Financial Services Company Transforms Into a Bank Using Channel Renewal Framework

Financial Services Industry Microsoft Customer Solution Case Study

Overview “With Microsoft and Technology Connexion, ACL Country or Region: Thailand Bank embraces a clear vision as a financial Industry: Financial Services institution—trustworthiness and innovation.” Customer Profile K Thongchai Ananthothai, President, ACL Bank Asia Credit Limited (ACL) Bank is headquartered in Bangkok and is Asia Credit Limited (ACL) Bank, the fourth largest finance Thailand’s fourth largest finance company in Thailand, is transforming itself from a finance company. company to a full commercial bank. The company’s Business Situation management has a clear vision of its future role in the ACL Bank wanted to transform itself from marketplace, but needed a way to define a rapid path to being solely a finance company into a commercial bank. realizing its goals. One element was bringing in Technology Connexion, a partner with deep banking experience, to help Solution Using the Microsoft® Channel Renewal design the new business processes and human resource Framework, and with the help of systems and define the IT requirements. Another element was Technology Connexion, ACL Bank created a design for its new business using the Microsoft® Channel Renewal Framework, which processes, human resources, and IT enables the development of reusable business services across systems. more than one channel (branches, customer care center,

Benefits Internet) in order to provide a consistent customer experience  Business agility and take advantage of integrated channel renewal initiatives.  Competitive service offerings  Integrated back office Microsoft technology provides a cost effective and scalable  Risk mitigation environment through which ACL Bank provides new banking services to a growing customer base. Situation finance, fixed accounts, savings accounts, ACL Credit Public Company Limited (ACL and checking accounts. While these on the Bangkok Stock Exchange) is services are also offered by other banks, Thailand’s fourth largest finance company ACL Bank expects to set itself apart with by assets and equity. It is an affiliate of the superior technology. country’s largest bank, Bangkok Bank PCL. Asia Credit Limited (ACL) Bank offers loans The company’s management has a clear and savings accounts like other financial vision. The challenge lies in creating a institutions with one subsidiary doing design and implementing the support business in securities. Its principal systems that will fulfill that vision. operations are lending to corporations and small to medium enterprises of various K Thongchai Ananthothai, President, ACL kinds. Bank, explains, “Technology can be divided into two major views: the customer’s point “Microsoft helps ACL K Sumana Pornnutvutikul, Executive Vice of view and the internal point of view. When President, Recovery Division, ACL Bank talking about internal technology, people Bank design says: “ACL is transforming itself from a tend to think about the operation system technology that is new public company into a bank. ACL would like and system efficiency. With a good system, to become a technology leader in the there is less chance for error and some to Thailand… and banking industry. To accomplish this goal laborious steps are removed because gives our bank the we need experts in various fields.” technology can perform that function. Employees will have more complete cutting edge.” Challenges and Goals information for greater flexibility. In K Ratchanee Mesommonta, Assistant CEO In the banking business, services, and addition, they have greater access to the and Executive Vice President, Technology products tend to be very similar company’s objectives. Evaluation and Division, ACL Bank commodities. ACL Bank wanted reinforcement is managed better when technology that would provide a more there is more access to detail. interesting product, and one that is different from that of other banks. They wanted “When talking about technology externally, innovative technology for better client people generally think of the operating service. system, encompassing the system’s efficiency, cost reduction, error reduction, K Sumana says: “ACL Bank is new and not and step reduction. If an employee has yet big. Our goal is to be a ‘small but cool’ accurate information, there can be more bank by providing services that the other flexibility when providing client services.” big banks cannot provide.” Solution ACL Bank first started as Asia Credit Public The steps ACL Bank followed were to Company Limited with products such as create an overall business model and loans and certificates of deposit. With design and then to implement the technical government approval to transform itself into architecture to support that design. a bank, the company can offer a much wider range of services, including trade “Everything obviously “From services to human resources, we Business Plan want to become a leader in technology in Besides petitioning for a license, to become does need to scale this business,” says K Ratchanee a bank ACL Bank had to go through an from 1 to 10 to 100. Mesommonta, Assistant Chief Executive extensive process of forecasting—not only Officer and Executive Vice President, in technology and human resources, but We want to introduce Technology Division of ACL Bank. also in logistics and architecting a business new capability and “Currently, our most important task is model. choosing the core system, as well as scale that…. ACL is coordinating support systems to be used K Tarissa Tanjasiri, Senior Executive Vice going to be 10 times when our bank opens on October 1, 2005.” President, ACL Bank notes: “At ACL Bank, we do have some advantages: no old bigger in 4 years time legacy systems, no large numbers of staff than it is today.” to re-educate, and few branches. We are at the beginning, starting from zero, like a David Brearley, Managing Director, plain white paper that allows you to do Technology Connexion anything. You can plan it any way you like. Microsoft is helping us with the design process, systems control, and with the image of the company as a modern commercial technology-driven bank.

