Community

If you 'old guards' allow me I would like to put the following  topic under discussion:

I think there is a great lack of understanding on what is the banking business and what are other businesses.
Each industry, commerce or services offer their 'products'.
And it has heavy marketing campaigns to get customers in each area, to buy its products.

Now, what is the Bank's core product?

Money?

But the money come from customers, right? (So Money is NOT the Bank's core Product).

In other industries, the customer purchases goods. In the banks, the commodity (money) belongs to the customer.

Now, what are the concerns of bank's customers?

In my simple view, they are three types of bank customers:

1. The customer who needs money at the moment.
It will contact the Bank and will contract the best service to fit its needs, a Loan, Leasing, Working Capital, Mortgage, among other offers.

2. The customer who needs 'to hide his dark side' securely in a strong and safe box (the bank).
It will contact with the bank to choose the best service to keep its money safely.
Can be a Physical Coffer, a Current Account, a Savings account, a Time Deposit, an Investment, among others.

3. The customer who 'uses' the bank services to executes its Standing Instructions and others like:
Utilities payments, Installment payments, Periodic Deposits, Internet shopping, Cards debit/credit, Blockchain settlements, among others.

Now, if the bank's customer discovers that the bank goes 'to spy' its 'dark side' (Customer's 360 degrees view), the 'trust' weakens.

So, the KYC on the banks should be different of the KYC of others industries.

Again, in my simple view, the customer is who should have a 360 degree view of the bank, itself managing its money, and not the other way.

So the right way to the banks win customers is providing tools that allow customers to 'manage' their assets/liabilities/services in the safe box, seamless and intuitively, without having to go through multiple product's menus and other barriers.

To achieve that, the business in the bank must be treated corporately instead of by line-of-business.

Here comes the turning point, the new paradigm in the banking business, in which I am working with.

"Banks can simultaneously run their own ledgers, and balance the distributed ledger".

That's the way!

Alex & Ketharaman,


"Bankensteins are not the future".


This is clear like crystal!


I am an enthusiast of the best strategy for Digital Banking transformation.

I'm working, for more than 40 years, on the 'hard' side of banking business which is in the back office side.

And you can believe me, the only way to achieve the "full" Digital Banking transformation, is to transform the way in which financial processes are treated in the back office.

Instead of handling processes by “line-of-business”, have to manage processes ‘corporately’.

Any other attempt to improve current processes in the back office, will be to replace six per half dozen.

I’ll try to explain:

1. The financial processes, nowadays, are handled by “line-of-business”.

Obviously, each “line-of-business” will generate its ‘silo’, which in turn will feed other 'silos' such as accounting, compliance, treasury, central bank, customers, and others.


2. By managing the processes ‘corporately’, you will generate only one “silo” – a single source of corporate knowledge.

This alone, already generates a tremendous simplification!
And, as a consequence, the integration happens (think in omnichannel!), as well as extreme agility in managing processes.

Also not to mention, the tremendous reduction in the processes and data storage…
(and beware of Unions, because of the people reduction!).

As the result of my quest "The Bank of the Future" was born.
The BotF is an Holistic Enterprise Architecture which handles processes 'corporately', breaking the today's paradigm of performing processes by line-of-business.

The quest, now, is how to put it to work, mainly in between the "the fintech fiesta" and "Banks race to beat the patent trolls—and Silicon Valley." (http://www.bloomberg.com/news/articles/2016-02-11/disrupting-banks-go-see-what-they-re-doing-at-the-patent-office).

Who should be the owner of all the patents of the several 'Holy Grails' of the "Bank of the Future" Architecture?
The ICT company or the first Bank to adopt them? (My idea is to sell the intellectual property of the Architecture to an ICT or to a Bank).

Comments and ideas are willkommen!

@Ketharaman Swaminathan,

a NFC reader - Near Field Communication - is an RFID reader and is spreading swiftly.
And you do not need an RFID reader in each gantry.
When money leaves the bank, you know to whom 'those' notes are going to.
And when they return you know whom is returning 'those' notes.
What's more, the NFC readers can be used to track the notes in other places, outside of a Bank.
Of course, at first, tracing is not perfect, but it can identify many cases, restricting and inhibiting money laundering.

Nowadays you have the RFID technology.

You can embed an RFID chip in each note (they are smaller than a grain of sand) and track the route of each note electronically.

You don't need to eliminate the high denomination notes!

@Hitesh,

You are absolutely right!

The jump in technology becomes tiny in relation to the enormous task of re-engineering of processes.

Another problem (this perhaps pleasant) is the relationship with the unions, because of the large number of employees laid off due to automation and streamlining of the tasks.

  The transformation has to be carefully planned and especially managed.

@Hitesh,

You got it!

This is the proposal!

To wipe out the legacy systems, piggybacking to the financial transactions, the updating of  all back office tasks such as accounting, compliance, Central Bank, etc.
And one of the beauties of the "Bank of the Future" is the way to process financial transactions, in a corporate way, rather of processing by lines-of-business.
You know, when you process by lines-of-business, you create "silos" for each line-of-business while when processing corporately, you create a single source of information.

This significantly simplifies the entire back office and provides a great agility.

Also, as everything is updated online, realtime, decisions can be taken 'at the moment'.

And last but not least, there will be no more end-of-day tasks. (as known nowadays).

This is the only way to 'bulky banks' catch up with technology evolution!

Any other try will be a change of six by half-dozen...

It is notoriously known that these problems stem from the failure of back office systems, to follow the cosmetic changes to the front-office APIs, omnichannel (the Fintechs), and the appropriate integration with legacy systems.

The "Bank of the Future", an Architecture in which I am working on, solves this problem 'elegantly'.

joao.bohner@gmail.com

"Making the right decisions - and having the back-end capability to ease integration issues - will be key"...

{having the back-end capability}   Here is the brake that hinders acceleration!

Nanda Kumar,

I fully agree with "The opportunities that lie in wait for banks are tangible and extremely useful for the consumer (and for the Bank), be it corporate investment or the high street retail bank."

In the "Bank of the Future" Architecture, which I'm working now, all Transactions and Interactions generated on any channel, are 'enveloped' with the geo-positioning of the activity - Lat, Long and Alt - and are stored in the Single Source of Knowledge, processed by the Single State Engine.

Is in the hands of Marketing personnel use imagination and creativity to better capitalize of these opportunities.

P.S:
Transaction => Activity WITH financial component like payment, deposit, withdrawal, etc.
Interaction => Activity WITHOUT financial component like queries, offers, suggestions, dealings, etc.