Transformative Banking - Go Digital with Disruptive Technologies

Transformative Banking - Go digital with disruptive technologies

issue 16 inside this issue From the Managing Director’s Desk

From the Managing Director’s 1 Dear Readers, Desk As we settle down in the digital era, there is a lot to look at Banking 2020: Technology 2 and contemplate. Business, as we know it has changed. Disruption in Banking Millennials are pushing companies to the edge, when it comes to customer experience. Competition is getting 5 Commercial Lending Resurgence stiff, with startups eating away your market share. And the workforce is demanding anytime anywhere work flexibility. Mobile Imaging Technology 8 Changes the Face of Banking So, what is it that as a bank you could do to ride this wave of transformation? Newgen Product Portfolio 11 This edition of our research based newsletter talks about Research from Gartner: 12 just that. The article on ‘Banking 2020’ gives you a sneak-peek into what the future looks like Hype Cycle for Digital Banking and what all you need to do to be prepared. There is a link to an interesting video in the article, Transformation, 2015 which you must watch. The article on ‘Commercial Lending Resurgence’ talks about the need to balance risk management with customer experience in today’s times. We also take a look About Newgen 47 at how Mobile Imaging technology can empower your field force to be more efficient and Newgen at a Glance 48 productive.

Newgen has helped many of its global clients become market leaders through innovative solutions. We have over 200 banking clients from all across the globe. Some of our prominent clients include ICICI Bank, First Caribbean International Bank, Abu Dhabi Commercial Bank, Ecobank, Alex Bank and East West Bank. Our key solution accelerators in banking industry include Account Opening, Commercial and Retail Lending, Loan Origination (Commercial and Consumer Loans), Credit Cards, Trade Finance, Wealth Management, Payments and Tab Banking.

This edition also carries an insightful report from Gartner on ‘Hype Cycle for Digital Banking Transformation’ that throws some interesting facts around technology trends that will drive the industry forward.

I hope you will enjoy reading the newsletter.

Best Regards, Featuring research from Diwakar Nigam MD Newgen Software 2 l Transformative Banking – Go digital with disruptive technologies Newgen istheonlycompanygloballytobeincluded BPM-Platform-Based CMFs,iBPMs,andCCM* in thefourlatestMagicQuadrantsforECM, technology/about/ombudsman/omb_guide2.jsp and Objectivity”onits website, research, see“Guiding PrinciplesonIndependence information ontheindependence andintegrityofGartner from thesefirms,fundsortheirmanagers. For further by itsresearchorganizationwithoutinputor influence or funds.Gartnerresearchisproducedindependently Directors mayincludeseniormanagersofthese firms Boardof entities coveredinGartnerresearch.Gartner’s include firmsandfundsthathavefinancial interests in Gartner isapubliccompany, anditsshareholdersmay its researchshouldnotbeconstruedorused assuch. Gartner doesnotprovidelegaladviceorservicesand research mayincludeadiscussionofrelatedlegalissues, are subjecttochangewithoutnotice. Although Gartner of suchinformation. The opinionsexpressedherein warranties astotheaccuracy, completenessoradequacy sources believedtobereliable.Gartnerdisclaimsall information containedhereinhasbeenobtainedfrom priorwrittenpermissionisforbidden. The Gartner’s or distributionofthispublicationinanyformwithout of Newgen’s productsand/orstrategies.Reproduction endorsement publication doesnotindicateGartner’s All rightsreserved. The useofGartnerresearchinthis Gartner clients.©2016Gartner, Inc.and/oritsaffiliates. syndicated researchserviceavailabletoallentitled and wasoriginallypublishedaspartofGartner’s permission, All GartnerresearchisusedwithGartner’s supplied byNewgenisindependentofGartneranalysis. technologies ispublishedbyNewgen.Editorialcontent Transformative Banking-Godigitalwithdisruptive http://www.gartner.com/ . Disruption inBanking 2020: TechnologyBanking customer thataremoredirectandrelevant. services. They continuetoinnovatefindwaysofinteractingwiththe innovative, high-touchtransactionsandthetraditionalmodesof Hence, banksaretryingtoachievethebalancebetweendelivering services. and isthereforedemandinginnovativemethodsforavailingbanking them. The millennialsinparticularpreferbankinganywhere,anytime focusing onbuildingnewchannelsforinteractingandtransactingwith Today, Banksareadaptingtochangingconsumerbehaviorand Well, Iwouldpreferallthreewheretime,placeandmediumdon’tmatter. • • • Here’s howyourcustomersexpecttotransactwithbankin2020

Banking onthego From theconvenienceoftheirhome While onvacation–relaxingabeach

Source: Newgen

Transformative Banking – Go digital with disruptive technologies l 3 Social media and the banking industry banking Social media is also dramatically impacting the presence on industry and pushing banks to establish their They are engaging with their customers prominent social sites. and creating via social media, analyzing the conversations By being proactive another exceptional channel of experience. for their and responsive, they are ensuring a better experience customers. consider ‘in-person’ leading survey showed that customers A important attributesinteraction with the bank as one of the most personalof banking. Social media is able to provide that With anconnect by facilitating a two-way communication. complianceimproved targeting, enhanced advertising, full – social mediasupport, more efficient ROI tracking and more in a bank’s now has the potential to play a meaningful role marketing plan. robust social media strategy helps banks connect with their A customers, gives a human interaction experience, and makes If executed with diligence, their communication more effective. social media posts can add another dimension and the much- in a relationship with consumers needed depth to the bank’s marketplace where there is intense competition and nothing like brand loyalty exists. With the introduction of newer modes of payment, prepaid With the introduction of has been There higher usage. instruments will have a usage of such instruments for settling significant traction in the and other ‘app’-driven transactions such radio cab service bills and online purchase of merchandise. as utility bill payments system along with the with the inclusion of cash-out Moreover, expand faster. payment banks, their usage is only going to Banks should not ignore mobile wallets With Mobile wallets witnessing a higher level of adoption across geographies, it is quickly becoming a robust customer engagement tool and an imperative to increase the customer The true value of mobile wallet lies in the time and the base. money saved, as well as the convenience experienced. It is possible that in future we could see banks serving fewer It is possible that in future They may relationships with them. clients but having deeper that they are really good at rather focus only on those products things to everyone. Digital touch points than trying to provide all basic answer to several consumers’ are proving to be a viable at the branch could banking needs, while in-person interactions continue for critical and sensitive issues. however The branch can remain the central hub of activity; technology it needs to blend physical presence with digital environment where consumers can to create a ’phygital’ channels. design their own experience through their preferred in banks Phygital transformation has in fact already begun online to with measures such as moving current functionalities making banking convenient. to reinvent The visionary banks have gone one step further to engage and customer experience by providing newer ways started partnering provide value to customers. Banks have also and create with technology start-ups to accelerate innovation Banker”, of “Virtual new propositions. One such example is that between a collaboration tool that allows video conferencing bank advisors. customers in branches and remotely located sharing The tool is supported by an integrated document and printer functionality as well as an integrated scanner Thus, by to send, receive and retrieve signed documents. integrating digital channels into branches and vice versa, banks provide customers with a true omni-channel experience, where branches and online platforms are used interchangeably! Combining the physical with digital Combining the physical 4 l Transformative Banking – Go digital with disruptive technologies customer servicehumanoidrobotatitsflagship Tokyo outlet. toward employingnon-humanstaff withtheintroductionofa In April 2015,Bankof Tokyo-Mitsubishi UFJtookthefirststep humans, allowingthemtoservecustomersmoreeffectively. insights andperspectives. They couldworkside-by-side the customer. Robotscouldthereforeserveasarepositoryofnew – allowingapersonalizedgreetingtobedispatchedthe – arolethathasnothingtodowithtellingandtransactions immediately alertsthethinkingcustomerserviceconcierge checked outaspecificbankoffering on hismobiledeviceand systems automaticallydetectthatthecustomerhadrecently to augmenthuman-drivenprocesses.Inthelatter(AI), Banks areevenlookingatusingrobotsorartificialintelligence Robots and AI invadebanking connecting Systems,Processes,PeopleandThings. matters. HereisaninterestingvideothatdepictshowNewgencanhelpyoudeliverjustby Deliver afuturisticbankingexperiencetoyourcustomerswherePlace,Time orMediumnolonger Source: Newgen market leaders. their audienceandboostproductivitycouldwellbetomorrow’s curve oftechnologytoimprovecustomerexperience,engage own future.Proactivebanksthatchoosetotranscendthe communication technologies,therebypavingthewayforits aims tokeepupwiththeadventofintelligentdevicesand Change isamustifthebankingandfinancialservicesindustry employ acustomer-facingrobot. is thefirstamongstworld’s majorfinancialinstitutionsto Japanese, EnglishandChinese.Itisspeculatedthatthisbank reception area. The robothasbeennamedNao,andspeaks At aheightof58cm,weighing5.4kg,therobotworksat Transformative Banking – Go digital with disruptive technologies l 5

Source: Newgen significantly, and significantly, are providing opportunities across lending institutions, requiring more standardized processes and better understanding of exceptions New and upcoming sectors with immense potential that cannot be neglected Regulatory oversight has intensified managing new and evolving requirements is a challenge – particularly from the perspective of accurate reporting regulations Risk management is becoming a holistic process Aggressive competition from other banks and emerging non-banking lenders is a threat

• The Need of the Hour – Transformation Business The recent turn of events augur well for banks and financial to They also create a compelling need institutions globally. steer away from the shadows of 2008, and rope in incremental changes that deliver a competitive advantage to banks early on in the rapidly stabilizing economic environment. Slowly • • • This is one of the best showings in a long time. there is an all new set of challenges that awaits However, them as they gear up for this battle to remain competitive and compliant. in the four latest Magic Quadrants for Magic ECM, ECM, for Magic Quadrants Magic four latest in the CCM * , and iBPMs CMFs, BPM-Platform-Based Lending continues to be a focus area for banks and has Lending continues to be a focus area for banks For instance, witnessed some major developments globally. ride over the Commercial Lending has been on a roller-coaster past few years. It remained the most profitable business arm for banks till 2008, when the financial crisis came along as a huge global meltdown brought with itself sweeping The reality check. changes that transformed the operational and strategic framework of this critical financial instrument forever. The focus on the customer and the top-line growth clearly got sidelined, while a wave of skepticism seeped in, pervading all was characterized by the prioritization This skepticism through. of risk management and compliance measures over customer The processes experience and operational responsiveness. became rigid and strenuous as the internal business policies An air of got aligned with the tight external market conditions. sheer conservatism gripped the commercial lending market, from Corporate and Industrial Lending to Commercial Real Estate, Equipment Financing, and Consumer and Small Business Lending. however there are clear signs of revival as the Recently, As international markets have consolidated and diversified. a sign of increased confidence, large, small and foreign- related banks have increased commercial and industrial loans substantially in the last one year. Commercial Lending Resurgence Commercial Newgen is the only company globally to be included included to be globally company the only is Newgen 6 l Transformative Banking – Go digital with disruptive technologies          and donotsupportprocesslevelchangesassociatedwith infrastructure. These monolithicapplications arehardcoded an in-houseapplicationbysettingupateamandcorresponding within thecommerciallendingprocess. They havetodevelop or systemstomanagethepolicies,processesandstructures Large Bankscanleveragehardcodedenterpriseapplications Application The Traditional Approach –BuildinganEnterprise meet thisimperative. Banks mayadoptoneofthefollowingthreetechnologypathsto Choices The Three relationships. with theneedtowinmorecustomersandexpandprofitable a balancebetweentheneedtoreduceoperatingcostsandrisk transform theirbusinesses.Bydoingso,theyaimatachieving relying onproventechnologiesandtrusteddomainexpertsto modernizing thecommercialloanoriginationfunctionby lack ofprocessinnovations. They arenowmovingtowards imposed ‘cocoon’ thatimpliedlimitedtargetmarketsand but surely, mostforwardlookingbankshaveshedtheself- Source: Newgen figure 1.BPMbased Transformative Approach        

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          #    ! (!   !                       " #$%           to functionattheproductivitylevelsthattheyarecapableof. with disparatesystemstoworkwith,employeeswillnotbeable of processchangesduetoitsrigidsolutionarchitecture. Also, introduce incrementalimprovementsbylimitingtheflexibility lending process.However, itwillnotallowthebankto the bankwithregardstoautomationofcommercial A pointsolutionwouldpossiblyaddressthecurrentneedsof The PointSolution Approach compromising thebusinessandoperationalagility. time consumingaffair, prolongingthetimetomarketand Any changeintroducedatalaterstagecanbecostlyand aspects oftheprocessandnotend-to-endautomation. Moreover, thesesolutionsprovideautomationonlyincertain the evolvingmarketdynamicsandregulatorycompliances. • solution whichenables: providing thebankwithleversto implement afutureready BPM facilitatescollaborationbetweenbusinessandIT, Why BPM objectives. flexibility. Ithelpsbanksmeetbothitsshortand long-term focusing oncontinuousprocessimprovementandoperational customer experienceandsatisfaction,BPMcandeliverby business agility, reducingbusinessrisksorenhancing Whether itisthequestionofincreasingprofitability, ensuring framework furtherenhancetheproductivitylevels. seamless integrationwiththirdpartysoftware&mobility what theapplicationdemands.Customizableuserinterface, enable businessestorunprocessestheywantratherthan Document ManagementSystem(DMS)andworkflowwhich such astherulesengine(BRMS)tostorecreditpolicies, The BPMplatformsconsistofconfigurablecomponents strategy ®ulatorycompliancelevelchanges. stakeholders todrivethesolutionbasedontheirbusiness & “buyingoff theshelf”alongwithadaptabilitytobusiness Management (BPM).Ithastheinherentbenefitsofboth“build” is aframeworkbasedapproachcalledBusinessProcess end-to-end transformationofcommerciallendingprocesses The pervadingtechnologywhichbearsthecapabilityofan The Transformative Approach –BPMBasedSolutions

predictability, transparency andbetterdecision-making an optimizedworkflowthatenables improved TAT, Automating thelendingapproval process andimplementing Transformative Banking – Go digital with disruptive technologies l 7 – The BPM – BPM framework must Quick Time to Market New Products – Implementing to Quick Time infrastructural change. It just an IT a BPM platform is not and technology to align the must transcend both business with the market dynamics. Simply organizational processes transitions in product and service put, it must support quick offerings Enterprise Level Collaboration: business units have the capabilities which facilitate distinct systems to talk/interface to multiple underlying and (LOB’s) This interoperability is critical for applications seamlessly. scenarios. creating efficiencies across key decision making core solutions Integration with third party credit agencies & must be a salient feature of the project Exposure View of Group Level Risk Unified tools at platform must provide a holistic set of analytical associated. every stage of the process to assess the risk driven risk Real-time process monitoring along with model need assessment systems can enable this key business

Conclude To byThe current positive sentiment of the market complimented clearly indicaterampant industrial growth across most sectors institutionsthe need to take bold steps. Banks and financial adopt advancedmust not shy away from the imminent need to BPM driven systems that support business innovation. With IT the fear of the unknown perishes, agility and process visibility, allowing organizations to undertake this transformation head on. 3. 4. 5. This facilitates – The ability to change The ability to change – – Banks must roll out the Business Impact Analysis Power in the Hands of Business needs and and modify processes according to the market Banks must business strategy is a vital cog in the wheel. this agility within look for platform based solutions that offer IT their core framework, without the need for massive driven customizations enterprise wide process transformation in a smooth manner, leveraging the existing infrastructure as much as possible. The training and complexity involved in the rollout must never go overboard or become overwhelming for the business capturing information in an actionable format and capturing information in an actionable format / PDF document in the bank’s reproducing it in a Word defined format for user reference passing non-value add data entry activities to back office / passing non-value add operations teams over all existing loan systems to Building a wrapper layer to all relevant information centrally give stakeholders access to online forms. Digitizing the proposal Segregating tasks to enable the RM to focus on sales and Segregating tasks to enable

2. 1. 5 Things to Consider while Implementing a BPM Things to 5 Platform selection and What banks should be looking for during BPM on the following implementation is recommended to be based criteria: A BPM based integrated platform supports the entire credit BPM based integrated platform supports A This improves lifecycle as well as exploit new delivery channels. business units, the efficiency and performance of all lending across the which ultimately increases customer satisfaction entire credit lifecycle. • • • 8 l Transformative Banking – Go digital with disruptive technologies edge inafiercelycompetitivemarket. This opensupthemarketforbanks andgivesthemawinning field staff tocapturecustomerinformationanytimeanywhere. enhancement andsizetruncationfeaturesthatempowersthe Sophisticated mobileimagingapplicationshavebuilt-inquality to provideon-timeandon-the-goservicestheircustomers. advancements inmobileimagingtechnology, allowingthem well becomea‘Win-Win’ situation forbanks,withtherecent to work–atrendthatisbecomingpopular. This couldvery Majority ofthebankstaff todaypreferstobringtheirowndevice Your OwnDevice’ orBYODprogramsworldwide. 2018, therewillbemorethanonebilliondevicesusedin‘Bring their owndeviceforworkpurposes. Another reportsaysthatby by 2017,50%ofemployerswillrequireemployeestobring way banksapproachcustomers. A recentreportpredictsthat space, anothermajordevelopmenthasbeenwitnessedinthe Continuing withthetransformativewaveseeninbanking Face ofBanking Mobile Imaging Technology Changesthe BPM-Platform-Based CMFs,iBPMs,andCCM* in thefourlatestMagicQuadrantsforECM, Newgen istheonlycompanygloballytobeincluded • • • include: edge overtheircompetitors.Someofthestepstakenbybanks achieve operationalexcellenceinvariousaspectsandwinan Banks mustnowleveragethesetechnologicalinnovationsto as recordsthatcanbeaccessedandwhenneeded. enterprise systemsbystoringallformsofcustomerinformation between amobileenabledcustomerinterfaceandthecore Content Management(ECM)platformscanformthebridge and enhancetheoverallcustomerexperience.Enterprise reduce thecycletimeforallcustomerfacingprocesses ensure fasterprocessing. A combinationofthetwocan of thisinformationbacktothecorebankingsystems Equally importantisthesecureandreal-timetransfer capturing customerinformationaccuratelyandprecisely. For bankshowever, mobileimaginggoesmuchbeyond

