Highlights of 4th annual Bancassurance Conference held in Vienna, Austria. An amazing presentation by Kalpesh Desai, CEO Agile Financial - Creating an Agile Bancassurance Platform
1. Creating an agile BancAssurance platform
4th Annual BancAssurance Conference - Vienna, Austria
23rd April, 2009
Kalpesh Desai
CEO, Agile Financial Technologies
kalpesh.desai@agile-ft.com YOUR LOGO
www.agile-ft.com
Confidential Page 1
2. Agenda
1 BancAssurance – Current business drivers
2 Challenges in deployment
Agility In
BancAssurance
3 Technology as an enabler of business agility
4 About Agile Financial Technologies
Confidential Page 2
3. Agenda
1 BancAssurance – Current business drivers
2 Challenges in deployment
Agility In
BancAssurance
3 Technology as an enabler of business agility
4 About Agile Financial Technologies
Confidential Page 3
4. The need
Regulatory
Banks
Regime
Extensive branch
network, infrastructure &
Relaxed regulatory penetration
Customer retention
Regime
challenges – require
shift to universal Low cost
Dismantling barriers banking model distribution model
between banking
and insurance
products Opportunity to diversify
banking revenues – fee
income
Customer
Centricity
Complex financial needs – Achieve reach in a
require asset protection timely and cost-
(insurance) and growth 70% of world efficient manner Need to target
(investment) plans assets with HNWI’s to Margin
people > 50 position pressure/credit
Unprecedented complex Access to risk/enhanced KYC
population ageing products liquidity
Insurance High distribution
spend increases costs Channel fidelity Economic
as GDPs reach Poaching of quality slowdown
threshold agents
Power concentrated
by a few leaders
Under-serving of
Clients Insurance middle-tier
consumers Environment
Companies
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5. Fragmented Approach By Banks & Insurers
Client
Branch network Agents/Brokers
Insurance
Banks sell Banks sell Life Companies
Non-Life and Pension sell Investment
products products Products
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6. Channels Servicing The Landscape
Opportunity to introduce
BancAssurance
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7. Services Expectation Gap
•Automate services; evolve technology
•Outsource non-core functions
High •Identify and structure fees based on “needs-based” approach
Service
Needs
Level Client NEEDS
Service requirement
GAP
Low Profitable person-to-person
servicing capability
0 Mass Emerging Mass Affluent Emerging High Net
Market Affluent Wealthy Worth
Client Segment
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8. Different strokes for different folks
Plan
Build &
Build
Manage
Ultra Legacy
Wealth
HNWI
Protect
Mega Net Worth Wealth
Customers
Advice
HNW Customers
Mass Affluent Customers
Personal/Premier Banking Customers
Volume of potential Clients
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9. What clients want
How clients desire to be
Traditional process of servicing
serviced
• Brokerage services (product • Global outlook to “asset
experts and financial advisors) management”
• Investment Management • Research on international
services (relationship-based development
approach to financial products) • Transparency and visibility on
• Wealth Planning (personal portfolio performance and risk
financial planner) mitigation
• Support and resources and
tracking of social returns on
their philanthropic and
charitable pursuits
• Choice of sectors,
geographies, community
focused, socially responsible
investment screening
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10. Servicing the need
Advisory based sales
Segmented
products
Over the Counter/Direct
Marketing
Creditor Products sold with
existing product distribution
Mid balance High balance Preferred/
Salary
Loan holders liabilities liabilities Private
accounts
customers customers Banking
Client Base
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11. Business Drivers
Diversify the banks’ products and
services portfolio
Integrate marketing efforts
Reduce dependence on interest-
based income
Optimize distribution costs
Gain access to a larger client base
Increase cross-selling opportunities
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12. BancAssurance Business Models
Classical fully
integrated
• All products are
sold by the bank
Full-time selling • Advisory based
model product offering
• Trained bank staff • Centralized support
sell most of the services
Embedded products
Agents • Integrated into the
• Wide range of Wealth
• Insurance agents simple & complex Management