“Microsoft understands where we would like to go and what markets we are targeting. They helped us plan how our branches should look, where they would tentatively be located, what technology we should start with, and what type of staff we should have.”

K Ratchanee recalls, “Microsoft joined us early on and helped us analyze platform and core banking alternatives. Microsoft helped us even though there was no discussion or agreement concerning benefit to Microsoft made at that point. They also oversaw the architecture of our branches, to ensure the best image and attractiveness.”

ACL Bank is planning more new brick-and- mortar branches over the next three years.

Channel Renewal Microsoft brought in Technology David Brearley, Managing Director, Connexion, a partner with extensive Technology Connexion, says, “ACL Bank’s banking experience to assist with the CEO has a very strong vision about what business model. K Ratchanee continues: he wants to achieve and the pace at which “We asked Microsoft and Technology he wants to achieve it. He has definitely Connexion to help us define the details for recognized that technology is a key part of a successful transition. Microsoft enables what he wants to achieve, indeed he the most up-to-date technology new to describes it as a technology-led bank. For Thailand. Technology Connexion uses its us, there was the attraction of a customer experience with other banks to help us who wanted to do something different, a combine technologies into a system—from customer who wanted to use technology work flow and analyzing business models aggressively, and a bank that wants to to the selection of software, the core make a mark on the stage here.” banking system, and choosing the type of platform to best coordinate with our core ACL Bank had previously engaged an banking system.” international consulting firm to define a business strategy, but it had a gap between K Thongchai comments: “With the aid of strategy and execution. Technology Microsoft and Technology Connexion, ACL Connexion’s role, introduced by Microsoft, Bank embraces a clear vision as a financial was to help the bank realize a feasible “The right technology institution—trustworthiness and innovation. execution plan by its deadline.

should allow the client “We have been working with Microsoft and Brearley comments: “And that’s our job to experience faster, Technology Connexion to study the there, to develop the business case for process of Channel Renewal. One concept investment, to define the business better, and more leads to another in this process and, as we processes, and estimate the cost of Microsoft Customer Care Framework (CCF) flexible services.” develop the plan, they bring in invaluable implementation and therefore determine technology for the competitive market of the ROI [return on investment]. K Thongchai Ananthothai, President, ACL the future.” Bank “There are all sorts of challenges in terms K Tarissa adds, “We get along very well in of how to get the company from where it is our planning process with our partners— today to where it wants to be—challenges Microsoft and Technology Connexion. with people, technology, process. These Microsoft has great expertise in software things have to come together quite quickly. and in branch banking. Technology Connexion is experienced in a core banking system that can help us differentiate ourselves from our competitors.”

Technology Connexion is headquartered in Singapore and serves all of Asia. “ACL Bank’s current small size presents additional challenges,” Brearley adds. “Most solutions available for the banking industry work best for large banks. The threshold cost for adopting technology for a large bank means buying big applications and big hardware, which is costly. Plus, ACL is a finance company and turning itself into a bank; just changing from one type of business to another presents big challenges. “ACL’s advantage in using the Microsoft platform is that it can keep the cost of ownership in proportion to its size, and grow the capability as it itself grows. The up-front investment cost can be grown commensurate with the growth of the bank as the business gains customers and traction.”