Managing delinquencies onthe’ Opening newchannelsofBanking Enhancing FieldForceProductivity

fly’ Source: Newgen

Transformative Banking – Go digital with disruptive technologies l 9 – Field agents can use their mobile 2. Opening New Channels of Banking critical stage of Customer acquisition is the most engaging and Smooth on-boarding can sales lifecycle in the banking industry. and numerous go a long way in creating sustainable loyalties agility and cross/up selling opportunities for banks. Execution help banks gain robust process framework at this stage can significant brand value and market competitiveness. offices Banks have traditionally relied on their branch intensive to manage this crucial process that involves They documentation around sensitive customer information. have shied away from using any other channel, as it involves numerous validations and may lead to several compliance This has restricted their target markets and created issues. a huge cost and infrastructural burden on those operating in geographically widespread markets. banks a reliable Advanced mobile imaging technology offers and flexible solution that empowers their field agents to initiate customer on-boarding ‘on the fly’. With smart mobile apps, agents are well equipped to conduct customer need analysis, educate potential customers, and influence their decision making, while delivering an unmatched customer experience. It has allowed first time right capture of important customer documents and seamless information transfer to the core banking system for real-time processing. Thus, mobility brings the bank to customer’s doorsteps, in his office and all the other places that he can be. Physical presence through branch offices no longer defines the market territory for banks. Field agents equipped with smart phones/ tablets or any other mobile devices can go to remote locations – After sales services After and Retention – Customer Servicing for building sustainable customer are an important aspect several cross/up selling relationships and creating alerts, The mobile platform renders real-time opportunities. query updates, grievance pop up reminders, customer and wedding handling, reminders for key events like birthdays anniversaries etc. for the field executives. Monitoring and Reporting supervisors, devices to send real-time MIS reports to their tracking ensuring complete process visibility and performance head office. Using these reports, the team from the bank’s of various agents leads can easily gauge the occupancy rates and enable dynamic work allocation. – Real-time application processing – Often, field agents are required to provide detailed product related information to prospects. Simple mobile devices like smart phones/tablets give them the access to latest product brochures, videos and other marketing material to help close the deal. 1. Enhancing Field Force Productivity 1. Enhancing Field Force point of contact with first are a bank’s Field sales executives make or break the deal through their the customer and often organizations field service operations conduct. Still, for many enterprise information systems, are the last frontier where tools stop workforce monitoring solutions and productivity challenges, insufficient Communication making an effect. as the top information and operational time lags are cited agents. reasons for underperformance by most field apps can result Sophisticated mobile imaging and collaboration for the in significant time savings and improved productivity These apps can lead to seamless interactions field force. bank’s and the clients. With their offices, between the field-sales staff, brings down improved accuracy in information capture, these Banks efficiency. the operational expenses and creates process from lead can use them across all stages of sales lifecycle servicing. management to customer on-boarding, to customer Prospecting – Mobility enables dynamic lead management critical They can carry out field force. capabilities for the bank’s around in the tasks involved in prospecting stage while moving through mobile field. Some of the key functionalities enabled searching for leads, technology include viewing assigned leads, pending items, scheduling tasks, doing follow-ups, and viewing alerts and notifications. Customer Need Analysis – Field agents need access to comprehensive information around individual profiles that can help them categorize prospects appropriately and make successful sales pitch. Depending on demographics, lifestyle, spend patterns and future needs, mobile-enabled applications can suggest the right products for the customer. Customer On-boarding can significantly increase the conversion percentage for field agents by creating minimum time lag in customer decision application forms Through mobile technology, making process. can directly be filled on a mobile/tablet and sent online to the processing center for quality check and further processing with close tracking of application status. Sales Insights 10 l Transformative Banking – Go digital with disruptive technologies Magic QuadrantforEnterprise ContentManagement,31October 2016 G00293563 Magic QuadrantforBPM-Platform-Based CaseManagementFrameworks, 24October2016G00276724 Magic QuadrantforIntelligentBusinessProcess ManagementSuites,18 Magic QuadrantforCustomerCommunications ManagementSoftware,21December2015G00272479 disclaims allwarranties,expressedorimplied, withrespecttothisresearch,includinganywarrantiesofmerchantabilityorfitnessfor aparticularpurpose. ratings orotherdesignation.Gartnerresearch publicationsconsistoftheopinionsGartner * Gartnerdoesnotendorseanyvendor, productorservicedepicted initsresearchpublications,anddoesnotadvisetechnologyuserstoselectonlythose vendorswiththehighest trigger animmediateactionfromthecentraloffice. the systemonareal-timebasiswithpaymentupdatesthat the customerinaninformedmanner. They canthenupdate their mobiledevicefromthecentralbankservertoapproach details includingaccountnumber, dueamount,dateetcon to fetchthedelinquencylistsalongwithcompletecustomer the processtoatablet/smartphone.Itenablescollectionagents challenges associatedwithcollections/recoveriesbyextending Mobility offers a smart and innovative approach to tackle various visibility. monitored toensurecompletetransparencyandprocess for financialinstitutions,fieldexecutivesneedtobeconstantly introducing stringentguidelinestogovernthecollectionprocess related issuesforthebank.WithCentralregulatorybodies significant timelag,creatingseveralcomplianceandbusiness that happensinthefieldisavailabletoentitiesupstreamaftera Agents createseveralloopholesintheprocess. Any transaction communication betweenthebanks,Collection Agencies / on theirmultiplecreditbasedproducts.Lackofpertinent Banks havelongcarriedtheriskofdelayed/deferredpayments 3. Managingdelinquencies‘onthefly’ economic spectrum. areas andextendexistingserviceacrossthesocio- and drivebusiness,allowingbankstoexpandintonewservice August 2016G00276892 ’ s researchorganizationandshouldnotbeconstrued asstatementsoffact.Gartner Experience Mobile Imaging Technology enhancesCustomer the customers. completely revolutionizedthewaybankstaketheirservicesto acting astheconnectinglinktoCoreBankingSystem,has of information-mobileimagingtechnology, backedbyECM capturing informationfirst-time-righttoinstantprocessing expectations withregardstobankingservices.Rightfrom to enhancedcustomerexperienceandincreases agility totheprocessmanagedelinquencies.Italladdsup field force,opensupnewchannelsofbankingandlends on-boarding bringsaboutradicalchanges.Itempowersthe when appliedtotraditionalbankingprocesseslikecustomer banking operations.Disruptiveinnovationslikemobileimaging Mobile Imaging Technology hasaddedanotherdimensionto the chancesoffraudanymanner. mobile platformallowscomprehensiveaudittrails,eliminating roll ratesandcharge-offs. Real-timeMISreportsgeneratedon process risk,butalsoenhancesagentefficiency, minimizing not onlycutsdownontheoperatingcostsandassociated communication andexpeditedaccountreconciliations.Mobility legislative mandates/statelawsthroughseamlesscustomer banks tobetterplantheirfinances.Itensurescompliancewith collection anditsentryintothesystemconsiderably, enabling collections processbringsdownthetimelagbetweenpayment and avoidingfundsstagnation. A robustmobileenabled play akeyroleforbanksinmanaging‘floatmoney’ efficiently In amulti-productandmulti-debtrelationship,mobilitycan

Transformative Banking – Go digital with disruptive technologies l 11

Source: Newgen Image-Based Check Clearing & Payment ChequeFlow is an image based Cheque Processing Newgen’s Advanced and highly solution for inward and outward clearing. Verification, Automatic Signature configurable sub-systems for FOREX Cheque Processing, PDC Management, ECS. Enterprise Level Scanning Solution image document for engine scanning production a is OmniScan types of documents in capture. It enables scanning of different properties without human intervention using powerful different The inbuilt export and integration feature allows using scripts. it as a scanning workstation with any Document Management system. and Workflow Customer Communications Management Customer Communications Management Omni Output Management System (O2MS) Newgen’s for better delivers smarter and targeted communications customer experiences. It enables secure outbound rich designs communication on improved templates with multiple and graphical representation of analytics across & retrieval of distribution channels. In addition easy archival customer correspondences for presentment, and efficient request resolution are achieved using this enterprise application. which supports multiple platforms. NEMF provides plug and which supports multiple platforms. NEMF provides advanced data and play components, enterprise level security, with backend document capture and adaptors for integration systems to enable rapid low code app development.

Newgen Product Portfolio Newgen win the four latest Magic Quadrants for Magic ECM, Magic ECM, for Quadrants Magic four latest win the CCM * , and iBPMs CMFs, BPM-Platform-Based Newgen is the only company globally to be included included to be globally company the only is Newgen Newgen Enterprise Mobility Platform The Newgen Enterprise Mobility Platform (NEMF) is a smart choice for enterprises to release mobility imperatives and enable digital transformation. It is a framework to develop, deploy and manage highly configurable hybrid mobile apps, Enterprise Content Management Suite Newgen OmniDocs Enterprise Content Management (ECM) Suite is the market leading solution that enables “digital transformation” for an enterprise. It allows the end-to-end management of enterprise content like paper documents, forms and electronic files, right from capture to processing, to distribution and disposition. The Newgen Intelligent Business Process Platform based Case The Newgen Intelligent Business Process Platform workers with Management Framework empowers knowledge rules, native information processes, smart analytics, business collaboration, mobility platform and tools for multi-channel including an interactive interface for social collaboration. Process Built leveraging the Newgen Intelligent Business end-to-end case Management Suite, the CM frame work runs work across life cycle management, redefining how businesses the globe. Case Management Framework Intelligent Business Process Management Intelligent Business Process Management Platform provides a Newgen Intelligent Business Process Suite (iBPS) drive enterprise process platform for business stakeholders to It manages the full range of Transformation. wide Digital tools for content business processes by leveraging advanced case management, integration, process orchestration, dynamic mobility and predictive and on-demand analytics, enterprise in the design social collaboration. iBPS facilitates collaboration and execution of intelligent business processes. 12 l Transformative Banking – Go digital with disruptive technologies making theirdigital bankingstrategiesunsustainable. This analysis anddecisionmaking, applicationarchitectures, and increased agilityofunderlyingmanagement structures, complexity hasnotbeenbalanced withreduced complexity facing side of the business. In most banks, this customer-facing This creates increasing complexityonthefront, customer- data intocustomerworkflowsandthird-party applications. of newappsandtheincorporationbankfunctionality toencouragethecreation banks haveexposedAPIsexternally such assmartphonebankingandtabletapps.More advanced (seeFigure 1),investinginmaturingtechnologies journey reflected inthisnewHypeCycle.Manyhavebegunthedigital and thetechnologiesapproaches thatwillhelpthem,are Bank CIOs’struggletocreate true,sustainabledigitalbanks, The HypeCycle interconnected banks,partnersandcustomers. architectures, andsystems totapintodigitalecosystemsof management, advancedanalyticsandrationalizedagile new andmore effective andprocess forms ofgovernance requires substantialinvestmentinbusiness-ITalignment, comprehensive andsustainabledigitalcapabilities.This facing mobilefunctionalitiesandtechnologiestocreate go beyondearlytacticalandsiloedinvestmentsincustomer- To transformtheir firms intodigitalbanks,bankCIOsmust environments. customer andpartnerecosystemsduetotheirlegacy devices andapps,aninabilitytointegratewithexternal struggle withsustainingsupportforproliferating mobile marketing. Others,fartherdownthedigitalbankingpath, Many today, however, are stillinearlystagesof digital experiences andtocreate newvalueandbusinessmodels. digital technologiestocreate newandimproved customer Banks are intheprocess of becomingdigital,seekingtouse What You NeedtoKnow Analysis ecosystem. enable participationinthefinancialservices architectural, analytic andorganizational foundationsthat customer-facing capabilitieswithinvestmentinthetechnical, To betrulydigital,banksmustpairanemphasison Hype CycleforDigitalBankingTransformation, 2015 • success: reflected, eachessentialtobanks’mid-long-termdigital categories ofdigitaltechnologyandsupportingdomainsare Innovation, 2014”)increating thisnewHypeCycle.Five for DigitalBanking,2014”and“HypeCyclePayments Cycle forBankOperationsInnovation,2014,”“Hype offices, wehavecombinedthree pastHypeCycles(“Hype across thetotalbank,includingfront, middleandback Because sustainabledigitalbankingrequires transformation banks. disillusionment, aplungethathasalready beguninleading around openbankingasabouttobegintheplungeinto underlies why, forexample,wehavepositionedthehype • -facing Source: Gartner(July2015) recognize asdigital Figure 1.BanksAre BecomingDigital Have nothingwe Only useandplan Agile applicationar Customer banking solutionsanddigitalwallet consumerhub to includerationalizedplatforms suchasopen,unified technologies suchassmartphone bankingandtabletapps reduced complexity andagility, suchasopenbank digital marketing business techniques 16% 30% , goingbeyonddiscrete mobile Don't know chitectures 6% Source: Gartner Research, G00277716, M. Knox, Knox, M. G00277716, Research, Gartner Source: thatpromote efficiency, Have digitalbusiness Plan digitalbusiness activities 24% activities 27 July 2015 July 27 24%

Transformative Banking – Go digital with disruptive technologies l 13 As of July 2015 Plateau of Productivity Productivity obsolete before plateau Mobile Wireless Payment Systems (for Nonmature Payment Markets) Smartphone Banking more than 10 years Mobile-Originated P2P Payment Solutions Mobile-Originated P2P (for Mature Payment Markets) Slope of Enlightenment Slope of Enlightenment Near-Real-Time Low-Value Payment Systems Low-Value Near-Real-Time drive innovation with investments that provide only lower investments that provide drive innovation with They must focus on investments that levels of business value. disruptive and transformative. are that many channel- and The Priority Matrix shows such as smartphone banking technologies transaction-related will always maturing. While there rapidly and tablet apps are tactical opportunities be new digital capabilities that present and services and in-branch – such as geolocation products banks to create video – the strategic opportunities enabling essential for sustained value which are streams, new revenue open bank (such as open, unified digital banking solutions, business models for banking), systems and programmable have longer time frames. capabilities Many of the transformative technologies and digital banking For example, open, unified interrelated. are draw upon open solutions and digital wallet consumer hubs bank system designs, which in turn: enabled by BIAN (1) are and and (2) enable blockchain, smart contracts standards; business models. programmable Mobile-Originated Proximity Payment Systems time time 5 to 10 years Trough of Trough Digital Wallets Digital Wallets Tablet Apps Apps Tablet Disillusionment Disillusionment Social Messaging App Wallet App Wallet Social Messaging Cloud-Driven Business and IT Services Cloud-Driven Business and IT In-Branch and ATM Video Video ATM In-Branch and Remote Commerce Emulation Payment Systems Logical Data Warehouse Logical Data Warehouse Public Cloud 2 to 5 years BIAN Standards Peak of Peak of Inflated Expectations Expectations Private Cloud Computing Big Data Management Intelligent Bank Operations Open Banking Programmable Business Model for Banking Smart Contracts Hybrid Cloud Trigger Trigger Innovation less than 2 years less than 2 years Advanced Analytics Advanced Plateau will be reached in: expectations Wearable Banking Apps Banking Wearable IoT for Banking IoT Open Bank Systems Digital Payment Advisor Digital Payment Mobile Imaging for Bank Staff Mobile Imaging for Bank Staff Mobile Imaging for Bank Customers Blockchain/Distributed Ledgers Open-Source Banking Systems Biometric Mobile Banking Authentication Biometric Mobile Banking Open Unified Digital Banking Solutions Public Cloud for Core Banking Digital Personal Financial Advisor Digital Personal Financial Digital Wallet Consumer Hub Digital Wallet Business Ecosystem Modeling Geolocation Products and Services Ecosystem development, which is supported capabilities blockchain/ such as open banking, smart contracts and distributed ledgers designs and assists Agile management and organization business models for banking such as programmable supplied by BIAN standards and sourcing alternatives such sourcing and supplied by BIAN standards hybrid cloud as private, public and and decision processes Automation of operational operations and advanced making such as intelligent bank analytics systems, and supporting characteristics such as those systems, and supporting Figure 2. Hype Cycle for Digital Banking Transformation, 2015 2. Hype Cycle for Digital Banking Transformation, Figure Source: Gartner (July 2015) Source:

The Priority Matrix and capabilities This Hype Cycle is focused on technologies in the high and transformative categories. CIOs cannot that are • • • 14 l Transformative Banking – Go digital with disruptive technologies Source: Gartner(July2015) Figure 3.PriorityMatrixforDigitalBankingTransformation, 2015 low moderate high yearstomainstreamadoption benefit transformational

esta er 2to5years less than2years As ofJuly2015 Tablet Apps Smartphone Banking Computing Private Cloud Digital Wallets In-Branch and In-Branch and ATM Video Services Geolocation Productsand Wallet Social Messaging App Systems Emulation Payment Remote Commerce Public Cloud Value PaymentSystems Near-Real-Time Low- Mature PaymentMarkets) Payment Solutions(for Mobile-Originated P2P Payment Markets) Systems (forNonmature Mobile WirelessPayment Staff Mobile ImagingforBank Customers Mobile ImagingforBank WarehouseLogical Data Operations Intelligent Bank Hybrid Cloud Digital Payment Advisor and IT Services Cloud-Driven Business Authentication Biometric MobileBanking Big DataManagement Banking Solutions Open UnifiedDigital Wearable Banking Apps Systems Proximity Payment Mobile-Originated

o1 er morethan10years 5 to10years Banking Public CloudforCore IoT forBanking Modeling Business Ecosystem Advanced Analytics Smart Contracts Model forBanking Programmable Business Open Banking Open BankSystems Hub WalletDigital Consumer Advisor Digital PersonalFinancial Ledgers Blockchain/Distributed BIAN Standards Systems Open-Source Banking Transformative Banking – Go digital with disruptive technologies l 15 eate, and nal pilot with a trusted ging business models that are ging business models that are nal and external ecosystems of partners ferentiate the individual business model ferentiate components that can be leveraged by others as raw materials instead of understanding the end-to-end and how it can be differentiated. business process than business models. being used in the banking industry at each stage of the Gartner Business Model Framework. business models in the banking industry. the emerging to employees do an internal control pilot that gives more to adapt and change existing business models. of existing partners to customize one stage of your group existing business model. business model for that can leverage your programmable banking. Define and dif Become a designer of building blocks or platforms, rather Identify the existing business models used by your bank. Identify the existing business models used by Make a catalog of the emer Evaluate gaps between your existing business models and Pick one of the gaps at a specific stage, such as cr Pick another gap and do an exter Identify new inter

• • Gary Olliffe and Eric Knipp are co-authors of this analysis. • • • • • • Some of the technologies used to enable programmable used to enable programmable Some of the technologies APIs, open data and marketplaces) Web business models (like business The programmable widely available today. are be built and used today by model platform can, therefore, financial instruments and the existing/legacy referencing Internet In the longer term, the programmable of Things. an enabler of the programmable business model will be platforms and metacoin from which will emerge economy, goes beyond a generalized notion of value exchange that monetary exchange. business model for do not expect the programmable We for five to 10 years due banking to become mainstream and operating to barriers like closed industry structures regulatory models, and concerns about intellectual property, risk – compliance, security and operational and reputational industry. especially in such a highly regulated User Advice: Most banks Kristin tag">R. Moyer A programmable business model for banking A programmable Position and Adoption Speed Justification: Programmable Business Model for Banking Programmable Analysis By: Definition: Off the Hype Cycle Off had been three This is a new Hype Cycle, combining what Operations separate Hype Cycles (“Hype Cycle for Bank Banking, 2014” Innovation, 2014,” “Hype Cycle for Digital 2014”). and “Hype Cycle for Payments Innovation, On the Rise and adoption by banks collectively and individually, the value the collectively and individually, and adoption by banks will decline, and tactical investments more from received being competitive will flip from these tactical investments at best, and competitive to wasted investments differentiators inhibitors at worst. Unless these more strategic capabilities advance in maturity strategic Unless these more enables internal and external manage to create, ecosystems business and adapt their own business models. Programmable dynamic and disposable. They enable banks to models are not only survive, but thrive amid volatility by competing with of business models rather than just one. hundreds have one (or a small number of) fixed, centrally planned and have one (or a small number of) fixed, centrally engage, offer, business model to ideate, create, controlled and retained. monetize and adapt the way value is created At times the bank is leveraging users outside the enterprise value (for example, using hackathons to support to create the overall business model. This ideation), but it still controls that may not to value creation is an “inside-out” approach change how the company makes money. business models for banking expose assets Programmable business functionality and such as intellectual property, so that users inside or outside of the bank business processes their own business manage, adapt and retire can create, and/or use models. Banks, people and “things” can provide business business models. Programmable programmable easily dynamic and disposable because they are models are self-service platforms. through changed and retired created, on one business modelThis means banks no longer need to rely sustainability value. Rather, sufficient shareholder to create with multiple business an “outside-in” approach comes from managed and maintained by internal created, models that are and external ecosystems. This enables banks to multiply value being two-sided markets (with one side through creation customers and the other side being ecosystems that create value (where business models and value) and network effects as the number of customers and ecosystems increase). increases 16 l Transformative Banking – Go digital with disruptive technologies mechanisms. Following theescrow example,instead ofhaving expectations ofsmart contractsasverificationand enforcement well asdistributedcloudcomputing environments, are raising metacoin platformsandtheirdistributed ledgercomponent,as party usingadeterministicapproach. However, theriseof contract” asithastheabilitytobe executedbyatrustedthird the parties,thisescrow intoanescrow contractturns “smart toanotherpartybasedontheagreementdelivery between escrow agentisabletoautomatetheconditionstrigger the specifiedconditionsofcontracthavebeenmet.If toanotherpartyifandwhen makedelivery who willinturn with athird party(let’s sayabank,calledanescrow agent), defines thearrangementbywhichonepartydepositsanasset conditions betweenpartiesinvolved.Theescrow agreement which isalegaldocumentthatoutlinesthetermsand contract conceptisnotnew–forinstanceanescrow contract, acting asagentstoexecutethesmartcontract. blockchain toreach agreements amongtwoormore parties smart contractisamethodofusingdistributedledgeror emulate thelogicofcontractualclauses.Adistributed Smart contractsusuallyalsohaveauserinterfaceandoften of acontract,oreliminatestheneedforcontractualclause. facilitates, verifiesorenforces thenegotiationorperformance Position and Adoption Speed Justification: Speed Adoption and Position Definition: By: Analysis Smart Contracts Maturity: Penetration: Market Rating: Benefit • • eduction –Byreducing thetimeandcostofbringing • • Impact: Business

