapidly
built.

The value is high as data can be disseminated quickly to
a large number of employees and thus eliminates the
need for labour intensive data gathering workflows.
1KEY Agile TICKER
1KEY TICKER is an enterprise alternative to Yahoo
Widgets, Google Gadgets, Vista Sidebar, Apple Dashboard.
What makes it stand out is that it is part of a BI reporting
solution with presentation layers which are similar to
consumer applications. This module is meant to beam
commercial enterprise data (which could be across multiple
enterprise data sources) to all authorized users. The
advantages include:

It is a handy application which can bring life to the
desktop and change the way users work with reporting
data. It does not affect the desktop's performance or
jeopardise the commercial data in any way.

It authenticates the user with a 1KEY Agile server with
all permission rights and then beams role-based data in a
scheduled manner.
1KEY Agile REPORTER
1KEY Agile REPORTER is a client-side application that
builds reports based on query model. Using a simplified
interface, one can link multiple queries and create on-
demand reports. 1KEY Agile REPORTER is a generic
report writer for designing compliance reports, pre- printed
forms, vouchers for printing and viewing. The advantages
include:
CIOs are able to deploy an
enterprise-wide, secure
dynamic reporting platform
in as less as 6 weeks
irrespective of the database
setup of the existing core
application.

Developers can drag and drop fields to arrange data
fields on a page intuitively.

It gives freedom to create a range of simple to complex
reports.

The intuitive reporting integrated development
environment allows the developer to do multiple event
formatting, runtime scripting for each cell with J#, C#
and VB.net.

It has formula and function editors which can be
embedded with reports and enhanced formula builders
having VB Functions, as well as Financial, Math,
Conversional, String and Aggregate with advanced
conditions and multiple operators
1KEY Agile QUERY EXPERT
This module has a dynamic query engine with expression
builders and model creators. It provides the facility of using
a simple graphical interface to build SQL statements and
create views in a database.
The module has graphical panes that display the SQL
statements visually and a text pane that displays the text of
the SQL statements. One can work in either the graphical or
the text panes.
17
 SOLUTION SPOTLIGHT

1KEY Agile SCHEDULER

1KEY Agile SCHEDULER enables users to schedule their reports as per the
recurrence pattern in a variety of formats like PDF, TXT, XLS, HTML, MHT
and RTF to be stored on a hard disk or emailed to respective business users, or
to Share Point. This module automates the complete process of reporting and
avoids the cumbersome work of manually creating and delivering reports to
respective business users on a periodic basis.

1KEY Agile FILE READER

1KEY Agile FILE READER is a utility that imports data from Text Files,
Excel Files and stores it into 1KEY Agile CUBE or 1KEY Agile VIEW for
direct reporting and analytics.

The advantages of this module include:

Users can choose single and multiple files and sheets at one instance.

Users can select data range on their own.

Users can select data columns in the required format for analysis.

Users can save layouts and use the same whenever required.

1KEY Agile CONSOLE

1KEY Agile CONSOLE is a powerful enterprise administrative security system

for managing the application with user rights, authentication, log writing, back-
ups and permissions. It has modules like My Desk, All Managers, User Roles
and Report Rights, SMTP settings, Control centre.

This module has active directory integration for single sign-on. It also has
The solution has a service oriented architecture with web services and offers integration with third
party services. It connects to multiple servers through OLEDB, ODBC, MAIA
comprehensive data OLAP, SSAS, SAP and XML.

analysis, data mining, 1KEY Agile User Hierarchy, Role Based Security

and multi- 1KEY Agile User Hierarchy, Role Based Security is provided in 1KEY Agile.
The access control over complete business information is well mapped as per
dimensional visual the employee hierarchy of the organisation. The information displayed as a part
of reports is trimmed as per the user logged into the system. 1KEY Agile
reporting solution. It provides full end-to-end control of sharing and display of business
information.
is a powerful tool

Parametric Control: 1KEY Agile uses "parametric control" for controlling
conceived to help access to business information which is available to users for their reporting
needs. Parameters are mapped to the user hierarchy of the organisation and
business users this governs the access to the relevant data.

Parameter Mapping: The parameters defined in the system are mapped to
understand their data, each field based on the User Hierarchy maintained in the organisation.

Access Control for Business Information: Information displayed will be
compare and contrast based on the parameter considered and mapped to the Role based - User
Hierarchy of the organisation.
scenarios, and deliver
With 1KEY Agile BI Suite's client as well as web interface, CIOs are able to
this information deploy an enterprise-wide, secure dynamic reporting platform in less than 6
weeks. Irrespective of the database setup of the existing core application, the
inside and outside of solution can assist organisations in creating a single reporting structure in a
heterogeneous database environment. Large enterprises are already reaping the
their organisation. business benefits from 1KEY Agile deployment.

18
 www.agile-ft.com

Agile Financial Technologies Pvt Ltd Agile Financial Technologies Agile Financial Technologies Pte Ltd
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Views expressed in this publication do not necessarily represent the views of Agile FT and the information contained herein is only a brief synopsis of the issues discussed herein. Agile FT makes
no representation as regards the accuracy and completeness of the information contained herein and the same should not be construed as legal, business or technology advice. Agile FT, the authors and
publishers, shall not be responsible for any loss or damage caused to any person on account of errors or omissions.