By transforming into a wholesale bank, ACL Bank has taken a strategic step. Brearley continues: “Everything obviously does need to scale from 1 to 10 to 100. We want to introduce new capability and scale “Multi-Channel Integration (MCI)—Internet, that. In pure sizing terms, ACL is going to phone, walk-in—showcases the bank as be 10 times bigger in 4 years time than it is technology driven,” says Soo Ching. “If a today. Microsoft always has a good customer calls someone in the bank and product. For the Financial Services that person is not the relationship banker or Industry, the products are now much more personal banker for that customer, then the reliable—more secure and therefore much operations person dealing with that more saleable—than they were five years customer can bring the relationship ago.” manager into the conversation by video teleconferencing. All sides can see the Choo Soo Ching, Managing Director, account or statement or information plus Technology Connexion adds: “Basically, the particular customer, much like a video we have a chance to build a bank from conference.” Key Success Factors scratch. In the case of ACL, we are starting Scalability x10 from a green field perspective. This bank Soo Ching points out: “That is something will be very different from a legacy bank. very new in the Asia Pacific area. While Reliability 99.999% We are going to deploy things like multi- some banks are already doing that in Services Innovative channel. And we are bringing in Microsoft® Australia, this breaks new ground in Customer Care Framework, a framework Thailand.” that provides a set of tools, which allow the bank to be able just to deploy the front end, Benefits rather than buying packages for the front As a new and small bank, ACL Bank does end.” have a disadvantage compared to large banks—fewer channels of distribution. Microsoft Customer Care Framework Currently many brick and mortar branches (CCF) is part of the Channel Renewal would cost too much. K Sumana points solution stack in improving efficiency, out, “We must think of innovative ways to increasing cross sell/up sell capabilities via present our products and services to an integrated, unified agent desktop. Key clients.” products and technologies include the Microsoft Windows Server™ 2003 Multi-Channel Integration operating system with Microsoft SQL K Sumana continues: “As a result, we have Server™ 2005 as the database, Microsoft come to Channel Renewal. Microsoft gave BizTalk® Server 2006 as the data us the idea about Channel Renewal, integrator, and Microsoft Host Integration meaning a whole set of new features, Server 2004 as the access method to including MCI and the idea of a virtual mainframe data. Windows Server 2003, branch not a physical one. Clients can get SQL Server 2005, BizTalk Server 2006, service by Internet and telephone, plus the and Host Integration Server are all part of CRM [Customer Relationship Microsoft Windows Server System™ Management] system will deliver more integrated server software. knowledgeable service because the bank will know more about customer preferences.” “Our RM [Relationship Manager] can go K Thongchai concludes: “The right out to see a client by connecting to our technology should allow the client to system at headquarters; it will be as if the experience faster, better, and more flexible branch was in the client’s office. By this services.” method, we can provide service anywhere.”

Better Service K Tarissa summarizes, “Our bank is targeting small and medium businesses. We think proprietors of these businesses are a technology savvy younger generation. With our transformed project, we hope to tap this market niche. Our success depends on how we differentiate ourselves by technology that provides quicker and better service than our competitors. Our bank would like to be a small but modern bank excelling in service so clients choose us as their preferred bank.”

K Ratchanee adds: “In the banking business, the most important thing is quick service at a reasonable price. We look for partners to bring in technology to aid us in this goal. Our biggest concern—besides what we are doing for the back office by way of technology, staff, and setting up a data center—is the front office, which has direct contact with clients. Sales and Marketing needs tools to service clients promptly; this in turn reinforces the client’s own ability to compete in the market.”

“Microsoft helps ACL Bank design technology that is new to Thailand. While other companies may have the same idea as ACL Bank, much depends on how fast we finish the job and offer it to the public. This technology is not new abroad, but it is definitely new in Thailand and gives our bank the cutting edge.” For More Information Microsoft Channel Renewal For more information about Microsoft Framework products and services, call the Microsoft The Channel Renewal Framework is one of Sales Information Center at (800) 426- the Microsoft Industry Priority Solution 9400. In Canada, call the Microsoft Scenarios (IPSS), which enables the Canada Information Centre at (877) 568- development of reusable business services 2495. Customers who are deaf or hard- across more than one channel (branches, of-hearing can reach Microsoft text call centers, Internet, ATMs/POS) in order telephone (TTY/TDD) services at (800) to provide a consistent customer 892-5234 in the United States or (905) experience and take advantage of single- 568-9641 in Canada. Outside the 50 channel renewal initiatives. It delivers United States and Canada, please cross-channel consistency, a superior contact your local Microsoft subsidiary. customer experience, operational To access information using the World efficiency, risk mitigation, an integrated Wide Web, go to: www.microsoft.com sales and service environment, and new business models in the branches—both For more information about Technology virtual and brick and mortar— from service Connexion products and services, send to sales. e-mail to: [email protected]

For more information about ACL Bank products and services, visit the Web site at: www.aclbank.com/th

Software and Services  Technologies  Microsoft Visual Studio® .NET 2003 − Active Directory  Microsoft Windows Server System  Solutions − Microsoft BizTalk Server − Microsoft Customer Care Framework − Microsoft Host Integration Server − Microsoft Channel Renewal − Microsoft SQL Server Framework − Microsoft Windows Server  Microsoft Windows XP Professional © 2006 Microsoft Corporation. All rights reserved. This case study is for informational purposes only. MICROSOFT  Microsoft Office System MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY. Microsoft, Active Directory, BizTalk, Visual Studio, Windows, Windows Server, and Windows Server System are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries. All other trademarks are property of their respective owners.

Document published April 2006