Agility –Byenablingrapidtimetomarketandtheability Customer experience–Byputtingmor Cost r Revenue gr to adaptvolatilebusinessconditions. programmable business model. be closertotheactualcustomerthanprovider ofthe hands ofusers(sometimestheactualcustomer)thatmay new businesscapabilitiestomarket. infinite numberofecosystems. solutions andmonetizationstrategiesfrom apotentially Embryonic Asmartcontractisacomputerprotocol that FabioChesini owth –Byenablingthecreation ofentirely new Transformational Lessthan1%oftarget audience e control inthe Thesmart clauses related to internal or external customeragreements. orexternal clauses related tointernal transformation perspective,theycanstreamline contract life cycleofthecustomerrelationship. From anoperational approach toonethatiscontract-centricthroughout theentire smart contractsrepresent ashiftfrom aproduct-centric how theycouldchangethebank’s valueproposition. points withexistingprocesses todeterminetheirimpactand business andoperationalprocesses, identifyingintegration Recognize thepotentialofsmartcontractstotransform Identify themostrelevant usecasesforyourorganization. PeerNova, etc. different smartcontract initiativessuchasCodius,Ethereum, Productivity. technology willtake5to10yearsreach thePlateauof “smart” wayofdoingbusiness;therefore, webelievethis might require anin-depthreview andupdatetosupportthis execution. Alsotheexistinglegalandcomplianceframeworks making thisastrong barrierforfulltrustlesssmartcontract Metacoin platformsare alsoinearlyalphaandbetastage, example, clearmatics,Ethereum, HyperledgerorRipple). by themetacoinplatformsappearingonmarket(for rapidly,This technologyisevolvingvery drivenprimarily language, isthekeychallengeforthisnewtechnology. runtime environment providing adeterministicprogramming language toautomatecomplexagreements, andforatrustless development. Theneedfora“turingcomplete”scripting Smart contractscriptinglanguagesare currently under for afulltrustlessmechanism. escrow agentsamong theparticipantsinadistributedledger or theycanevenselectasinglegroup ofanonymous be agreed betweenthepartiestoprevent therisktocollude, (escrow agents)parties’ agreement. Thisgroup ofagentscan party (escrow agent)agreement intoatrustlessgroup of asingletrustedthirdexecute thesmartcontract,turning single one;theseselectedpartiescanthenactasagentsto involved mightselectagroup of third partiesinsteadofa the smartcontract,withinadistributedledger, theparties a singlethird party(escrow agent)empowered toexecute Maturity: Penetration: Market Rating: Benefit Impact: Business Advice: User Embryonic Work todevelopaclearunderstandingofthe Transformational From astrategicbusinessperspective, Lessthan1%oftarget audience Transformative Banking – Go digital with disruptive technologies l 17 . Often, BEM can provide high value in: BEM can provide eas of opportunity where a closer collaborative eas of opportunity where Developing innovative ideas. New ideas can come the ecosystem and by insights across combining from access by ecosystem opening up bank systems for direct solutions using the participants to build customer-desired assets. bank’s relationship with customers, partners and other third with customers, partners and other third relationship new you can offer parties could add value, or where the services or capabilities (such as through products, public of open development banking platforms, offering participants’ APIs or apps) for integration into ecosystem business processes. an end-to-end perspective Develop elements that provide rather than being limited to your of the relationships, models, This will include business process organization. and collaborative governance information architecture models. levels. In a marketplace Attaining new performance in the hands of customers, is increasingly control where from, the banks must influence, and accept influence financial services ecosystem to gain operational broader improvements. Developing new ways of working. Each bank has its own constraints. By working competencies and resource core competencies can be with ecosystem partners, these core limitations in new ways. resource combined and address analysis and mapping to define the ecosystem and the analysis and mapping capability modeling to identify actors in it; (2) business and actor and the relationships the capabilities of each the the capabilities across between interdependencies analysis to identify the decisions ecosystem; (3) decision and the implications for the that need to be made and (4) performance supporting information architecture; needed to analysis to identify the metrics and measures operate and change the ecosystem. that you fully of your key ecosystem partners to ensure their understand their strategies and goals, and how own or could be, intertwined with your are, interests strategies and goals. access to emerging markets involves working closely with access to emerging Pr Identify ar partners. Use EA to facilitate collaboration with ecosystem As part of your BEM initiative include: (1) stakeholder As part of your BEM initiative for each Include a short version of enterprise context oviding accesstonewmarketsandcustomers

• • • • Business Impact: • • • •

s BEM is an e personalized bank oduce new products and services oduce new products Mary Knox; Marcus Blosch Mary Knox; Marcus Business ecosystem modeling (BEM) is focused Business ecosystem modeling include all current and potential members of your businessinclude all current ecosystem. services services intents to by capturing customers’ needs and and services within their own align payment products and workflows environments efficiencies firewall Extend EA practices beyond the walls of your enterprise to Meet customer demand for mor Impr Respond to globalization and fragmentation of markets Respond to globalization and fragmentation Rapidly intr Continue to contain costs while driving operational Adopt digital strategies that extend beyond the bank’ Adopt digital strategies that extend beyond

However, BEM is currently at an early stage in banking, which lags BEM is currently However, some other industries. This, coupled with the continued pressures of regulatory compliance, leads us to position it at post-trigger 20% with an estimated seven or eight years to plateau. User Advice: • • • and products ove howtheycontextualizetheir • • • • Position and Adoption Speed Justification: Analysis By: Definition: Business Ecosystem Modeling Business Ecosystem on extending the scope of enterprise architecture (EA) to the of enterprise architecture on extending the scope devices, partners, counterparties and network of customers, ecosystem. up the organization’s that make other organizations techniques In the context of banks, it is the extension of – such as business capability or functional and approaches ecosystem. modeling – to the bank’s important input into digital banking initiatives. It helps banks important input into digital banking initiatives. as financial services and potential roles identify their current exchange services suppliers and users (such as using foreign a partner) and users of other nonfinancial services (such from as HR services). This enables them to develop differentiating capabilities and the capabilities strategies based on their core sourcing and needs of other ecosystem members, while functions. commoditized and noncore business-outcome- BEM is a logical extension of a bank’s driven EA activities as banks seek to: 18 l Transformative Banking – Go digital with disruptive technologies However toreach maturity, itwouldhavetoallowusersto: define certainpaymentparameters. have startedproviding more flexibility totheircustomers some bankssuchasCommonwealthBankofAustralia(CBA) consumer hubprofile stage.Atthisstage, isatanembryonic facilitate thisprocess. for paymentandloyaltyprograms, includingadashboard to analytics andenhancedaccountmanagementcapabilities including from multipledigitalwalletproviders. Itoffers control andmanagealltheirotherdigitalwalletcapabilities, e post-transactiondetails,suchascopiesofdigital • • ovide pretransaction adviceandinformation on“best” • egate, transfer andexchangeloyaltypoints • ovide anaggregated stream ofpaymenttransactions • iew transactionsacross multipledigitalwalletsolutions, • Justification: Speed Adoption and Position Definition: By: Analysis Digital Wallet ConsumerHub Maturity: Penetration: Market Rating: Benefit models andinnovations. We expectBEMtoenablefuture business financialservices

Map outlocationswher Captur Pr Aggr Pr V storage. or stored, andhighlightriskprofiles associatedwithsuch receipts, andtagreceipts andtransactions. payment card oraccountstobeused. currencies, andpaywithpoints. schemes, includingtheabilitytoconvertpointslocalfiat programs. across allpaymentcards andaccounts,aswellaloyalty including from third parties. ecosystem membersandresources indiversegeographies. local partners.BEMcanhelpidentifyandmanagerelevant Emerging Adigitalwalletconsumerhuballowsitsusersto ChristopheUzureau; AlistairNewton High 1%to5%oftarget audience e paymentcard detailsare used Thedigitalwallet interfaces. wallet consumerhubswillalsoenhance digitalbanking digital bankingtransformation,while investmentsintodigital This contextualizationprocess willstrongly contributetothe experience, notjusthowtheirspecificLOBsare organized. their product developmentaccording totheoverallcustomer products andmakesure andservices, thebankprioritize This willsignificantlyimprove thecontextualizationofbanks’ information collectedonconsumers’consumptionpatterns. reliance onthesesolutionsincrease, sowilltheamountof consumers maximizetheirpurchasing power. Asconsumers’ advisortohelp aswelltheprimary and digitalIDservices, potential toensure yourbankstatusasaprovider ofsecurity digital walletconsumerhub,enablecustomers: hub overame-toodigitalwallet.Asstartingpointforyour User Advice: User • Market Penetration: Market Rating: Benefit Impact: Business o settheirsecurityparameters–forexample,definea • o access,trackandmanagemultipleloyaltyprograms • will needatleast5yearstodeliveronROI. position thisprofile atpost trigger20%andexpectthatbanks indirect, notfee-basedrevenue. Asaresult, wecurrently products suchascredit cards –mostoftherevenue willbe difficult tocreate thancompared totraditionalpayment The businesscaseforadigitalwalletconsumerhubismore interfaces toenableconsumersdefinetheirpreferences. and AppStores, 2015”–aswelltoinvestintonewdigital Systems profile in“Hype CycleforOpenBankingAPIs,Apps up theirbankingoperations–seetheOpen-Source Banking To achievesuchafunctionallevel,bankswillneedtoopen experience consistency. digital bankingcapabilitieswillreduce costaswellimprove management functionalityiscriticalforadoptionandreusing applications toyourdigitalwalletofferings. Account even totallymigrate–from yourexistingdigitalbanking Consider whichareas offunctionalityyouwillreplicate –or

Repopulate newpaymentcar T T sites oncard replacement orrenewal. account. merchants orusageatspecificlocationsforagivencard limit inpurchasing value,authorizeonlycertaintypesof while planningtoenablepaymentsvialoyaltypoints. Prioritizeproviding adigitalwalletconsumer Transformational Digitalwalletconsumerhubshavethe Lessthan1%of target audience d detailstoalldigitalwallet Transformative Banking – Go digital with disruptive technologies l 19 This technology Less than 1% of target audience Less than 1% of target ganization on the business value of the IoT. value of the IoT. ganization on the business The IOT can lead to higher lending returns High While banks may not initially feel that they a market assessment/impact analysis and ideation and analysis assessment/impact market a Alistair Newton; Christophe Uzureau A digital payment advisor is a smartphone Embryonic For example, IoT can increase revenue, decrease costs, decrease revenue, increase For example, IoT can service, risk, improve return reduce on assets, improve etc. the IoT to impact you in the short activities if you expect be required term, and to identify which new skills will partners. and sourcing and to find staff Educate the or Conduct

User Advice: Benefit Rating: Market Penetration: Maturity: Digital Payment Advisor Analysis By: Definition: Position and Adoption Speed Justification: • • Business Impact: application that dynamically advises consumers on the most application that dynamically advises consumers of funds or funding payment solution, source appropriate strategy to use for any particular transaction. The advisor has access to users’ payment and loyalty details and their wider pools of alternative funds and data. It knows the physical location of users (including their actual location within The objective of the advisor is to store). a physical retail payment more-informed help the customer make “better,” decisions. should be offering their customers this sort of functionality, their customers this sort of functionality, should be offering that this sort of machine-led intelligence they must recognize If they as influence customer behavior. will increasingly these sorts of solutions to their customers, banks do not offer (from more effectively monitoring property usage and so monitoring property effectively more (from (such as untapped collateral streams on), new revenue risk management. In the effective management fees) and more we expect to see things become banking future, longer-term new market opportunity. an entirely customers and represent remains at an early stage of development. It will increasingly at an early stage of development. It will increasingly remains by the next offered link to many of the functions that are generation of personal financial management (PFM) solutions digital wallet applications. through as well as those offered As a stand-alone application that integrates all this additional in its early stage of development is reflected functionality, that models as of yet only theoretical are the fact that there this full suite of solutions. provide

The IoT David Furlonger; Kristin R. Moyer; Stessa B David Furlonger; Kristin The Internet is of Things (IoT) for banking Embryonic as a technical and business focus for the domain. There may fall with digital business, so IoT natural synergies are within the purview (CDO). of your chief digital officer Establish an individual to head up IoT initiatives and act

User Advice: • Position and Adoption Speed Justification: Definition: IoT for Banking Analysis By: Maturity: the network of physical objects that contains embedded the network of physical objects that contains with technology to communicate and sense or interact the objects’ internal It state or the external environment. communication, comprises an ecosystem that includes things, use for applications and data analysis that banks can efficiency and customer delivery. organizational Cohen (technologies, standards, processes and so on) is very immature, processes (technologies, standards, experimentingand many financial institutions have just started solutions inwith it. Only a small minority have deployed that have Those organizations environment. a production that in areas deployed IoT initiatives tend to have done so technology (OT),have traditionally been known as operational In the rather than IT. monitoring and security, such as ATM smartwatches could be incorporated into future, near-term – for example, a smartwatch could detectbanking relationships alert proactively that customers have changed time zones and payment issuers for fraud and their digital wallets and the card we expect to see “things” future, purposes. In the longer-term become banking customers. For example, a connected vending and could already, machine accepts payments for purchases orhave the ability to make its own payments for restocking banks to determine This would require in the future. repair and cash management payment, line of credit appropriate services services for the vending machine, market these to the vending machine, validate the identity of the vending machine, and manage the execute a smart contract and then onboard vending machine as a small business customer. reach believe it will take five to 10 years for the IoT to We given in the banking industry, the Plateau of Productivity Barriers to adoption include privacy, its immaturity today. lack of a compelling business case and lack of skills. security, mean networking and processing the falling costs of However, few economic inhibitors to adding sensing and are that there or operational facilities costing as communications to products little as a few tens of dollars. 20 l Transformative Banking – Go digital with disruptive technologies systems inashorter timeframe. and vendorsunsaddled withlegacymayachieve open bank accelerate openbanksystemachievement, andstartupbanks Architectureas BankingIndustry Network(BIAN)helpto bank systems.Work across associationssuch banksinindustry standard approaches tothecreation andoperationofopen and practices;immaturityof bestpracticesandindustry replacement cycles;theneedforneworganizational models saddled withlegacysystems,includingcore systemswithlong the plateau.Thisisbecausemostbanksandvendorsare with aminimumofeightyearsexpectedbefore theyreach along, theachievementofopenbanksystemsisemerging, incorporation ofbusinessrulesorworkflow, maybefarther aspects ofbanksystems,suchascomponentization,or and usabilityinthecontextofenduser. Whilesome open banksystemsisbasedontheachievementofaccessibility amend pricingandfunctionalcapabilitiestotakeaccount. offeringsservice andtheextenttowhichtheywillneed driven advisorsofthissortwillimpactexistingproduct and Equally, banksneedtounderstandhowtheuseofmachine- will behavewhentheyhaveaccesstoperfectinformation. behavior, bankswillneedtounderstandhowtheircustomers levels. First,asanindicatorofmachine-influencedcustomer digital paymentadvisorsbecauseofitsbusinessimpactontwo structures andpractices. capabilities, andsupportingtechnologiesorganizational consume APIs,incorporationofworkflowandbusinessrules architecture principles, theexposure ofAPIs,theabilityto systems are characterizedbyadherence toservice-oriented ecosystems.Openbank andexternal spanning internal of incorporatingfunctionalityanddatafrom manysources intra- andinterenterprise boundaries.Theyare alsocapable accessible andusableinthecontextofenduseracross Position and Adoption Speed Justification: Speed Adoption and Position Definition: By: Analysis Open BankSystems Maturity: Penetration: Market Rating: Benefit Impact: Business and digitalwalletsolutions. functionality andintegrateitintotheirownplanstooffer PFM tempted todoso.Banksshouldplanfortheexistenceofsuch orthird-partythen otherfinancialservices providers maybe Embryonic Anopenbanksystem’s assetsandfunctionsare Mary Knox;DonFree Mary High Bankswillneedtoplanfortheadventof Lessthan1%oftarget audience Thepositionof services, andin-housedevelopmentincludingprivatecloud. services, solutions, includingpublic,communityandmanagedcloud application designthatblendfunctionalityfrom multiplevendor Similarly, open banksystemssupport“assembly”approaches to upgrades andreducing replacement riskifswitchingsolutions. customization, whileensuringtheabilitytoacceptfuture significantly impacttheabilitytointroduce differentiating operational goals.Thedegree ofbanksystemopennesswill system opennessalsoisimportantformeetingabank’s internal and otherthird Bank partieswithpersonalizedservices. and apps.Theyalsorequire theabilitytopresent customers users –includingcustomersandcounterpartiesthrough APIs ability toexposebankfunctionalityandinformationend supporting digitalbankingstrategiesthatrely, inpart,onthe differentiated product propositions. orservice the physicallocation ofcustomerstodeliverthemenhanced or t confusecomponentizationwithopenness.Debunk • • • • Advice: User Definition: By: Analysis Geolocation Products andServices Maturity: Penetration: Market Rating: Benefit Impact: Business

Don’ Use theopennessassessmentandaudienceidentification Identify theaudiences(suchasinter Assess thelevelofopennessbanksystemsr evaluate upcomingprojects andvendorsolutions. support ofdigitalbanking,prioritizeinvestments,and to pinpointweaknessesinyourcurrent systemsforthe requirements. customers) foropenbanksystems,andtheassociated bankbusinessstaff,internal third-party developersor strategies. support yourbank’s digitalbankingandotherbusiness user. level (businessaswelltechnical)andintentoftheend data theycontaininamannerthatissuitedtotheskill be grantedtothecomponentsandfunctionality, and componentized doesn’t meanitisopen.Accessibilitymust vendor hypebyrealizing thatjustbecauseasystemis Emerging Geolocation-based products and services leverage Geolocation-basedproducts leverage andservices AlistairNewton CIOs: Transformational Open bank systems are essential for Openbanksystemsare essentialfor Lessthan1%oftarget audience nal bankITstaff, equired to Transformative Banking – Go digital with disruptive technologies l 21 egulators. e to become Although core Although core oposals for incremental public cloud oposals for incremental Banking CIOs: Don Free Public cloud for core banking is a derivative of banking Public cloud for core deployments of targeted market segments with lower- deployments of targeted and unbanked/underbanked Microfinance risk profiles. ideal candidates for initial deployments of markets are public cloud processing. familiar with this deployment model. Public cloud more used increasingly are development and test environments to leverage elasticity. Most central banks will not establish a position absent of bank demand for this deployment model. Experiment with public cloud infrastructur Initiate the public cloud conversation with r Submit pr