sell in banks products Platform
Distribution
• Licensed advisors
Agreements within the bank
• Referral model • Higher product
• Inadequate training complexity
to bank employees
• Limited product
range
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13. The Need
Leverage joint branding
Product Creation & Product fitment
Value to Underwriting and differentiation Value to Bank
Insurer
Reduce distribution costs
Additional offering at no
by leveraging
additional infra cost
infrastructure
Leverage of branch network Holistic financial offering to
(reach) and client base (depth) client
Value to Customer
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14. Objective – Leverage Customer Centricity
Objectives
Factor Bank Insurance Company
Retention of clients Access to a quality customer
base. Ability to offer customized
Customers
offerings to a wider, wealthier
client base
Ability to service more Revenue and channel
Serviceability financial needs under one diversification
roof
Effective and profitable Quicker geographical reach on
Infrastructure
resource utilization the bank„s backbone
Revenue diversification, Low distribution cost, increased
Economics increased fee based income, customer penetration and
reduce revenue volatility servicing, increased revenues
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15. Objective - Increase revenues/cross-sell
Credit Shield/
Lost Card
Insurance
Credit cards
Credit Life
Insurance
SME Banking
Mortgage Life
Insurance
Mortgage
Motor
Insurance
Auto Loans
Personal
Credit
Insurance
Personal Loans
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16. Objective - Winning Strategy For All
Customers
Receive holistic solution from a
one-stop shop
Insurance
Banks Companies
Deepen client New distribution
relationships channel
Increase fee income Low distribution cost
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18. Agenda
1 BancAssurance – Current business drivers
2 Challenges in deployment
Agility In
BancAssurance
3 Technology as an enabler of business agility
4 About Agile Financial Technologies
Confidential Page 18
19. Integrating BancAssurance in operations
Global Banking Private Banking
and Markets Global
Institutions HNWI
Corporate Mass Affluent
Commercial Personal
Banking banking
SME Mass Market
Wholesale and Retail Products
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20. Process and Technology Challenges
Inability to align
products and
services with
customer profitability
Islands of
information created People and
by the deployment of relationship
point solutions and dependent
disparate IT processes
solutions
Poor visibility of Past revenue growth
economic Business led to increased fixed
performance and Under- costs of acquiring
drivers by customer performance and serving new
segments customers.
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21. Technology Can Inhibit or Enable
• Inflexible Applications
• Islands of information
• Tedious Product Development
• Interface touchpoints
• Outdated software
• Succession planning
• Uncertainty
• Implement a multi-carrier
BancAssurance model
• Constantly evolving needs
• Increasingly sophisticated
and demanding client base I.T.
• Increase competitiveness
Business
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22. "In a time of accelerating turbulence, the
valuation of a company will be strongly
affected by how it executes change."
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23. BUSINESS AGILITY
!! NOT A LUXURY !!
The ability of a
business to adapt
rapidly and cost
efficiently in response
to changes in the
business environment.
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24. Question
how do you change a business model and
innovate?
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25. If your current systems do not enable teams to
collaborate
And create a common platform linking
processes, knowledge and tools to leverage the
BancAssurance opportunity
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26. Bridging the gap
• Net worth • Based on Client Lifetime
• Client interests, Value
frequency of interaction, • Analyze client needs
communication and create tailored
preferences and offerings
financial behavioral • Build additional
attributes. capabilities or find
partners to service the
gap
Position
Customer
Products and
Segmentation
Services
Stay Current Service
with Client Delivery
Needs Model
• Continuously monitor • Determine a service
and update client approach
profiles and behavior • Deliver service through
patterns multiple channels and
• Engage research and practice models.