• User Advice: • • Public Cloud for Core Banking Public Cloud for Core Analysis By: Definition: Position and Adoption Speed Justification: cloud computing used by banks to source their mission- by banks to source cloud computing used public cloud formations These critical systems of record. banking software core shared consist of single-instance, database associated with multientity or bank-specific BPO Banking the Core deployments. This technology replaces by whose adoption varies dramatically technology profile, region. banking is a mature technology, the public cloud deployment technology, banking is a mature typically limited Use cases are banking is immature. of core with banks to small-tier financial institutions (microfinance), bank of larger low account transaction volumes or as subsets portfolios. product elusive all banking tiers will remain adoption across Broad concernsuntil assurances of security and data privacy are adoption regional for even broader Expansive efforts resolved. for by country-specifictreatments legislative will be hindered data privacy that have to be reconciled. have not Although the vast majority of central banks public cloud deployments of specifically prohibited systems, this model has not been embraced production a plurality of global central bank contacts However, either. interviewed public cloud by Gartner privately concede that usage for mission-critical systems is inevitable. Gartner that obstacles to adoption will be diminishing as predicts to over a three- empiric public cloud experiences increase five-year period. Through the Through Less than 1% of target audience Less than 1% of target Integrating geolocation into products and Integrating geolocation into products e empathetic experience to existing and Moderate Recognize the benefits and risks of integrating Recognize the benefits and risks of integrating Embryonic overall service offering. enhanced loyalty points to encourage a example, offering when in a particular retail customer to make a purchase outlet). potential customers. Allow the development of partnership strategies (for Deliver a mor Allow the integration of wider “big data” points into the

Benefit Rating: Market Penetration: Maturity: • • • Business Impact: User Advice: Position and Adoption Speed Justification: geolocation into products and services, and the impact geolocation into products the needs and that geolocation will have in addressing that all of your digital customers. Ensure requirements specifically permission-based, and consider are offerings the use of “toggles” to allow customers to very easily and solutions Start with intuitively turn geolocation on and off. then start to that integrate to loyalty applications, and only product consider how applications align to location-specific of role or location-variable pricing. Recognize the offers who share geolocation in customer conversations – customers you a useful insight into offering their locations with you are the information with care their needs and wants, so treat to the you can add value it where and tact, and only reuse customer. services will allow banks to: to take account of offerings Adapt pricing and product customer need or competitor activity. last year, there has been limited movement on this profile. profile. has been limited movement on this there last year, services and bank to be tailored The potential for products on location is theoretically to customers based specifically a challenge for many banks. very powerful, but remains based solely on the were if this profile As with last year, fraud management, then it would be use of geolocation for includes this profile further along the Hype Cycle. However, products, the integration of geolocation into mainstream It also the challenges in that area. from and hence suffers specifically excludes stand-alone location services, such as which can be found in and branch-finder applications, ATM many mobile banking applications. 22 l Transformative Banking – Go digital with disruptive technologies can leveragedata analyticsaswellcash-flow data. Personal also beaffected bytheavailability of vendorsolutionsthat personal goalsandreceive personalizedadvice. Adoptionwill and budgets,allowscustomers tocreate andmonitor This enablesabank’s systemstoanalyzepasttransactions spending andcashflowtomake itpossibletoattaingoals. planning andautomaticallygenerating suggestedchangesin current financialcashflow, budgetandactionsforfuture-based payment data,customerfinancialaspirationsandgoals–to the customer–includingprofiles andhistorical requires linkingavailabledataanalyticsandinformationabout effective insupportingcustomersandgeneratingrevenue. This of integrationandlinkagesabankmustmakeforDPFAs tobe time tothePlateauofProductivity isbasedonthecomplexity sourcing modelthatrepositions ITasabroker oftechnology. sourcing through restructuring toaccommodate adistributed Bank ITorganizations willhavetoprepare forpubliccloud objectives andeconomiesofscaleonamore granularbasis. to source commodity functionstorealize increased agility industry. Theimpactofthisbusinesschangewillforce banks to accommodatethefastpaceofchangewithinbanking support willincreasingly bederivedfrom sources external requirements. Gartnerpredicts thatresources forbusiness of innovationandameanstorationalizeIToperational accessing banktechnologytosupportbusinessaspirations goals. customer achieveshort-andlong-termpersonalfinancial financial habits.Thisenablesabanktoproactively helpthe financial behaviorgenerallyandaspecificcustomer’s personal aboutcustomer and otherbusinessintelligencetolearn of technologiesthatuseacustomer’s owndata,dataanalytics Position and Adoption Speed Justification: Speed Adoption and Position Definition: By: Analysis Digital PersonalFinancialAdvisor Vendors: Sample Maturity: Penetration: Market Rating: Benefit Impact: Business e thecompetitivelandscapeforpubliccloud •

Explor vendors thatare promoting publiccloudcapabilities. providers. effort Startthe discovery withcore banking Emerging Adigitalpersonalfinancialadvisor(DPFA) isaset StessaBCohen High Mambu;Ohpen;Temenos Group Publiccloudisthefuture modelfor service Lessthan1%oftarget audience Theestimated smartphones, tablets,wearabledevicesanddigitalwallets. appropriate andrelevant capabilitiestoanydevice,including Theirtransformationalvaluecanberealizedservices. bypushing specific. Theywillworkbestwhenimplementedwithinother value belongingto anyparticipantatpointinhistory. participants. With thisinformation,anyonecantracebacka transactioneverexecuted betweenall ledger containsevery database” shared byallparticipantsin anetwork.Thedistributed of developingDPFA capabilities. financial management(PFM)vendorsare stillintheprocess • eate specificusecasesfordeployingDPFA capabilities • • • Advice: User Definition: By: Analysis Blockchain/Distributed Ledgers Vendors: Sample Maturity: Penetration: Market Rating: Benefit Impact: Business eate adataarchitecture that provides afoundationforthis • The Moneyer;Yodlee

Establish PFMcapabilitiesaspartofacompletedigital Cr Aim forasolutionthatusesdataanalyticstopr Develop aclearr Cr to eachtypeofdevicecustomersprefer. and staticinformation. rather thansimplyrepackaging existingbankstatements answer customers’questionsandsolvestheirproblems, your organization duringthenextthree years. data analytics. predicted need)intoaccount,usingBPMtechnologiesand must beabletotakecontext(forexample,locationand transition from basicPFMtoatrueDPFA. Thisarchitecture and create, monitorandactonfinancialgoals. accounts andproducts heldatthebankandelsewhere, personal, familyandsmallbusinesscashflow, connectall banking experiencethatenablesthecustomertomanage Emerging A blockchain or distributed ledger is a “transaction Ablockchainordistributedledger isa“transaction FabioChesini;DavidFurlonger Transformational eWise; Geezeo;MisysBankingandSecurities; DPFAs’ capabilitiesare notchannel-ordevice- 1%to5%oftarget audience oadmap forthedevelopmentofDPFA in oactively Transformative Banking – Go digital with disruptive technologies l 23 oving the oviders that support workflows and 1% to 5% of target audience 1% to 5% of target This technology can be deployed across all This technology can be deployed across Kofax Image Products; Mitek; Newgen Kofax Image Products; High ocesses that require customers to submit paper customers to submit paper ocesses that require Emerging validate government-issued identification. customer experience, rather than on the transaction. applications that are processed in the back office. processed applications that are that bank staff use cases for a variety of situations and the and workflows can bring these documents, images, photos and workflows. into existing bank processes Monitor technology maturity for the ability to scan and Monitor technology maturity for the ability Focus application development on impr Identify pr Evaluate vendor pr

Software; Top Image Systems Top Software; Benefit Rating: Market Penetration: Maturity: Sample Vendors: • • Business Impact: User Advice: • • areas of bank staff who talk to and meet with customers in of bank staff areas midsize business person. This includes consumers, small and (SMB) customers, private and high-net-worth customers. It also includes all lines of business, especially document- loans and mortgages. card, in credit intensive processes to mobile Bankers will be tempted to move existing processes costs and and tablets. While these initiatives will improve returnefficiencies, the Those will not be transformative. initiatives that focus on ways to transform existing processes that enable customers to achieve goals (such as to processes a new house, manage finances, pay bills, pay off purchasing involve the This will probably debt) will be most productive. digitalization of several workflows and business processes, and focus on the customer experience rather than on a single transaction. This technology can also be used to support interactions. digital transformation of banker-customer technology to push existing processes that are traditionally that are processes technology to push existing and office out to the branch staff completed in the back the office. The challenge will be bankers who work outside to transform branches and customer- using this technology faced with high cost bankers are facing interactions. Because Gartner back-office processing, of branch operations and operational this technology to increase expects banks to adopt costs. processing efficiency and decrease The mobile-based The majority of 1% to 5% of target audience 1% to 5% of target The blockchain technology is gaining Hyperledger; Ripple Labs; Tembusu Systems Hyperledger; Ripple Labs; Tembusu Transformational Include blockchain technology as one scenario Include blockchain technology as one scenario Stessa B Cohen Mobile imaging for bank staff describes the Mobile imaging for bank staff Emerging Position and Adoption Speed Justification: Analysis By: Definition: Maturity: Sample Vendors: Mobile Imaging for Bank Staff Benefit Rating: Market Penetration: Business Impact: User Advice: Position and Adoption Speed Justification: technology deployed on smartphones and tablets in branches and with bankers in the field that enables banks to capture documents, and identity documents and photographs to reduce the cost of operational efficiencies and improve and services. products in your strategic planning for 2016, assessing potential risks in your strategic planning for 2016, assessing capabilities. and operational costs, as well as your execution to infrastructures Identify the integration points with existing investments needed. For instance, Earthport assess the future their clearing did a partnership with Ripple Labs to streamline payment for low-value, cross-border and settlement processes services. traction, because it has the promise to transform the traction, because it has the promise For example, “payment transaction flows of any industry. services in the transaction banking business” is one of the most popular use cases being adopted in the banking industry. technology and workflow capabilities for banking have begun technology designed for the mobile capture from to emerge apps. Gartner expects banks to adopt this customer-facing blockchain initiatives are still in the early alpha or beta stage. still are blockchain initiatives true value of the blockchain as a the The market recognizes of a metacoin platform, decoupled stand-alone component the token or virtual the other two main components: from language (for smart contracts). Due and the scripting currency; systems, and the different of distributed to the intrinsic nature consensus in a distributed ledger, to reaching approaches security and scalability, the main concerns center around blockchain framework. Another factor is that most regulatory and their innovation, evolution open-source, initiatives are of these heavily influenced by the creators and support are metacoin platforms. 24 l Transformative Banking – Go digital with disruptive technologies Productivity formore than10years. open-source bankingandresult innotreaching thePlateauof and support.Thesefactorsare likelytodelaygrowth in which provides themwithanannuitystream forcustomization benefit from theprevalence ofthetraditionallicensingmodel, are barrierstoadoption.Onthesupplyside,software vendors cost ofskillstraining/maintainingandsecurityvulnerabilities platform), support,standards (impactinginteroperability), structured product (onthepartofopen-source governance have notchangeditspositionontheHypeCycle.Lackof banking systemsduringthepast12months,and,therefore, We havenotseenanincrease intheuseofopen-source standards) andMifos(core bankingandAPIs). Architecture Project (whichalsoincludessoftware, notjust banking), MyBanco(microfinance), Micro-finance Open source bankingsolutionsincludeCyclos(onlineandmobile relative tohomegrown applications. Someexamplesofopen- and infrastructure –asisthecasewithpackagedapplications appealing inareas ofcommoditizedfunctionality, components boundaries. Open-source bankingsystemsmaybeespecially on knowledgeandexpertisethatliebeyondanenterprise’s CIOs takeadvantageofopeninnovation,whichcapitalizes andlet banking systemsmakecodeavailabletoeveryone, distributing it. and redistribution, subjecttotheconditionsofentity permits free use,accesstothesource code,modification by theOpenSource Initiative. Anopen-source licensetypically available underlicenseanddistributionconditionsspecified an open-source licenseprocess. Open-source software is (like userinterfacewidgets)thatare madeavailablethrough components (likerelationship pricing)andinfrastructure applications (likecard management software orcore banking), • Advice: User Justification: Speed Adoption and Position Definition: By: Analysis Open-Source BankingSystems

Do notadoptopen-sour available viaopen-source software. documentation, samplecodeand othersupportnot party developerstouse,because theywillusuallyinclude software developmentkits(SDKs) are easierforthird- deployment ofappstocustomers. PublicWeb APIsand into third-party developersforthedevelopmentand objectiveistotap open-banking strategyiftheprimary Open-source bankingsystems are banking-specific KristinR.Moyer ce software toexecutean Open-source maintenance costs. the customizationsthathavebeenmade,whichcanincrease also meansthatthere isnovendorthatactuallysupporting vendor dependenceinvolvedwithproprietary applications.It cost benefitofopensource andcancreate thesametypeof providers likeRedHatandothers),whichthenreduces the foropen-sourceservices software (asisthecaseforLinuxand However, corporationsoftendesire maintenanceandsupport source bankingsystems. will create anopportunityforincreasing theinterest inopen- The continuingfocusoncostreduction onthepartofCEOs applications, componentsandinfrastructure becauseitisfree. systems couldreduce thetotalcostofownership power ofopeninnovation.Intheory, open-source banking components andinfrastructure, aswellleveragingthe to havedirect customizationcontr=oloverapplications, Newton devices andback-officesystems. microcontrollers) andcanprovide datawirelessly toother include sensorsandembeddedintelligence (forexample, to thebody(forexample,asmartwatch). Wearables payment –from anelectronic onorattached deviceworn other bankfacilities,performingatransaction,ormaking on alerts,trackingspendingactivity, locatingATMs and perform taskssuchasreceiving alerts,takingactionsbased Business Impact: Business • Definition: By: Analysis Wearable BankingApps Vendors: Sample Maturity: Penetration: Market Rating: Benefit Development Platform Architecture Project; Mifos;MyBanco;Open SmartCard

Evaluate opportunitiestoleverageopen-sour than needed. packaged applicationthatincludesmore functionality involved inevaluating,selectingandimplementinga enable fastertimetomarketandlowercoststhanare components likemicroloans orsmartcards thatmay Embryonic Wearable bankingappsenablecustomersto StessaBCohen;ChristopheUzureau; Alistair Low Cyclos;jPOS;Micro-finance Open Open-source bankingsystems enablebanks Lessthan1%oftarget audience ce Transformative Banking – Go digital with disruptive technologies l 25 The quantity and 1% to 5% of target audience 1% to 5% of target FIS; Malauzai Software; Misys Banking and FIS; Malauzai Software; Moderate Mary Knox Advanced analytics are sophisticated quantitative Advanced analytics are Emerging Securities Advanced Analytics Analysis By: Definition: Position and Adoption Speed Justification: Benefit Rating: Market Penetration: Maturity: Sample Vendors: banking and payment systems via location, specific use and banking and payment will seek out banking apps to so forth. Many early adopters times that they use their smartphones the number of reduce may devices Wearable to perform the same activities. banks to devise new means of opportunities for also offer this application However, biometric customer authentication. is still in an embryonic of development. stage methods (e.g., data mining, prediction, simulation and methods (e.g., data mining, prediction, insights that traditional approaches optimization) to produce – to business intelligence (BI) – such as query and reporting and prescriptive predictive It includes unlikely to discover. are analytics. breadth of data available to banks make this industry fertile breadth for the adoption and use of advanced analytics. The ground challenge digital banking and open banking strategies create for traditional face-to-face means of assessing opportunities to responsiveness proactive for real-time and risks, a desire on the part of banks to create outcomes, a desire improve their that allow them to expand efficient processes more and a desire productivity, markets and improve addressable just competitiveness are for deeper insights to improve some of the factors that have placed analytics high on banks’ priority lists. and banks’ current legacy siloed architectures However, primary of the full range focus on transactional data – instead data that is available – mean it and unstructured of structured use of to make full and productive will take continued effort we position advanced analytics advanced analytics. Therefore, the than five years before as climbing the peak, with more Plateau of Productivity. Despite this positioning, it should be noted that in some risk and fraud detection, banks such as credit specific areas, analytics. with predictive very mature are Wearables are are Wearables Wearable banking apps are an extension banking apps are Wearable When designing digital banking and digital Business Impact: User Advice: Position and Adoption Speed Justification: wallet interfaces, make sure you achieve a fine level of wallet interfaces, make sure to to the authorization process parameterization with regard support wearable-originated alerts and payments. Plan for apps to fail. When developing and deploying wearable banking apps, expect that some apps will fail to gain traction with customers. Gaining experience and expertise in Do not let this experience end digital banking entails failure. experimentation with and use of wearable banking the bank’s apps. Instead, ask for customer feedback, and identify the – customer experience, ease of use, design point(s) of failure and/or adoption of the particular wearable device. Delivering any ROI on investment in wearable apps will be of for use difficult. Banks cannot count on charging extremely services via wearables. of digital banking and digital wallets. They mostly act as a connecting device to contribute to the contextualization of still emerging, and banks face a fragmented market with and banks face still emerging, traditional watches with many device types: smartwatches, bank Few clothing and jewelry. fitness bands, smart features, all devices, developed apps across solution vendors have single device, such as the Apple instead focusing on a remains adoption rate for wearable banking apps The Watch. such as integration uncertain because it will depend on factors of WatchKit with Apple Pay and Passbook and the availability for developers (in the case of the Apple Watch). connect to smartphones that devices usually Wearable and processes handle most origination and authentication Users must be able to set credentials. secure access to related parameters. For example, for payment services, they need an value, type of ability to define origination criteria (such as and or location) for multiple or single transactions merchant that funds to manage a dedicated account (virtual or prepaid) wearable-originated payments. must also support new virtual banking apps Wearable personal assistant capabilities as well as Internet of Things- capabilities such as the This includes based functionality. or initiate a negotiation on behalf ability to validate an offer banking apps do not reach wearable Current of the customer. that level of maturity. banking app technology will mature believe that wearable We rapidly than traditional banking solutions. If much more adopt the devices, then banks will seek out customers don’t other devices and solutions. 26 l Transformative Banking – Go digital with disruptive technologies productivity andperformance. risk (includingfraud),andresource utilization, improving can alsoimprove decisionmakingandoutcomesrelated to customer lifetimevalueprediction andoptimization.They (including next-best-offer), databasemarketing,and cross-sellingto customerchurn, andpropensity topurchase and real-time activity. Theycanimprove outcomesrelated demographicdiversity intimacy inatimeofself-service, ears ofthedigitalbank,enablingcustomerandpartner or paymentapplications. Itincludesthefingerprint solutions tablets toallowbank customerstologonmobile banking the useofbiometricidentitytechnology onsmartphonesand Definition: By: Analysis Biometric MobileBankingAuthentication At thePeak Vendors: Sample Maturity: Penetration: Market Rating: Benefit Impact: Business • • ovide toolsanddataaccesstoabroader setofbankstaff, • • Advice: User SAS

Use toolssuchasbusinesscapabilitymodels,customer Focus onthestrategicbusinesschallengesandkeyissues Pr Look beyondtransactionaldatatoincludelocation,social to supportthosedecisions. or couldbemadeavailable,andtheappropriate analytics bank customersand/orpartners),thekindsofdatathatare strategies (theofthebank,or the kindsofdecisionstobemadeinsupportbusiness with businesscounterpartstobrainstormandprioritize such asprocure-to-pay and order-to-cash inworking maps,ecosystemmodels,andprocessjourney flows evaluating technology, processes andorganization. that advancedanalyticswillbeusedtoanswerbefore bulk oftheanalysis. and tocustomerspartners,whowillundertakethe that canadvanceyourdigitalbankingstrategies. media, newsandotherstructured andunstructured data Adolescent Biometricmobilebankingauthentication describes AlistairNewton High Angoss;APT; FICO;IBM;RapidMiner;SAP; Advanced analytics serve astheeyesand Advancedanalyticsserve 5%to20%oftarget audience experience. the typeofmobiledeviceusedanddesired customer voice, facialrecognition orsimilarmethods,dependingon toincludefingerprint, technology deployedwilllikelyvary over usingbiometrictechnology. Theactualtypeofbiometric deployed bybanks,willovercome obviouscustomerreticence many existingidentificationandverification(ID&V)solutions secure androbust, alignedwiththeunsustainablenature of customers from usingsuch technologyonceitisconsidered yet accessible.Gartnerconsidersthattheutilitygainedby for mobilebankingloginincountrieswhere ApplePayisnot biometric “touch”capabilityisalsostartingtoseeadoption the U.S.marketassociatedwithApplePay. However, the approaching thepeak primarilybecauseofactivitywithin verification toa third party, such asAppleorSamsung,isthe their owncorporate trustequation:Bydevolving customer mobile bankingbusinessmodels. Banksmustunderstand customer loginswouldhaveasignificant impactonexisting such third-party entitiestoauthenticatemobilebanking sector, asthepotentialthattheymaybecomebeholden to authenticated customer, banksneedtocloselytrackthis and Samsungdonotyetdeliveracompletelyidentified Accepting thatcurrent solutionsfrom thelikesofApple many oftheapplicationsonthatcustomer’s mobiledevice. of thatauthenticationmechanismbecomesthegatekeeperfor authenticated ontoamobiledeviceorapplication,theowner such changesare highlightedearlyinthedevelopmentcycle. applications, anditisimperativethatthepotentialimpactsof or businessrationaleformanyofyourbank’s mobile may fundamentallychangetheunderlyingbusinessprocesses for thedeploymentandmaturingofsuchtechnology, asit appropriate securitysolutions.Also,recognize thepotential customer accesstohigher-risk transactionalcapabilitieswith customers’ mobiledevices.Understandhowyoucanbalance biometric authenticationbeingdeployedontoyour scenarios tooutlinetheimpactofstrong andsustainable to assesstheirsuitabilityforyourownID&Vneeds.Build the capabilitiesthatare currently deployedinthemarket office tofront officetohelpdifferentiate your offerings. Track customers. MigratecustomerID&Vcapabilitiesfrom back solutions youdeployare successfullyadoptedbyyour now starttodifferentiate your businessanddefinewhether Position and Adoption Speed Justification: Speed Adoption and Position Business Impact: Business Advice: User biometrics toaccessATMs andbranchservices. and paymentapplications.Itspecificallyexcludesuseof some recognition solutionsforaccessingmobilebanking from thelikesofApple andSamsung,butalsoincludes Theseemerging formsofID&Vcapabilitieswill Onceaconsumercanbestrongly Thisispositioned Transformative Banking – Go digital with disruptive technologies l 27 Gartner still 5% to 20% of target audience 5% to 20% of target This technology can be deployed in apps to This technology can be Kofax Image Products; Mitek Systems; Kofax Image Products; High Stessa B Cohen Digital banking solutions support open unified Adolescent Newgen Software Technologies; Top Image Systems Top Technologies; Newgen Software Benefit Rating: Market Penetration: Maturity: Sample Vendors: Open Unified Digital Banking Solutions Analysis By: Definition: Position and Adoption Speed Justification: Business Impact: multichannel integration that enables the bank to deliver any customer service or systems or functionality to customers parties, and to external on any device or channel, to third partners. The bank can develop new services and incorporate solutions enable the bank to APIs. Unified services via Web among all channels rather than the focus on the synergies or service itself. delivery of the product customers in all areas of the bank. These include consumers, of customers in all areas (SMB) customers, and investment, small or midsize business customers. They also include all private and high-net-worth in document-intensive processes lines of business, especially Bankers will be tempted to loans and mortgages. card, credit and tablets. While these to mobile move existing processes return costs and efficiencies, the will initiatives will improve initiatives will be those not be transformative. Transformative but in new ways, to digitally that use existing processes, for a new enable customers to achieve goals (for example, to cash management, house, to manage finances, to improve probably debt). This transformation will pay bills or to pay off and business involve the digitalization of several workflows rather and should focus on the customer experience processes than on a single transaction. views open unified digital banking solutions as an emerging views open unified digital banking solutions as an emerging still working is that bankers are A key reason technology. existing online to identify business use cases for replacing and mobile banking solutions, for deploying solutions that support mobile and online channels and devices, and for the deployment of digital banking services enterprisewide. traditional online and mobile banking offer Existing providers banking systems, but they solutions and integration with core that decouple the often do not support open architectures the services and transactions of services from presentation enable the bank to bring new themselves and, crucially, innovative digital together to offer and existing processes multichannel that afford emerging are services. New providers The mobile- oving the customer oviders that support workflows and 5% to 20% of target audience 5% to 20% of target High ocesses that require customers to submit paper ocesses that require Stessa B Cohen Mobile imaging and capture for customers Mobile imaging and capture Adolescent validate government-issued identification. experience rather than on the transaction. a variety of customer use cases across the bank that can a variety of customer use cases across bring these documents, images, photos and transactions and workflows. existing processes into the bank’s applications and documents at the branch or by mail and in the back office. processed Monitor technology maturity for the ability to scan and Focus application development on impr Evaluate vendor pr Identify pr

• • • User Advice: • Position and Adoption Speed Justification: Maturity: Mobile Imaging for Bank Customers Analysis By: Definition: their institution? Benefit Rating: Market Penetration: bank imperceptibly undermining the level of customer trust in undermining bank imperceptibly describe the technology that is used in banking apps for describe the technology that is used in banking them to customer smartphones and tablets that enables documents, identity documents, photographs and any capture or to complete a bank process required item other paper-based transaction. based technology and workflow capabilities for customers based technology and workflow capabilities adoption of the widespread from have begun to emerge as the in the U.S. as well deposit capture mobile remote such operational efficiencies for processes need to improve mortgages. as new account opening, consumer loans and customers often Banks that have adopted mobile imaging for rather than an focus on single apps, especially for consumers, of customers. enterprise platform to develop apps for a variety Gartner expects banks to adopt this technology to push out completed in the back office that are existing processes faced with the high cost of to customers. Because bankers are Gartner expects branch operations and back-office processing, rapidly as banks seek to increase this technology to mature costs. processing operational efficiency and decrease 28 l Transformative Banking – Go digital with disruptive technologies processes, butalsocustomerdataandthepartnerecosystem. willleveragenotonlybanksystems,transactionsand services development ofdigitalbankingproducts These andservices. benefits willbethosethatchoosesolutionsenablethe across theenterprise.Banksthatrealize transformational toallchannelsanddevices ofdigitalservices supports delivery enterprisewide andtobuildamultichannelarchitecture that separate orsiloedmobileandonlinebankingsolutions or herlocationandothercontextualinformationintoaccount. website. Thecustomer’s experienceonadeviceshouldtakehis be different from theexperienceofaccessing thebank’s online Customers willexpectandwanttheirmobileexperienceto Separate thecustomerexperiencefrom thetransaction. by figuringoutwhichtransactionwillaccomplishtheirgoals. transaction-centric workflowsthat require customerstostart Avoidand usedigitalservices. channelsolutionswithrigid, business owners’cashflow–andallowsthebanktocreate focused onachievingcustomergoals,suchasimproving small complete tasksacross devices andchannels–whichare multichannel integrationthatenablesthecustomertostartand When evaluatingproviders, prioritizethosethatsupport not meetbanks’digitalneeds. automates, digitalizesorstreamlines existingtransactionswill at itscenter. Atransaction-centricapproach thatsimply places thecustomerexperience,ratherthantransaction, across cloudservices. and external amixture ofinternal and coordinated provisioning, service useandmanagement Definition: By: Analysis Hybrid Cloud Vendors: Sample Maturity: Penetration: Market Rating: Benefit Impact: Business Advice: User device orchannel. forbothbankstaffand deliverservices andcustomersviaany integration inanarchitecture thatenablesthebanktodevelop Technologies; Q2Software; Technisys; Yodlee CR2; D3Banking;eLeader;MisysBankingandSecurities;MX Adolescent Hybridcloudcomputingrefers topolicy-based Mary Knox Mary Create strategythat adigitalbankingdelivery Transformational AssecoSEE;Backbase;Crealogix Group; Thistechnologycanbedeployedtoreplace 5%to20%oftarget audience Productivity inbankswithinfiveyears. adoption, weexpecthybridcloudtoreach thePlateauof positioned asprepeak 10%andatlessthan2%overall isprojectedbanks’ uniqueconcerns, todecline.Thus,while designedtoprotectcloud use,anotheralternative hybrid cloudare risingatthesametimebankcommunity available andasbestpracticesare formed.Plansforuseof rapidly asbank-targeted hybrid cloudoptionsbecome weexpectadoptiontotakeplacefairly to banks’concerns, sensitive can present bankswithaviablecloudalternative is alsohinderingadoption.However, becausehybridcloud compliance. Lackofhybridcloudofferings tailored tobanks ofbanksaboutprivacy,concerns securityandregulatory public cloudadoptionbybanks,andparticularlyduetothe hybrid cloudinbankslagsotherindustriesduetolower resources. options, andacoordinated andexternal useofinternal allow forcostoptimization,flexibleapplicationdeployment Meanwhile, lessambitioushybridcloudapproaches still with customers,partners,andotherrelevant third parties. agility, andsetting thestagefornewwaysbankstowork offering thebest-possibleeconomicmodelandmaximum used asneededbasedonchangingbusinessrequirements, facilities andresources thatcanbe andexternal) (internal is asinglecloudthatmadeupofmultiplesets way toaunifiedcloudcomputingmodel,inwhichthere security, privacyandregulatory compliance. Itleadsthe regardingsavings ofcloudwhileaddressing banks’concerns cloud, allowingbankstoreceive thedesired agilityandcost Position and Adoption Speed Justification: Speed Adoption and Position Market Penetration: Market Rating: Benefit Impact: Business • eate guidelinesandpoliciesfortheappropriate use • • Advice: User

Adopt APIaccesstodataandlogicforallapplicationsas Cr Seek hybridsolutionsthatbridgepublicandprivatecloud an architectural principle. infrastructure tosupportahybridITmodel. withnoncloudapplicationsand hybrid cloudservices of thedifferent hybrid cloudmodelsandcoordinate requirements. to meetsecurity, privacy, performanceandregulatory High Hybridcloudenablesselectiveuseofpublic 1%to5%oftarget audience Adoptionof Transformative Banking – Go digital with disruptive technologies l 29 While use of educe costs through faster time educe costs through essable market share by making product, by making product, essable market share 1% to 5% of target audience 1% to 5% of target ole of IT from builder to enabler. ole of IT from Open banking is transformational because Open banking is transformational Lending Club; MasterCard; Social Money; Lending Club; MasterCard; Transformational Mary Knox Public cloud computing is a style of computing Emerging mobility, creating new ecosystems, crowdsourcing new new ecosystems, crowdsourcing creating mobility, ideas and attracting modern digital/mobile development talent. internal and external ecosystems, and to attract mobile development talent. and pricing and other data available for comparison social media sites, online stores consumption through growth have seen net revenue and other digital media. We of up to 30% in a 12-month period. increases to market, lower delivery costs and easier partner time and cost to it reduce have seen integration. We market by 90%. Impr Use APIs and hackathons as a way to tap into new Use APIs and hackathons Changes the r Can expand addr Can enable CIOs to r

Standard Treasury; Visa Treasury; Standard Position and Adoption Speed Justification: • ove internal andexternal userexperiencebyenabling Benefit Rating: Market Penetration: Maturity: Sample Vendors: Public Cloud Analysis By: Definition: • Business Impact: • • • where scalable and elastic IT-enabled capabilities are provided provided capabilities are scalable and elastic IT-enabled where as a service to external customers using Internet technologies – i.e., public cloud computing uses cloud computing externaltechnologies to support customers that are to the organization. provider’s it: public cloud for applications using nonsensitive data is is often commonplace among banks, this use more growing being driven out of individual business pockets. Strategic use 15% to 20% of public cloud is only seen in approximately public cloud adoption Barriers to greater of banks today. We believe open We GoldenSource; HP; IBM; Markit; Microsoft; Microsoft; HP; IBM; Markit; GoldenSource; essable market share by providing APIs by providing essable market share Kristin R. Moyer; Mary Don Free Knox; Open banking uses Web APIs, apps and app stores APIs, apps and app stores Open banking uses Web Adolescent for data the bank already makes publicly available (for for data the bank already rates, and branch exchange rates, interest example, foreign locations). and ATM CEO and business executive priorities: revenue, cost, user CEO and business executive priorities: revenue, experience and talent management. Expand addr Communicate the business value of APIs based on top

OpenStack; VMware • User Advice: • Position and Adoption Speed Justification: Definition: Sample Vendors: Open Banking Analysis By: Maturity: to enable internal and/or external new to create ecosystems applications user interfaces (such as mobile apps), channel functions, data (like online banking), extend accessibility to new digital banking solutions. and create and products, banking is at the Peak of Inflated Expectations. Most architects Most architects banking is at the Peak of Inflated Expectations. convinced of the business value of open and many CIOs are and struggling to gain CEO/board banking and APIs, but are and CEOs in the line-of-business attention. Many boards concernedbanking industry are APIs (especially about using regulatory security, externally) due to intellectual property, risk concerns.compliance and reputation Those concerns API by proper but can be addressed valid and reasonable, are investments. The usage policies and application infrastructure to a barrier quality of underlying data and services stacks are API layer for many banks, especially those that a Web creating expect open banking systems. We their core have not renewed of Disillusionment banking to begin to fall into the Trough several However, during the next 12 months for these reasons. government bodies such as the U.K., India and regulatory independently creating and potentially the EU (PSD2) are and/or gateways. their own open banking API standards in a rapid, massive In our opinion, these factors will result APIs by the industry – with open adoption of public Web to 10 within five the Plateau of Productivity banking reaching a years. First movers will have an advantage, because creating is challenging and sustainable open banking and API program Therefore, to create. substantial time and resources requires first movers will be in a position to use APIs to innovate and disrupt, rather than just meet government or regulatory requirements. 30 l Transformative Banking – Go digital with disruptive technologies digital assets. Public cloudcan alsofree resources forthedevelopment of stress testingtomeetregulatory compliancerequirements. demands,such asfor in demandsandmeetingtemporary the abilitytorapidlyscaleupand down,supportingchanges new products whilereducing andservices thesunkcost,and Public cloudcanprovide bankswithrapidtimetomarketfor products, andconfigurationsindecreasing services timespans. the demandforproviding anincreased arrayofself-service agility andefficiencyofpubliccloudastheystruggletomeet Business Impact: Business e thatalluseofpubliccloudwithinyourbank, • • • • egard publiccloudonlyasalogicalextensionof • Advice: User in twotofiveyears. beginning toslideintothetrough, andbecomingmainstream As aresult, wepositionpubliccloudadoptioninbanksas banks thatare already investinginprivatecloud. will driveadditionaladoptionofpubliccloud,includingby This that bringtogetherpublicandprivatecloudalternatives. use ofpubliccloud.Thesewouldincludehybridcloudmodels componentized applications–whichenableamore selective architectureinvestments inservice-oriented (SOA)-compliant systems (seeOpenBankSystemsprofile) –particularlywith Further, bankshavemovedtoachievemore-open bank public cloud’s promise ofcostreduction, agility, andscaling. up demandfrom banksfor publiccloudoptionsasbanksseek bank-specific publiccloudofferings. There is,however, pent- regulator position,integrationissuesandlimitedrangeof lackofclarityregardinginclude securityandprivacyconcerns,

Requir Adopt APIaccesstodataandlogicforallapplicationsasan Seek hybridsolutionsthatbridgepublicandprivatecloud Look beyondcostsavingstobusinessgoals,suchasagility Do notr centrally toensure consistencyandintegrityofoperations. including usebyindividualbusinessunits,begoverned architectural principle. requirements. to meetsecurity, privacy, performanceand regulatory and innovation,injustifyingtheuseofcloud. support privatecloud. you donothavetheeconomiesofscaleorinvestmentsto forexpandingintonewmarketswhere as analternative private cloudinitiatives.Looktotheuseofpublic Digitalbanksare seekingtheincreased without theusualcompromises ofsingle-platformsolutions. and datastores asaunifieddatawarehouse infrastructure, Analytics systemscanaccessdifferent processing models distributed processing alongsidearepository-centric solution. to datawarehouse designthatusesdatavirtualizationand Definition: By: Analysis Logical DataWarehouse Sliding IntotheTrough Vendors: Sample Maturity: Penetration: Market Rating: Benefit Position and Adoption Speed Justification: Speed Adoption and Position Group various datasources andusecases. a dataaccesslayerthatissemantically consistentacross faster thanavendor-provided solution.TheLDWoffers that pursuea“bestfit”engineering approach willmature agreements.movement service-level As aresult, practices premises hybridsare challengingdata accessanddata Hadoop stack,suchasApacheSpark.Cloudandon- rapidly, withnew open-source projects extendingthe are progressing. Thetechnologylandscapeisstillevolving Gartner seesclearindicationsthatpracticesandtechnologies Hadoop clustersasusersattempttocombinethedatasets. multiple warehouses, andeventhoseassociatedwithseparate organizations encountertherisingcostsofmaintaining of theLDW’s capabilities.Thistrend isgrowing asmore (3% to4%oftheoverallmarket)hadimplementedmost At thestartof2015,15%to18%leadingorganizations analysis. mixed-content analysis,NoSQL,andaudio,visualimage virtualization, SQLcompatibilitywithsearch, Hadoop, DBMS thathousestheirdatawarehouse, introducing data Organizations files/tablesfrom are usingexternal thecurrent the constraintsofrow/column-based SQL-basedprocessing. existing datawarehouses beyondtherelational databaseand with cloudstyles.TheLDWrepresents awaytoextend distributed process engines,aswellhybridon-premises styles thatcombineanalyticdatastores withvarious marts andoperationaldatastores tothenewinfrastructure seeking amethodofadaptingexistingdatawarehouses, data Adolescent Thelogicaldatawarehouse (LDW)isanapproach MarkA.Beyer;RoxaneEdjlali High Amazon;IBM;Microsoft; Ohpen; Temenos 5%to20%oftarget audience Organizations are Transformative Banking – Go digital with disruptive technologies l 31 Christophe Uzureau; Alistair Newton Alistair Christophe Uzureau; Remote commerce emulation payment systems emulation Remote commerce target small or midsize businesses (SMBs) and position target Use r

User Advice: • emulationpaymentsystemsto emote commerce Remote Commerce Emulation Payment Systems Emulation Remote Commerce Analysis By: Definition: Position and Adoption Speed Justification: that the transactions can be initiated important to stress It’s bar code displayed on the POS (e.g., by a retailer-generated be designed to DigiCash or FLASHiZ solutions in Europe), on a It can also rely mobile device. scanned by the consumer’s (e.g., (BLE) device coupled with a POS Bluetooth low energy iBeacon). Apple’s low-value payment The ongoing deployment of real-time of payment systems will have a positive impact on the ability emulation payment commerce to develop remote providers added-value services (e.g., better systems and introduce In some geographies, services) to merchants. reconciliation messaging app notably Asia/Pacific, the development of social exploring are wallets is another driver for such systems. They transactions how to enable their digital wallet users to initiate some retailers at the POS, notably via QR codes. In the U.S., Customer Exchange as part of Merchant led by Walmart, as an alternative planning the launch of CurrentC (MCX), are mobile payment push for NFC-enabled industry’s to the card on a QR code- systems. The solution is expected to rely emulation payment system. commerce initiated remote focus on harmonizing the tokenization the current However, momentum for mobile- via EMVCo and the resulting process their payment systems is reducing originated proximity appeal for payment initiation. Gartner expects that some of the supporting technologies be emulation payment systems will commerce for remote especially with combined with tokenization processes, the to the use of BLE devices; for example, to support regard of vouchers with the payment process. reconciliation A combination of these factors accounts for the move from the peak to post-peak 30%. enable proximity payments (at the POS) by accessing payments (at enable proximity on a server located in a fashion same as payment credentials the transaction. As a result, when performing an e-commerce do not pass between the handset actual payment credentials and POS terminal. 5% to 20% of target audience 5% to 20% of target The LDW is effectively an evolution The LDW is effectively Cisco; Cloudera; IBM; Microsoft; Oracle; Cisco; Cloudera; IBM; Microsoft; High Chief data officers and business intelligence Chief data officers and Adolescent Pivotal; SAP; Teradata Maturity: Sample Vendors: Benefit Rating: Market Penetration: Business Impact: User Advice: (BI) and data warehouse architects should evaluate pilot architects (BI) and data warehouse “big data” solutions with and test cases for combining projects support analytics. They should that traditional data stores method for providing appropriate then determine the most on existing skills, platform preferences, combined data, based budgetaryuse case demand and constraints. for deploying, CIOs should pursue accurate cost evaluations data in Hadoop maintaining and accessing information and can be migrated to clusters, and determine if processes transform and load jobs in the primary warehouse. repetitive use cases where At the same time, they should identify data and model is possible for portraying data, no compromise for displaying alternatively determine the best approach a traditional hub- transformed data (while this could involve it could also draw on a BI platform’s and-spoke architecture, semantic capabilities or data virtualization tools). Using data stability and pervasive analytic models as a guide, that determine when analytic develop a series of standards via a made available in repositories, data will be stored language or kept in a processing semantic and/or virtual tier, on clusters. to leverage distributed processing environment and augmentation of existing data warehouse architecture architecture and augmentation of existing data warehouse not all the fact that It reflects practices, not a replacement. needs can be supported by analytical, query and reporting data warehouse. a traditional centralized repository-style inclusive data and more It implies that a much broader The management solution for analytics is about to emerge. to new ability to respond reliable a more LDW provides demands with short time-to-delivery analytical or reporting number of datasets made and with a large requirements it available via query way, tools and applications. In this a modifications and provides accelerates data warehouse with gradually rapid deployment capability for new sources to as “late binding”). Late-binding maturing use cases (referred support also makes the LDW an option for leveraging data source a as lake data a use even can LDW The discoveries. lake or one of the underlying data stores. 32 l Transformative Banking – Go digital with disruptive technologies regards thebusinessimpactashigh. Gartner ofsuchservices, Under theconditionofdelivery worthiness andimprove ofshort-termcredit delivery toSMBs. interfaces andtheuseofnewsources ofdatatoassesscredit systems willbenefitfrom animprovement indigitalbanking those transformation toreach newcustomersegments.Inturn, payment systemsisacomponentofbanks’digitalbanking As aresult, ofremote thedelivery commerce emulation so on). management, reconciliation loyaltyapplicationsand services, (inventory contribution intermsofaddedvalueservices the solutionsfitintotheirsupplychainsaswell “prosumers” andSMBs.Whatmatterstothemishowwell primarily anabilitytoworkwithnewcustomersegments– credit transfersystemscompared withcard networks.It’s potential impactonreduced interchange revenue byusing –especiallybearinginmindthe on transactionalservices Analysis By: Analysis In-Branch andATM Video Vendors: Sample Maturity: Penetration: Market Rating: Benefit Impact: Business • • • MCX; PayPal

Enable yourcustomerstodefineusageparametersforthe Reuse existingcr Plan tolaunchordeveloppartnershipssupply strengthening therole ofyour digitalbankingplatforms. banking interfaces.Thiswillreassure customerswhile use ofremote commerce emulation through yourdigital been orare beingimplemented. markets where real-time low-valuepaymentsystemshave remote commerce emulation.Thisisespeciallyvalidin emulation services. toaugmentyourremotechain services commerce services. also beneededifyoucurrently donotprovide acquiring management). Strategicalliancesandpartnershipswill your overallbankingproducts (lending,cash and services Emerging AlistairNewton High Apple;Barclays (Pingit);DigiCash;FLASHiZ; Thebusinessimpactdoesnotdependsolely edit transferinfrastructures tosupport 1%to5%oftarget audience States, broad adoptionwillbeachievedmore quickly. technology. However, inspecificcountries,liketheUnited Cultural acceptancewillslowtheglobaladoptionofthis willing andlikelytoembracetheuseofthattechnology. in abranch.Insuchaninstance,thecustomerwillbemore second-best ifthatadvicewere tobedelivered face-to-face expert onaparticularsubject,ratherthanhavingtosettlefor can ensure thatthecustomerspeakstobank’s best toacustomer.service Forexample,ifusingvideotechnology unless itcanbeshownthatvideotechnologyenhancethe in-branch videowillbeviewedasadegradationofservice, subject tosignificantculturalparameters.Inmanymarkets, remain intheUnitedStatesmarket,andadoptionisstill despite intenseclientinterest. Greatest levelsoftraction last year, thetechnologyhashadlimitedgrowth inadoption, benefits, suchas: bandwidth isrestricted andexpensive. with associatedcostimplicationsinthoseregions where use ofvideocapabilitycanbebandwidth-intensive, not overlooknetworkingcostsandchallenges–extensive geographies, culturalbarriersmayrestrict adoption,anddo any issueswiththetechnology. Recognizethatinsome solution andavailableon-sitetohelpcustomerstroubleshoot Ensure thatbranch-basedstaff are fullyintegratedintothe bank isopeninganewcustomer-facing outlet. additional capabilitythatvideomaybringtoabranchifyour atATMsability ofvideotoenhanceself-service andonthe customer toaccessbestadvicethrough thesechannels,onthe will belessinclinedtoadoptit.Focusontheabilityof are theprimemotivationfordeployingsuchtechnology, they alienating customers.Ifthecustomersuspectsthatstaff cuts – unlessyourdeploymentsfocusontheformer, yourisk experience ratherthanpurely savingstaff costsforthebank require separatestand-aloneterminals. be delivered through aspecificallyequipped ATM ormay the physicalconfinesofabranch.Thevideointeractioncan that deliverinteractivevideocapabilitiestocustomerswithin Position and Adoption Speed Justification: Speed Adoption and Position Definition: • • Impact: Business Advice: User

Allowing theopeningofnewbranch outletswithlower Allowing existingbranchoutlets tobecomefinancially cost implications sustainable In-branchandATM videocoversthetechnologies Focusonaddingvaluetothecustomer In-branchvideomaydeliveranumberof Through the Transformative Banking – Go digital with disruptive technologies l 33 For advisory and consultative services, High Benefit Rating: Business Impact: Additional due diligence should be done during the Additional due diligence as well as the contracting process, evaluation and selection of cloud computing area new due to the relatively process, technological and fast-growing dynamic and the incredibly well as challenges in building as changes being introduced, servicesand negotiating a cloud contract with appropriate Potential end users must identify who performance metrics. will inflate pays for what, how the cost of one-time activities involved are the total cost and how key business stakeholders in the governance. to cloud-enabled services that leverage disruptive regard With users should cloud technologies and new vendor offerings, that IT that a significant number of offerings be aware in development or are introducing are service providers – whether an each class of offering being piloted. As a result, utility solution leveraging cloud infrastructure infrastructure or a SaaS-based solution leveraging an application or other types of business services to – needs infrastructure evaluated for all the key risk areas. be thoroughly will be among the most Integration and interoperability to analyze and manage on an ongoing important risk areas (OLAs) that align with basis. Operating-level agreements critical but (SLAs) are the specific service-level agreements In a highly standardized. to achieve, as the solutions are hard on at the contract- best-case scenario, OLAs should be agreed is made. For existing an award negotiation level, before OLAs. must retrofit the organization relationships, users will be able to gain insights and analysis on how to harness cloud computing technologies to further their clearly In the long term, the user can more strategic use of IT. competitive that provide identify and execute IT architectures parity versus competitive advantage. industrialized cloud Users will need access to these more shorter adoption computing solutions to benefit from timelines and a faster ROI in IT services. The long-term impact of cloud-driven business and IT services significant with and solutions will be material and and savings levels within the to their size, breadth regard more This impact will provide overall IT service industry. the service choices for enterprise buyers. It will reshape landscape, because major barriers to capital- provider and applications, will such as infrastructure intensive areas, be removed. The verticalization vices – These include vices – These include services that egulatory compliance 1% to 5% of target audience 1% to 5% of target Moderate BIS firms need to make choices based on Peter Redshaw There are two components of cloud-driven are There Early mainstream are packaged as outsourcing offerings (sometimes called offerings packaged as outsourcing are the business as a service [BPaas]) where business process cloud leverages one or more or IT service provider computing technologies. consulting, business analysis, IT architecture analysis, consulting, business analysis, IT architecture servicessystem integration, deployment and testing that implement some form of cloud computing. of excellence Cloud-enabled ser Cloud implementation ser Delivering better r Allowing the centralization of domain experts into a center Allowing the centralization

User Advice: Position and Adoption Speed Justification: 2 Definition: 1 Market Penetration: Maturity: Cloud-Driven Business and IT Services Analysis By: • Benefit Rating: • business and IT services: alignment to key performance indicators (KPIs) and the use and management strategies. of business-driven sourcing of cloud that is specific to just the banking and investment services (BIS) industry is at an early stage and significantly elsewhere. offerings behind the generic, cross-industry cloud-based building and buying more Although banks are to just dedicated few that are still relatively are services, there this industry. The first component, cloud implementation services, has few barriers to adoption, as BIS firms seek externalinherent help The second component, with implementations once approved. unique to BIS, is emerging cloud-enabled services that are business and IT service and many of the in this industry, have not yet fully developed, verticalized, marketed providers An example of such a service is and priced their offerings. in the cloud. Pervasive usage will depend reconciliations obstacles, such as security and perceived on overcoming of alternative entities, such as and the emergence resilience, and community clouds that focus on cloud service brokerages the BIS industry and with gated admission. 34 l Transformative Banking – Go digital with disruptive technologies accounts andinitiatemonitorpaymentactivity. messaging platformis,therefore, theinterfacetoregister messaging platformtooriginatepaymenttransactions.The and isnowatpretrough 45%. progress buthavenotyetreached theSlopeof Enlightenment As aresult, thesocialmessagingapp walletsare makingstrong models (e.g.,howtoreduce thecostoffunding transactions). terms offinancial regulations aswellsustainable business However, somechallengesremain –notablyoutsideAPAC –in repayment, andredeeming loyaltypoints. as reviewing, checkingaccountbalances,makingcredit card their in-appstores inWeChat todeliverfunctionalitiessuch WeChat. AllTier 1banksandmostTier 2bankshavesetup Chinesebankshavebeenactivelyinvolvedwith and services. apps toimprove thecontextualizationoftheirownproducts and Japanare startingtocollaboratewithsocialmessaging those walletsare attractingnewpartners.BanksinTaiwan As theyare gettingmore mature andgrowing theiruserbase, Tier 1andmostTier 2banksinChina). departmentsandbanks(includingall enterprises, government approach, WeChat hasextendeditssocialmessagingappto example, inChina,byleveraginganopenAPIstrategyand aswellfinancingscenarios.For consumption patterns ecosystems supportingnewtypesofcommunicationand intonewdigital Social messagingappsare alsoturning further innovationsintermsoffunctionalityandusecases. P2P paymentfeature willincrease competitionandgenerate markets andthelaunchofSnapCashFacebookMessenger Japan. However, theseproviders are nowexpandingintonew notably thankstoWeChat Wallet inChinaand LinePayin social messagingappwalletswasmore pronounced inAPAC functionality during2014and2015.Thedevelopmentof messaging app-basedpaymentsystems–haveimproved in Social messagingappwallets–previously calledsocial Justification: Speed Adoption and Position Definition: By: Analysis Social MessagingAppWallet Vendors: Sample Maturity: Penetration: Market Services HP; IBM;Microsoft; Oracle; SunGard; Tata Consultancy Adolescent Asocialmessagingappwalletrelies onaninstant ChristopheUzureau Atos;BT; Capgemini;HCLTechnologies; 5%to20%oftarget audience use smartphones and 15% use tablets to access services. use smartphones and15%usetabletstoaccessservices. recent revealed Gartnersurvey that 33%ofcustomers have appswithsomedegree ofsuccessfuladoption. A via flashsales. could betoassistcommercial clientstoclearsomeinventories physical supplychain.Forexample,onepossiblenewservice financing. Socialmessagingappwalletsare alsoimpactingthe credit datatosupportshort-term collections ofalternative reach ofsmallormidsizebusinesses(SMBs)aswelltheir starting toimpactthefinancialsupplychainthankstheir are impactingdigitalbankingoperationsinChinaandare limited toretail paymentorigination.Socialmessagingapps cases, across digitalandphysicalgoods.Theirimpactisnot digital walletsare supportinganincreasing numberofuse and distributingproducts andthesupporting andservices, are becomingmore importantintermediariesformarketing consumers’ digitalconsumptionneeds.Socialmessagingapp Social messagingappwalletsare well-alignedtothecontextof banks: because oftheirlarger screen size. apps canincludemore functionalityandinformation detail focused functionalitybecauseoftheirsmallscreen size,tablet for tablets.Whilesmartphoneappsshouldhavenarrow, Business Impact: Business • channelforsocialmessaging eb APIsasadelivery • Advice: User Position and Adoption Speed Justification: Speed Adoption and Position Definition: By: Analysis Tablet Apps Vendors: Sample Maturity: Penetration: Market Rating: Benefit Tencent

Use socialmessagingappwalletstor Use W business collaborationinsideyourorganization. origination. Thiswouldalsodemandstrong cross-line-of- new channelsforinformationcollectionaswellloan retail customersandSMBsbyusingsuchsolutionsas your P2Ppaymentsolutions. apps inorder toexpand the addressable marketshare for Adolescent Tablet appsare mobileappsdesignedspecifically KristinR.Moyer;StessaBCohen Headsofpayments,digitalleadersandCIOs High Facebook;KakaoTalk; Line;Snapchat; Asin2014,thebusinessimpactishigh. 5%to20%oftarget audience each bothnew Mostbanks Transformative Banking – Go digital with disruptive technologies l 35 oid Pay payment platform in oviders are also launching digital oviders are 20% to 50% of target audience 20% to 50% of target Asseco SEE; Bottomline Technologies Asseco SEE; Bottomline Technologies High Christophe Uzureau; Alistair Newton Christophe Uzureau; A digital wallet solution is an electronic vault, A digital wallet solution is an electronic Early mainstream 1Q15, offering a suite of APIs for developers to create a suite of APIs for developers to create 1Q15, offering their own digital payment systems/solutions. Snapcash, Line Pay, wallet solutions (e.g., WeChat, has extended its Facebook Messenger). In China, WeChat Google announced its Andr Social messaging app pr

(Andera); Crealogix Group; D3 Banking; Epam Systems; Group; (Andera); Crealogix Nucleus Mitek; Fiserv; FIS; Kofax; Kony; Malauzai Software; Image Systems; Top Technisys; Exports; SAP; Tagit; Software Vipera • • Digital Wallets Analysis By: Definition: Position and Adoption Speed Justification: in in digital wallets interest 2014 has experienced a strong This has generated the wake of the launch of Apple Pay. investments into and contributed to the standardization such as tokenization. This will facilitate the of processes, delivery of digital wallets by new entrants. in how to influence the interest It has also generated more platforms to design new digital ecosystem by providing not just about digital wallet solutions. The implications are but, replacement, payments and cash and card proximity about supporting new digital commerce most importantly, models. For example: Benefit Rating: Market Penetration: Maturity: Sample Vendors: example, loan officers often go into the field with a rolling often go into the field with a example, loan officers a laptop, a scanner, paper brochures, suitcase that includes to sell and originate a loan. A cables and other equipment all this equipment when coupled tablet app can eliminate and electronic such as image capture with other technologies, errors shorten sales cycles and reduce It can also signatures. due to manual data entry. where a person’s credentials related to payment cards, account to payment cards, related credentials a person’s where and loyalty programs details and/or IDs, identification cards, and accessed from securely stored other sensitive data are can be device. The credentials an interface on an electronic server. in the device and/or on a remote stored ease elationship managers, private Tablet apps have a high business impact Tablet operational efficiencies of customer-facing processes such processes operational efficiencies of customer-facing as new account opening, loan and mortgage origination, Doing so will and other document-intensive processes. workflow more bring these documents into the processing the customer experience at the quickly and likely improve branch. and design tablet apps. bankers, loan officers, and customer serviceother and sales employees who have face-to-face interactions with compelling and a more apps will provide customers. Tablet reduce sales cycles. efficient experience, and Deploy tablet apps for branch employees to incr Cr Deploy tablet apps for r

Business Impact: • • eate personasfortabletusersandusethemtoidentify • User Advice: well as a desire to minimize complexity, most banking apps most banking apps complexity, to minimize well as a desire smartphones and tablets. This is a designed for use on are is too in most cases, there because, suboptimal approach or not a small smartphone screen much functionality for Many customers use tablets tablet screen. enough for a larger Using a smartphone- than they use smartphones. differently an oversize book. We optimized app on a tablet is like reading specifically designed expect to see banking apps become more years. For example, for tablets during the next two to three online banking functionality banking apps that have replicated for tablets, to a mobile device will most often be best-suited focused apps (like account balance or narrowly while more exchange rates) will be best-suited for smartphones. real-time started transitioning. Citi has a retail Some banks have already as well as banking app for smartphones (Citi Mobile App) detailed tablets (Citibank for iPad). The tablet app provides size – screen for a larger appropriate information that is more accounts; track, for example, the ability to view and manage read about personal finance analyze and plan finances; and a tablet app – and money management. Deutsche Bank has at senior executives in hedge GlobalPrime for iPad – targeted and daily margin funds or institutional clients that provides also expect to see many employee information. We reporting apps built specifically for tablets. the Plateau of Productivity to reach expect tablet apps We specifically to a within two years as banks seek to deliver more need, location and technology. user’s Given the higher usage of smartphones than tablets, as Given the higher usage in customer-facing interactions because they introduce an interactions because they introduce in customer-facing For information and presentation opportunity for efficiency, 36 l Transformative Banking – Go digital with disruptive technologies By usingdigitalwallet functionality, bankswillbein a much andnegotiationcapabilities onbehalfofcustomers. services, digital(payment) advisory account managementservices, suchasenhanced budgetingand ofnewservices, delivery totheirexperience.Thisalso enablesthe to aligndelivery bycapturingcustomerneeds andintentinorderand services banks. Theyenablethecontextualizationoftheirproducts ability todefinesecuritypreferences andalerts. Use digitalbankinginterfacestoprovide customerswithan strategy. Align thebank’s digitalwalletstrategywith itsdigitalbanking generation ofservices. each combinationwillpavethewayforintroducing thenext Think intermsofcombinationsfunctionalitiesandhow maps tospecificconsumergroups’ usage requirements. Create adigitalwalletfunctionalityprioritizationmatrixthat existing digitalbankingchannels. the opportunity. Somefunctionalitycouldbedelivered via first – You don’t havetoissueadigitalwalletbenefit from Business Impact: Business Advice: User • ectly asasmartwatchcould store orgiveaccessto • position digitalwalletsinthepre-trough 25%position. habits andnegativesecurityperceptions. Therefore, we strong consumerrigiditybecauseofentrenched payment For example,launchinganewdigitalwalletbrandisfacing cases, notablythoseenablingnewtypesofdigitalcommerce. for more advancedfunctionalityandsupportingbetteruse lead toawaveofnewsolutionsandfailures, pavingtheway wallet-issuance- anddigital-wallet-platformlevels.Thiswill Competition is,therefore, acceleratingatboththedigital- profile) willalso drive digitalwalletadoptionandusage: The adoptionofwearabledevices(seebankingapp

And indir Dir handle mostoriginationandauthenticationprocesses. a smartphonebaseddigitalwalletsolutionwhichwould digital wallet. secure credentials tooriginateatransaction–wearable and mostTier 2banksinChina). departmentsandbanks(includingallTiergovernment 1 social messagingapp–byproviding APIs–toenterprises, Thinkintermsofdigitalwalletfunctionalities ectly asthewearabledevicescouldconnectto Digitalwalletsare transformationalto the PlateauofProductivity. the trough, withapproximately three yearsbefore reaching As aresult, wepositionbigdatamanagement asslidinginto sources, andtechnologies. appropriate usecases,organizational models,datatypesand However, manybanks stillstruggletoidentifyandimplement and next-best-offers basedonindividualcharacteristics. of customerbehavior, anddelivering personalizedservices products developingabroader andservices, understanding priorities, andtheneedtooffer differentiating contextaware Driving bigdataadoptionare riskandregulatory compliance adoption somewhatlower, probably closerto 30% ofbanks. many oftheseare inapilotingphase,makingactualcurrent that 38%ofbankshaveinvestedinbigdata.However, the Gartner’s 2014Research Circle show BigDataSurvey governance aspectsofbigdata. governance purposes ofthisprofile, weare also includingthedata risk-sensitive mannertosupportthedigitalbank.For that enabletheextractionofvalueinacost-efficientand is thedesign,capture andmaintenanceofbigdataassets Big datamanagement,inthecontextofdigitalbanking, enhanced insight,decisionmakingandprocess automation. innovative formsofinformationprocessing thatenable high-variety informationassetsthatdemandcost-effective, their effort ondelivering adigitalwalletconsumerhub. banking platformsaswelladoptpartnershipsandfocus They candeliverdigitalwalletfunctionalitiesviatheir launch theirowndigitalwalletstoparticipateinthatmarket. transformation. However, thisdoesn’t meanbankshaveto digital walletswill,therefore, acceleratedigitalbanking customers. Theprocess of contextualizationenabledby better positiontoengageinspecificconversationwith Sample Vendors: Sample Maturity: Penetration: Market Rating: Benefit Position and Adoption Speed Justification: Speed Adoption and Position Definition: By: Analysis Big DataManagement DigiCash; FLASHiZ;MasterCard; PayPal;Visa Adolescent Bigdataishigh-volume,high-velocityand/or Mary Knox Mary Transformational Alipay;Amazon;AmericanExpress; Apple; 1%to5%oftarget audience Resultsfrom Transformative Banking – Go digital with disruptive technologies l 37 BIAN is -supplied bank applications and CIOs and enterprise architects: Mary Knox; Don Free The standards developed by the Banking Industry developed by the The standards services, include BIAN standards use and participation as services, include BIAN standards one of your criteria, giving it a medium weighting (after basic solution functionality and vendor viability). on your investment in SOA development, and whether BIAN service landscape, using BIAN as a reference BIAN service landscape, using BIAN as a reference separate pockets of model to aid in integration across solutions. Evaluate development and vendor-supplied against the BIAN model to identify gaps, all new projects and priorities. synergies When evaluating vendor W Align any in-house SOA-based development with the

• • eigh thebenefitsandcostsofactivemembershipbased User Advice: • BIAN Standards Analysis By: Definition: Position and Adoption Speed Justification: Architecture Network (BIAN) – an industry group comprising – an industry Network (BIAN) group Architecture and other service vendors, providers banks, software the service parties – define components of a bank interested (SOA). service-oriented architecture developing consensus-driven bank service definitions to the the cost of SOA. During the agility and reduce increase in building out BIAN has made significant progress past year, supporting capabilities its services landscape, and providing partners. BIAN is also increasing and through directly a including membership and geographic scope with efforts beyond North American initiative that takes BIAN promising Asia/Pacific wins. recent and more roots its European including whether and how certification Challenges remain, – can be the usability of the standards – needed to increase will become accomplished, and the extent to which BIAN rather than descriptive. Other challenges are prescriptive, the need to drive standardization, lack of industry process existing investment in legacy groups, consensus across concerns. systems, and vendors’ intellectual property – six to as emerging Gartner positions BIAN standards produce adoption when it will mainstream seven years from transformational benefits (see Benefits section). But BIAN significant benefits to early adopters in the services offer interim, by guiding bank and vendor development, and acting model for the evaluation of internal projects as a reference and vendor solutions. e and service vice nance and management fectiveness ent data governance principles, 20% to 50% of target audience 20% to 50% of target Big data management techniques and natives for elastic, scalable resources to bring natives for elastic, scalable resources Apache; EMC; IBM; MapR; Oracle; SAP; High Sales, marketing and customer ser Operational ef Strategic planning and decision making Risk Adolescent

• • • • vendors’ roadmaps for supporting big data across the full for supporting big data across vendors’ roadmaps range of big data access, management, storage, analysis, Make this a point of product and archiving. reporting evaluation. to your big data initiatives, including consideration of to your big data initiatives, including consideration cloud that bring together third-party hybrid approaches and internallyalternatives deployed solutions, and such as and data lakes. logical data warehouses management approaches and architectural guidelines and architectural management approaches and enforce that stifle big data innovation, and develop suitable for overseeing principles and guidelines that are the management of big data. practices and architectures to your big data initiatives, practices and architectures sources, including ones embracing nontraditional data such as social media and news. technologies in your business to justify and ground your to justify and ground technologies in your business categories: four major big data strategy across Understand your data management softwar Examine alter Identify your curr Extend your existing data gover Identify existing use cases for big data techniques and Identify existing use cases

Teradata Maturity: Sample Vendors: Benefit Rating: Market Penetration: Business Impact: • • • • • User Advice: technologies are essential for banks to meet regulatory and essential for banks to meet regulatory technologies are Banks that go beyond the basic competitive requirements. differentiating will be able to create business requirements their risk and services, and significantly improve products standing. 38 l Transformative Banking – Go digital with disruptive technologies software vendorstargeting the bankingindustry. ofnewbest-of-breed providersthe marketentry service and business modelsthatfosterinnovation.Theywillalsofacilitate and customer-driven andnewpartner-based bankingservices, of newproducts theoffering andservices, ofcollaborative and vendorlandscapes.Theywillallowforrapidcomposition BIAN standards will be transformational, changing the banking differentiator toacompetitive requirement. agility, eventuallymovingBIANstandards from acompetitive standards, service-level enabled byindustry willincrease bank and selectiveuseofthird-party includingcloud, services, as across functionalareas withinthebank.Reuse internal and interoperability across thebankingecosystem,aswell business transformation,becausetheyenablecollaboration that coordinate more flexibleandefficient processes. decisions; andworkflowprocess orchestration engines as ruleenginesandreal-time analytics)thatenable better enhance situationawareness; decisionmanagement tools(such technologies includemonitoring andalertingtoolsthat operations thatrunabank.Operational intelligence are integratedintothetransactionalsystemsandphysical of workinwhichoperationalintelligencetechnologies Definition: By: Analysis Intelligent BankOperations Maturity: Penetration: Market Rating: Benefit Impact: Business • ess yourpreferred SOAtoolproviders andsystem •

If usingorplanningtouseBIANstandar Pr certification forvendorsolutionsanddevelopers. BIAN orBIAN-approved organizations toprovide BIAN opportunities. for guidingfuture development,andidentifyinggaps your present applicationslandscapetotheBIAN integrators forBIANsupport.Thisshouldincludemapping design inareas ofimportancetoyourbank. opportunitiesandtheabilitytoinfluenceservices learning for yourbank.BIANparticipationcanprovide important initiatives andtheselectionofvendorsolutionsisapriority landscapetoguideinternal the useofBIANservice Emerging Intelligentbankoperations(IBOs)are astyle Mary Knox Mary Transformational Service-level standards Service-level are criticalfordigital Lessthan1%oftarget audience ds, lobbyfor real-time intelligence,IBOsare criticalforactivitiessuchas: embedding capabilitiesintooperationalsystemstoenable more responsive totheneedsofdiversestakeholders.By banking isdrivingtheadoptionofIBOsasbanksbecome • oved devicemanagement • • • ocess optimizationandprioritization • Justification: Speed Adoption and Position • • • ork withsubjectmatterexpertsandmanagersto • Advice: User • • • majority ofbanksinlessthanfiveyears. practices initsuse,andisexpectedtobeadoptedbya As aresult, IBOisnearingthetrough as banksevolvebest application silos. IBOs are challenged,however, bylegacysystemsand included inapplicationsuitesandmiddleware solutions. capabilities are improving, andIBOsare increasingly being vast increases inreal-time dataavailability. Vendors’ IBO IBOs are enabledbythedecreasing costoftechnologyand

Risk identificationandmitigation Customer ser Impr Location-based ser Pr If theoperationr If theoperationr If anoperationr W Information-based, value-addedser Market andbr Fraud detection,includingther customer activitiesandcontext process management(BPM)flow management technology. processes, thenitshouldbeimplemented usingbusiness technology shouldbeused. decision managementorrelated prescriptive analytics be applied. then someformofeventmanagementtechnologyshould support: understand thekindsofdecisionsthatoperationsshould operational analyticsintocustomerprocess flows vicing andcross-sell based onreal-time oker surveillance equires enhancedsituationawareness, equires more-sophisticated andflexible equires fasterandbetterdecisions, vices eal-time pattern detection eal-time pattern vices byembedding Digital Transformative Banking – Go digital with disruptive technologies l 39 Financial services 5% to 20% of target audience 5% to 20% of target IBM; Ignite Sales; Informatica; Oracle; Pega; IBM; Ignite Sales; Informatica; Oracle; Pega; High CIOs and FSIs seeking to implement a private Peter Redshaw; Mary Knox Private cloud is a form of cloud computing that is Private cloud is a form of cloud computing Adolescent services versus using public cloud services or modernizing established architectures. implementation. Cr Lay the foundation for success with your private cloud

As a result, we rate the business value of IBO as high for we rate the As a result, digital banks. Rage Frameworks; Splunk; Systar; TIBCO Software • eate abusinesscasefordevelopingfullprivatecloud • Position and Adoption Speed Justification: User Advice: Benefit Rating: Market Penetration: Maturity: Sample Vendors: Private Cloud Computing Analysis By: Definition: used by only one organization or that ensures an organization an organization or that ensures used by only one organization others. It contrasts with public is completely isolated from access to the service customer) is open to any cloud (where cloud and with hybrid cloud variations such as community such or organization, for or by a trusted group (as provided it provides as SWIFT). Like all forms of cloud computing, delivered capabilities that are scalable and elastic IT-enabled as a service to customers using Internet technologies. cloud should: institutions (FSIs) building a private cloud service are trying serviceinstitutions (FSIs) building a private cloud are similar benefits to public cloud but within their to acquire Private cloud helps avoid and, often, on-premises. control many of the obstacles that FSIs encounter with public clouds, the data is compliance (e.g., where regulatory such as security, held) and the lack of verticalized solutions. Private cloud computing is particularly suited to FSIs, which complex and bigger portfolios of legacy IT tend to have more systems than firms in most other industries. This means that a little ahead of other FSIs, though generally cautious, are industries when it comes to adopting private cloud. we’ve assessed the market penetration as 20% Therefore, banks). (smaller banks) to 50% (larger e banking), packaged dinate the activities of people, oducts from one or more one or more oducts from e infrastructure suites, such as intelligent e infrastructure engths and limitations of three sources of sources engths and limitations of three eness supporting, for example, real-time eness supporting, for example, real-time IBO responds to the need of digital banks IBO responds e real-time bank operations intelligence can bank operations e real-time e real-time operations intelligence can e real-time as whether to authorize a credit transaction based on as whether to authorize a credit data and complex rules. multiple-sourced or physical devices flows, application software process utilizing complex and/or rapidly changing rules. complex offer generation and fraud detection. complex offer process templates or cloud-based SaaS offerings with templates or cloud-based SaaS offerings process integrated operational intelligence features. BPM suites and financial messaging platforms. vendors. bank operations intelligence technology: improve outcomes by reducing the lag between events outcomes by reducing improve For example, rapid identification of the and responses. reach-outs impact of website outages can trigger proactive to critical customers and prioritization of remediation of an inappropriate immediate detection Similarly, efforts. blockage of that email, reducing trader email can prompt compliance risk. be used to detect leading indicators to anticipate situations be used to detect leading so that behavior can be proactive. they materialize before on a bank website click-through For example, a customer’s or a offers, product indication of potential can provide behavior of a significant member of change in the financial and market credit an industry can preclude segment that risks. Pr Flow management to coor Situation awar Packaged applications (such as cor Integrated softwar An assemblage of point pr Evaluate the str Assess wher Identify wher

IBOs also increase the level of collaboration among business IBOs also increase communication and information sharing. people by improving • such advice andpredictive ovision ofprescriptive • • • Business Impact: • • • • • for increased visibility in how the company is running and for increased The vast what is happening in its external environment. an business data represents amount of underutilized, real-time in: opportunity for significant improvement 40 l Transformative Banking – Go digital with disruptive technologies have: Private cloudwillmostlyaffect Tier 1andTier 2FSIsthat focus onefficientimplementationandsourcing. and consumingITbasedonvariablecosts.Meanwhile,can requirementsbusiness tofocusonrapidlychangingservice payperuseandchargebackshift toservices, canenablethe the businessandIT, transforminghowITisconsumed.The Private cloudcomputingalsochangestherelationship between on demand–aswelldynamicprovisioning. orderingagility –self-service offrequently requested services delivery. ItisattractiveprimarilytoFSIsbecauseitenables cost ofoperationsand(mostimportantly)enablefasterservice • • • • eady finishedvirtualization. • Impact: Business • • • • •

Many legacysystems. Business concer IT departmentsempower The scaletosavecosts. Alr Implement changeandconfigurationmanagement Pilot aprivatecloudimplementationtogainsupportfor Start slowlywith:development/testlabpr Recognize thatther Consider thelong-termr and knowledge. adequately maintainthem. stacks tobedelivered through provisioning self-service and toensureservices thatyoucanstandardize onthesoftware processes andtoolsaspartofimplementingprivatecloud costing andchargebacks. shared andtobuildtransparency services inITservices requests anddynamicprovisioning forWeb environments). mission-critical Web (forexample,self-service services term, lowSLAcomputingrequests; andsimple,non- suited tothecreation ofverticalstacks. with different teamsfocusingondifferent strataare not organizational, as traditional developmentorganizations (PaaS).Thesechallengesareplatform asaservice from privateinfrastructure (IaaS)toprivate asaservice atsomepointinthefuture.services) hybrid sourcing (usingboth yourprivateandpubliccloud Buildwiththepotentialtotakeadvantageof services. Privatecloudcomputingcanreduce the ns aboutdatasecurity. e are significantchallengesinmoving oadmap foryourprivatecloud ed withtherelevant capability ovisioning; short reaching post-trough 5%. Apple Payhascontributed tomovethisprofile forward, process, renewed competitionfrom SamsungandGoogle), ID experience)andindirectly (investmentsintokenization Both directly (ApplePaymarketing cloutandadoption,Touch security ofusingQRcodesforpayment origination. forthetransaction,strengtheninginformation necessary the enable thecreation anduseofQRcodesthatcontainthetoken more openapproach totokenization.Tokenization couldalso (and drivenbytheApplePayannouncement)hascreated a standardization ofthetokenizationprocess initiatedbyEMVCo processes, notablytoinvestmentsintotokenization.The Nevertheless, themainbenefitsare related topayment platforms). providers andincludingbybanksfortheirmobilebanking ID whichisbeingreused outsideApplePaybyotherpayment and newauthenticationsystems(biometrics–notablyTouch Pay) isgeneratinginvestmentsintobetterconsumerinterfaces as Samsung(acquisitionofLoopPayandlaunch acquisition ofSoftcard andthelaunchofAndroid Pay)aswell The increased competitionbetweenApple,Google(with originated proximity paymentsystemssomemomentum. The launchofApplePayintheU.S.2H14hasgivenmobile- Digicash). bar codeisdisplayedatthePOSandread bythePOS(e.g., application), butnotmobilepaymentsystemswhere the (POS) toinitiatethepayment(suchaswithStarbucks’mobile to communicatewithabarcodereader atthepointofsale use thebarcodesonphonescreen toenablethedevice the useofquickresponse code(QRcode)whenthesystems includes theuseofNearFieldCommunication(NFC)and from themobiledevice. mobile devicewherein thesecure credentials are transmitted systems, theoriginationoftransactiondependson Definition: By: Analysis Mobile-Originated Proximity PaymentSystems Vendors: Sample Maturity: Penetration: Market Rating: Benefit Position and Adoption Speed Justification: Speed Adoption and Position Pivotal; Progress Software; RedHat;VMware Earlymainstream With mobile-originatedproximity payment ChristopheUzureau; AlistairNewton High Apprenda; Atos;Citrix;HP;IBM;Microsoft; 20%to50%oftarget audience Thedefinition Transformative Banking – Go digital with disruptive technologies l 41 The deployment vice initiative has ogress in 2014 and ogress chestrating a transformation Christophe Uzureau; Alistair Newton Alistair Christophe Uzureau; Near-real-time low-value payment systems refer refer low-value payment systems Near-real-time benefit from the new payment systems while banks bear benefit from the cost of setting up the new infrastructure. drive for such to regulators’ banks will have to respond expectations of systems as well as customers’ growing generated a new wave of new payment systems options generated a new wave of new payment systems Launched by now interoperable: for consumers which are Pingit has integrated with Paym which enables Barclays, which enables mobile originated P2P payments, and Zapp Paym and mobile originated payments at the POS. Both VocaLink. operated by interbank processor Zapp are processes 2014, currently which went live in March than 1m transactions a month and also provides more opportunities such as enhanced invoice reconciliation services as it is built on the ISO 20022 standard. payment multiple geographies in deploying real-time payment systems is real-time deploying systems. However, not straightforward: for the new payment system with so many roadmap will level of IT maturity financial institutions at different clearly slow down progress. line of businesses (LOBs) transactions and think across payment system to – e.g., how to use a near-real-time cash management services. promote Banks ar Real-time payment systems made pr Singapor Ther In the U.S., defining and or New use cases demand to think beyond speed of In the U.K., the Faster Payments Ser

• e alsoworriedthatFintechwilldisproportionately • • service, (FAST) Transfers FastAndSecure e’s • across byregulators interest e isnowastrong • • Near-Real-Time Low-Value Payment Systems Low-Value Near-Real-Time Analysis By: Definition: Position and Adoption Speed Justification: • to payment systems that enable transfers of funds (at their to payment systems that customer banking account one slowest a few hours) from does not account. This profile to another customer banking settlement gross include interbank settlements using real-time systems. of near-real-time low-value payment systems continues its of near-real-time than 2014 (Singapore at a slower pace however, progress, for the slight and Denmark systems went live). This accounts in maturity of this profile: increase oviders edit cards to edit cards ouch ID will have on ovide customers with 1% to 5% of target audience 1% to 5% of target The current harmonization process of harmonization process The current Apple; FeliCa Networks (Sony and NTT Moderate Adolescent support new use cases, e.g., by using contextual tokens to support new use cases, e.g., by using contextual deliver digital pocket money to younger customers. to limit overreliance on Apple Pay and to demonstrate to to limit overreliance point for all the main control customers that you remain their payment needs. your broader customer authentication strategies. customer authentication your broader and alerts. preferences an ability to define security Develop payment schemes with other nonbank pr Develop payment schemes with other nonbank cr Deploy tokenization beyond Apple Pay and Recognize the impact that adopting T Recognize the impact to pr Use digital banking interfaces

Docomo); Google; Samsung; Starbucks Market Penetration: Maturity: Sample Vendors: Benefit Rating: Business Impact: • • • • User Advice: tokenization (as well as Host Card Emulation [HCE]) and the Emulation [HCE]) tokenization (as well as Host Card have the payment industry drive for standardization related Apple the benefit rating to high. However, potential to increase difficult conditions outside the U.S. Pay face much more impacting the thereby level is lower, interchange market where some of their payment issuers to share initial drivers for card with Apple. margins some banks, such In terms of digital banking transformation, ID for mobile banking using Touch as ING Belgium, are authentication purposes. However they need to make sure customer digital as a preferred that the bank is still regarded ID to is also a risk as Apple uses Touch There ID provider. position its Passbook interface as a way to manage multiple accounts. card using Digital banking transformation would benefit from tokenization beyond NFC-enabled mobile payment systems. underbanked customers. E.g., virtual accounts to target an opportunity to position the digital This would provide banking interface as the way for customers to define security (e.g., limiting the value spent at a given merchant) preferences their personal finances (e.g., as well as to better control budgets/savings tokens to different attributing different objectives). 42 l Transformative Banking – Go digital with disruptive technologies SMB bankingcustomers. to ofdigitalbankingservices positively impactingthedelivery (notably reconciliation thus andcashmanagementservices), cards. Thiswouldalsopromote thebank’s accountservices value paymentsystemswouldreduce costofacceptanceversus combining amobilePOSintegratedtonear-real-time low- are notprepared toobtainorrent apointofsale(POS)system, a year)andsmallormidsizebusinesses(SMBs).Forthosewho employee, andgeneratingupto$80,000inbusinessturnover important to“prosumers” (thatis,businessesofuptoone Near-real-time low-valuepaymentsystemsare evenmore VocaLink Zappsolution. U.K. retail chains–Sainsbury’s andAsda–havesignedfor based onnear-real-time paymentsystems.Fore.g.,twolarge and willdrivethemarketingofmobilepaymentsystem Large retailers are keentoreduce thecostofcard acceptance banking channelsformoneymanagement. banking solutionsandstrengthening therole ofdigital improving thealignmentbetweendigitalwalletsand clients, suchasdevelopingP2Ppaymentsolutionsandare create anopportunityforbankstooffer totheir newservices systems andcommonservices. payment systems,andhowtheyintegratewithotherbanking will demandsomeimportantchangesforbankcommercial andthis be fullyintegratedwithcashmanagementservices, On thecommercial side, real-time paymentsystemsneedto functionalities. solutions andusethenewsystemstodevelopdigitalwallet banks shouldmarketperson-to-person(P2P)payment Sample Vendors: Sample Maturity: Penetration: Market Rating: Benefit Impact: Business Advice: User VocaLink especially intheU.S.,willbeamore challengingaffair. faster payments.Howeverlaunchingtheminnewmarkets, Earlymainstream To demonstratevaluetotheirretail customers, High ACI; CGI (Logica); Fiserv; FIS;Fundtech; ACI;CGI(Logica);Fiserv; Near-real-time low-valuepaymentsystems 5%to20%oftarget audience a mobileoperator. Payments intheU.K.)orfrom a wireless networkoperatedby from acard association),aninterbanknetwork(e.g.,Faster process couldbeperformed viaaproprietary network(e.g., the payeraccounttopayeeaccount.Theauthorization solutions rely onmobiledevicestoinitiatetransfersfrom account fortheprogress of theprofile: been positivedevelopmentsinenablingsuchsolutionsthat P2P paymentsolutions.In2014and2015,there have types oftechnologiesthatcansupportmobile-originated As suggestedbythedefinition,there are manydifferent collect thefunds. mobile phonenumberandrequest thepayeetoregister to contacts) orinitiateatransfertopayee’s emailaddress or or athird-party contactdatabase(e.g.,Facebookfriends’ can makeuseofthepreregistered accountdetailsofthepayee Africa). Pleasealsonotethatthepaymentoriginationprocess nonmature paymentmarkets(e.g.,ThailandandSouth couldhavematuredimension, sinceonegivencountry and payment markets,whichisnotsimplyaboutthecountry It’s importanttostress thatthisprofile focusesonmature Justification: Speed Adoption and Position Definition: By: Analysis Mature PaymentMarkets) Mobile-Originated P2PPaymentSolutions(for Climbing theSlope • •

P2P paymentsolutionsdrivenby socialmessaging Development ofr use casesforthose digitalwalletsincrease theincentives Messenger) –thegrowing numberoffunctionalityand app wallets(WeChat, LinePay, Snapcash,Facebook solutions. interoperability aswellaccesstoliquidityfornew to existingpaymentinfrastructure, andtherefore, Directive (PSD)2.0inEurope –enablingbetteraccess –suchasthePaymentServices favorable tomarketentry (operated byVocaLink). environments Regulatory (VocaLink) andthe PaymMobilePaymentService Payments hasledtothelaunchofBarclays Pingit,Zapp to become24/7in2015.IntheU.K.,adoptionofFaster Singapore in2014,andJapan’s ZenginSystemis expected P2P solutions.Forexample,FAST waslaunchedin interest andcompetitionindevelopingmobile-originated such technologyfoundation,supportingthegrowing Mobile-originatedpeer-to-peer (P2P)payment ChristopheUzureau; AlistairNewton etail real-time paymentsystemsisone Transformative Banking – Go digital with disruptive technologies l 43 The adoption 5% to 20% of target audience 5% to 20% of target Fiserv; FIS; PayPal; VocaLink High Banks must still approach this sector with a Banks must still approach Alistair Newton Smartphone mobile banking covers light Adolescent User Advice: Position and Adoption Speed Justification: Benefit Rating: Market Penetration: Maturity: Sample Vendors: Banking Smartphone Analysis By: Definition: applications downloaded to the consumer’s mobile devices applications downloaded to the consumer’s full-service Smartphone apps may offer an app store. from payment banking or focus on point solutions, such as balance tracking. initiation, bill payment, or transaction and now excludes This definition of smartphone mobile banking developed to run on tablet PCs, downloadable apps that are are tablets. These such as the Apple iPad and Android-based in a separate technology profile. covered larger commercial clients looking for another payment facility. for another payment facility. clients looking commercial larger high only if banks think beyond The business impact is consumers’ P2P transactions. degree of caution and ensure that they maintain a laserlike of caution and ensure degree in most However, focus on customer experience and security. to deliver a mobile banking application countries, a failure of their bank. will be seen by most customers as a failure of smartphones by consumers across the globe continues the globe continues of smartphones by consumers across with basic to accelerate to the extent that now consumers part of the small an increasingly phones are old-style feature market, at least in terms of most developed financial services markets. The adoption of mobile banking using smartphones has accelerated, and while consumers still have a range of to a significant extent the concerns over security and privacy, by mobile banking outweighs these risks in utility provided remains the eyes of many consumers. Penetration in Europe behind the U.S., but still accelerates, and in Asia/Pacific, adoption is booming. Gartner anticipates that smartphone banking technology will within two years, although the Plateau of Productivity reach the concernsmobile banking contribution of over the real applications to bottom-line cost savings or profitability of digital wallets and the further The role still remain. fragmentation of the mobile banking market into stand-alone apps and tablet-based solutions will further influence future use and adoption of mobile banking. P2P payments do not constitute a distinct of your consumer and commercial banking operations. of your consumer and commercial develop multiple use cases to accompany the Moreover, of those solutions. out roll apps in order to expand the addressable market share for market share to expand the addressable apps in order your P2P payment solutions. from third parties – to position your digital banking third from services as the right platform for money management, notably with younger customers. Snapchat relies on Square’s technology and money technology on Square’s Snapchat relies P2P payment transmitter license to support its Snapcash system. Flexible processes (notably, how to make request from from how to make request (notably, Flexible processes marketing by mobile P2P multiple payers) and innovative assisting (PayPal) – for example, solutions such as Venmo – have events for pay-per-view the bill customers to share by younger customer groups. driven adoption and interest and user confidence in using P2P payment solutions. and user confidence in Position the development of mobile P2P solutions as part Position the development of mobile P2P solutions Use W Rely on multiple mobile P2P payment venues – including Rely on multiple mobile P2P payment venues A

As a result, this profile has made progress to post-trough 25%, to post-trough has made progress this profile As a result, reach the plateau in just over two to and we expect this profile years. • Business Impact: • eb APIsasadelivery channelforsocialmessaging User Advice: • • newsolutions,e.g., vailability ofplatformstodesign market, and the business case depends on developing multiple important here. Pingit are Barclays use cases. The lessons from Pingit started as a consumer mobile P2P payment solution, with Barclays a business case perspective, it provided but from (businesses with a maximum a new tool to serve “prosumers” of two employees and a limited turnover) and the small to midsize business (SMB) market, and to start positioning other and services to these customer segments. banking products part of the This is why mobile P2P payment solutions are of the reach digital banking transformation – they increase digital banking operations while aligning their the bank’s solutions that will bring more operations to third-party and services. context to customers’ use of banking products For banks, the business case and impact of mobile P2P- not limited to P2P. originated payment systems is, therefore, used, not only to What matters is how such solutions are and SMBs, as well as consumers but also prosumers target 44 l Transformative Banking – Go digital with disruptive technologies in nonmature payments markets,notablyinIndiaand Africa: the maturityand relevance ofmobilewireless payment systems some importantannouncements have contributedtoimprove products. starts toinfluencetheirconsumptionoffinancialservice as customers’useofsmartphonesthroughout theirdailylives also needtostartaddressing thedigitalneedsofcustomers to accommodatethesenewcustomerdemands.Bankswill bank mayneedtoadoptexistingprocesses andprocedures increasing useofcontextualandlocation-specificdata.The willinteractwiththebank,including using thatservice position ofthesmartphoneproposition andhowcustomers or products. Bankswillneedtounderstandtherole and in isolationfrom theotherbankchannels,processes, services cards oranyothertypeofaccountholdingvalue. be viamobilephonebills,prepaid accounts,bank accounts, operators (ormobilevirtualnetworkoperators).Fundingcan authorizations through wireless networksoperatedbymobile initiation oftransactionsviamobilehandsetsandtheir Position and Adoption Speed Justification: Speed Adoption and Position Definition: By: Analysis Vendors: Sample Maturity: Penetration: Market Rating: Benefit Impact: Business digital footprintofamobiledevice. authenticating customerswhentheyare transactingwithinthe headache, aswillthedemandsofaccuratelyidentifyingand and securingnetworktransactionswillbecomeanincreasing that willcomefrom digital andmobilewallets.Managingfraud in functionality, andpayment, suchasbasicbalanceinquiry the role oftablet-based bankingandtheincreasing crossover customers. Increasingly, bankswillneedtotakeapositionon devices, didnotmeetthenewdigitaldemandsofmany simply replicated onlinebankingfunctionalityonmobile mobilebankingapplications,which Many earlyfull-service their feature phones,laptopsordesktop-basedapplications. fashion thanthewaytheyuseddownloadableapplicationsfor differentConsumers usesmartphoneandtabletappsinavery Vipera; Visa (Fundamo);Yodlee Environments; MalauzaiSoftware; Misys;Monitise;Q2; Crealogix Group; FIS;Intelligent D3Banking;Finantix;Fiserv; Earlymainstream Mobilewireless paymentsystemsenablethe ChristopheUzureau; AlistairNewton High AssecoGroup; Backbase;Comarch; Smartphonebankingcannotberolled out 20%to50%oftarget audience During 2014-15, During2014-15, • • epare andsolutions(liquidity todeliverservices • epare topartnerwithlocalmerchants andsolution • e potentialbankcustomerscannotaccess • Advice: User s Safaricom(operates M-Pesa)andMTNGroup • identification andKnow Your Customer(KYC). functionalities aswelldealwithchallengesintermsof sufficient scaletogeneratefurtherinvestmentsintonew in order tobuildtherightcollaborativemodelsandgenerate however, there are stilltwotofiveyears reach theplateau This iswhyweregard thebenefit ofthisprofile ashigh;

In India,theNationalPaymentsCorporationofIndia New “paymentbank”licenseshavebeenissuedbythe Pr Pr Wher Kenya’ traction to NPCI Immediate Payment Service (IMPS). traction toNPCIImmediatePaymentService to localconsumerandbusinessneedsprovide more will contributetomakepaymentvaluechainsmore fit payment addresses (alignedtoauthorizationrules).This notably viatheuseofaccountproxies suchasvirtual UPI istoinfuseflexibilityinpaymentsolutiondesign, Interface (UPI).UsingasetofAPIs,theobjective (NPCI) ispushingforthelaunchofaUnifiedPayment withRBLBank. State BankofIndiaandOxigenServices Bank tosetupapaymentsbank,RelianceIndustrieswith example, BhartiAirtelhaspartnered withKotakMahindra collaboration forpaymentinitiationandcollection.For payment systemsviaincreased competitionand and thiswillbenefitthedevelopmentofmobilewireless BankofIndiatodrivepaymentinnovations, Reserve support third-party mobilewireless paymentsystems to management, authentication andfraudmanagement) to markets. perceptions ofbanksare oftennegativeinemerging providers toacquire customersbecauseconsumer dedicated infrastructure. market withastronger businesscasethandevelopinga the unbankedandunderbankedacceleratego-to- enable bankstocapture newsources ofinformationabout systems togivethemaccess.Suchpayment payment infrastructures, usemobilewireless payment parties’ solutions. and willcontributetotherespective adoptionofboth cross-border mobilewireless paymentscheme inAfrica Africa in2Q15.Thisannouncementcreates adefacto their respective mobilewireless paymentsystemsacross have announcedapartnershiptoprogressively integrate Transformative Banking – Go digital with disruptive technologies l 45 5% to 20% of target audience 5% to 20% of target Celcom; Fundamo; Globe Telecom; Celcom; Fundamo; Globe Telecom; High Early mainstream Mahindra Comviva; MTN Group; National Payments Mahindra Comviva; MTN Group; Corporation of India (NPCI); Safaricom; Smart Communications In nonmature banking markets, most of digital banking banking markets, In nonmature initiated first by adoption of digital transformation will be payment systems. Benefit Rating: Market Penetration: Maturity: Sample Vendors: Appendixes This is a new Hype Cycle. The time required for the technology to reach the Plateau of Productivity. the for the technology to reach The time required Because the technology does not live up to its overinflated expectations, it rapidly becomes Because the technology does not live up to its overinflated expectations, wanes, except for a few cautionary tales. unfashionable. Media interest diverse range of work by an increasingly Focused experimentation and solid hard and risks applicability, lead to a true understanding of the technology’s organizations methodologies and tools ease the development process. off-the-shelf benefits. Commercial Tools and demonstrated and accepted. benefits of the technology are The real-world generations. stable as they enter their second and third increasingly methodologies are level of risk; the rapid feel comfortable with the reduced numbers of organizations Growing audience target 20% of the technology’s phase of adoption begins. Approximately growth has adopted or is adopting the technology as it enters this phase. A breakthrough, public demonstration, product launch or other event generates significant public demonstration, product A breakthrough, and industry interest. press a flurry of well- projections, and unrealistic During this phase of overenthusiasm as failures, in some successes, but more publicized activity by technology leaders results conference are the technology is pushed to its limits. The only enterprises making money and magazine publishers. organizers Definition ging markets or with a large ging markets or with a large Mobile payment systems are an important an important Mobile payment systems are population of migrant workers in their domestic markets population of migrant workers in their domestic payment will find it valuable to use mobile wireless systems to support remittances. the delivery of your banking products and services. the delivery products of your banking authentication systems to biometric as well as related but also to support not only support identification/KYC payment servicesas for government such services. acquire valuable alternative information to support acquire credit Banks operating in emer Whenever available, integrate with the local ID schemes Whenever available, integrate Years to Mainstream Adoption Gartner (July 2015) Source: Trough of Disillusionment Slope of Enlightenment Plateau of Productivity Innovation Trigger Peak of Inflated Expectations Phase

Table 1. Hype Cycle Phases Table • Business Impact: • Hype Cycle Phases, Benefit Ratings and Maturity Levels entry point to bank the unbanked, to accelerate financial the rural population) and inclusion (notably by reaching a digital to build and therefore, foster entrepreneurship, on mobile financial – mostly relying banking proposition to The services – in those markets. For example, according Economist, M-Shwari, the banking service – savings and customers loans – associated with M-Pesa – now has “9m shillings ($1.6 and attracted deposits of 135 billion Kenyan billion) in its first two years.” 46 l Transformative Banking – Go digital with disruptive technologies Table 3.MaturityLevels Table 2.BenefitRatings Source: Gartner(July2015) Obsolete Legacy mainstream Mature mainstream Early Adolescent Emerging Embryonic Maturity Level Source: Gartner(July2015) Low Moderate High Transformational Benefit Rating ely used • • • • • endors, technologyandadoptionrapidly evolving oven technology • • • cialization byvendors • • • • Status

Rar Cost ofmigrationconstrainsr Not appr Not muchevolutioninvendorsortechnology Robust technology V Pr Uptake beyondearlyadopters Maturing technologycapabilitiesandpr Pilots anddeploymentsbyindustr Commer In labs understanding Definition translate intoincreased revenue orcostsavings Slightly improves processes (forexample,improved userexperience)that willbedifficultto revenue orcostsavingsforanenterprise Provides incremental improvements toestablishedprocesses thatwillresult inincreased significantly increased revenue orcostsavingsforanenterprise Enables newwaysofperforminghorizontalorverticalprocesses thatwillresult in dynamics industry Enables newwaysofdoingbusinessacross industriesthatwillresult inmajorshifts opriate fornewdevelopments eplacement y leaders ocess esale marketonly • • e outofbox • d generation • • • • • • • • • None Products/Vendors

Used/r Maintenance r Several dominantvendors Methodologies Mor Thir Less customization Second generation Much customization High price First generation evenue focus Transformative Banking – Go digital with disruptive technologies l 47

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BPM & ECM product suite has automated our business processes and helped us to achieve business excellence; resulting in increased BPM & ECM product suite has automated our business processes and helped us to achieve business to further strengthening our relationship in future.” look forward productivity and faster services to our customers. We Julius Kamau, & Operations, Technology Director - National Industrial Credit Bank and Newgen has been the perfect “As part of our customer-centric business approach, we continually focus on our Digital strategies Its robust BPM and ECM platform and agile implementation helped us smoothly transition Transformation. partner for us in this Digital our loan origination and credit card processes to an automated environment. “We engaged Newgen to implement their FATCA Solution to assist us with our FATCA reporting mandate. The GBTI team was and continues to reporting mandate. Solution to assist us with our FATCA to implement their FATCA engaged Newgen “We as it provides a comprehensive and user-friendly method for us to remediate and report on our customersbe pleased with the solution offering Noteworthy is that even prior to the implementation GBTI was able to work with Newgen to Compliance. as necessitated by the FATCA customized aspects of tools which were unique to our requirements.” John Tracey Mr. Chief Executive Officer, & Industry Limited Trade Guyana Bank for to our customers. Newgen has proved strategies act as the backbone to ensure that we continuously deliver excellent service “Our IT product portfolio. Newgen’ to be a true partner in realizing our goals by strengthening us through its globally acknowledged giving best of the class services to our customers.” , Taha Tariq Dr. Officer, Transformation Chief Information & Bank Dhofar For information on Newgen products, please contact: For information on Newgen products, please About Newgen Enterprise global provider of Business Process Management (BPM), Newgen Software is a leading Communication Management Case Management (CM) and Customer Content Management (ECM), of 1300+ installations in over 61 countries with large, mission-critical(CCM), with a global footprint Healthcare Organizations, Banks, Insurance firms, BPO’s, leading world’s solutions deployed at the Companies & Shared Service Centers. Telecom Government, Security Quality Systems are certified against ISO 9001:2008 and Information Newgen’s assessed at CMMi Level 3. Standard, ISO 27001:2005. Newgen has been Canada Newgen Technologies Software Canada Ltd. 2425 Matheson Blvd, Suite 765 Newgen Software Inc. Mississauga, ON, L4W 5K4 Canada Fax: +1-905-361-6401 E-mail: [email protected] Americas Area DC Metro Washington 1364 Beverly Road, Suite 300 22101 McLean, VA United States +1-703-749-2855 Tel: +1- 905-361-2824 Tel: Tel: +1-703-439-0703 Tel: Email: [email protected] For Sales Query: +1-202-800-7783 48 l Transformative Banking – Go digital with disruptive technologies NEWGEN AT AGLANCE OUR CSRINITIATIVES    Girls School NDDPS atGovt. SOS Village Sadbhavna OVERVIEW      20+ Verticals 61+ Countries 270+ Partners 1800+ Employees Implementations 1300+ Customer   ACHIEVEMENTS 40+ Patents CMF &CCM for ECM,IBPMS, MQs, Gartner’s featured in Only vendor INDUSTRIES CATERED             Airlines Manufacturing Pharmaceuticals Education Legal Telecom Shared Services Government Healthcare Insurance Financial Services Banking OUR LOCATIONS India Singapore UAE UK Canada USA OUR INVESTORS    SAP Ventures Ascent Capital IDG Ventures