surveys to question
internal assumptions
Confidential Page 26
27. Agenda
1 BancAssurance – Current business drivers
2 Challenges in deployment
Agility In
BancAssurance
3 Technology as an enabler of business agility
4 About Agile Financial Technologies
Confidential Page 27
28. Aligning Business
Business and Organizational Operational
customer strategy design effectiveness
• Identify and migrate • Break out of silos to • Build, buy or
clients from transition from a partner to offer
banking services to product-centric to a more complete
asset management customer-centric asset
services organization management,
• Position advisory • Integrate different retirement & estate
capabilities and components of planning and
best-of-breed offering to provide protection
investment and a single point of capabilities
insurance products contact for clients • Leverage physical
• Assess viability of footprint
providing a asset • Ensure rigorous
management adoption of “know
offering to the mass your customer
affluent rules”
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29. With I.T.
Shift from islands of information to a holistic integrated system
Deploy CRM to enable identification of potential wealth-
management clients and provide an integrated view of the customer
and information across all product groups
Using technology as a platform for serving the mass affluent
Improving information and data exchange to share information
across silos
- Integrating legacy and new systems
Outsource non-core functions to service providers
- Investment Accounting
- Research
- Reconciliation and transcription
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30. Technology as an enabler of business agility
Technology is a key operational factor for every insurer
- From Lead Generation to Policy administration and Claims Management.
Major IT drivers:
- New product development.
- Integration with insurance company data, sales and services practices
- New distribution channels.
- New regulatory requirements.
Integrate tightly with the Bank’s own systems
Web-centric IT system.
- On-line case management and request handling
- Channel Management.
- Policy, Product details and online premium calculator
- Facility for group insurance customers to view individual savings status on the web.
Facility to pay premiums through credit cards, Net banking, Standing
Instructions, etc.
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31. Approach
Insurance Products
Web based access Interface between IT systems
to Channels, Employees, in the Bank & Insurance
Branches and Customers company
Banking Products
Creation of new products Service offering by
Servicing client needs Integrating processes
Core Banking Platform
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32. Approach
Maintain bank‟s service
standards Multi-carrier support
Integration with
core banking
(Customer
Information)
Ease of premium
payments using auto Utilisation of alternate
debits, cards, net service points to minimise
banking, collection cost
agencies
Confidential Page 32
33. Technology as an enabler of business agility
Increased
o Create value for banking
Response and insurance customers
Levels
o Improve experience for
Increased distributors, partners and
Revenues Employees
o Reduce the sales cycle
Cost o Enhance interoperability
Efficiency
between systems
o Shift to holistic integrated
systems from islands of
Scaleability disparate information
o Provide integrated view of
Integrated/ customer information
Aligned
Processes
across various products
o Improve information-sharing
practices
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34. Self serve capabilities using the web
Bank Employees/
RMs
Unified Technology Platform
Scalability and Adaptability
Agents Insurance
Consultants
Distribution
Channels
Corporate/ Brokers
Individual
Customers
Direct
Marketing
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35. Examine deployment models
Higher return on Software as Service
IT investments Entire computing capacity is outsourced
to third party/ solution provider
Competitive
costing
Platform as Service
Service to create, operate and run applications
Expense Control
Infrastructure as Service
Fully outsourced infrastructure and application
environment
Confidential Page 35
37. Thank you
Kalpesh Desai
Confidential Page 37
38. Agenda
1 BancAssurance – Current business drivers
2 Challenges in deployment
Agility In
BancAssurance
3 Technology as an enabler of business agility
4 About Agile Financial Technologies
Confidential Page 38
39. The Evolution
Backed by Private Equity, Agile Financial Technology is a mid-sized Indian IT company focused on
providing products and services to the Investment Banking, Asset Management, Insurance and Capital
Market sectors
M&A Strategy led by a strong management team
100% buy-out of IT/ITES companies Management teams of underlying
Agile emerges as a vertically integrated
focused on the Financial Services & companies are inculcated into Agile‟s
mid-market player
Insurance Sector core team
Create economies of scale, efficiency and a powerful sales, support, and marketing process to leverage a
vertically integrated product & services offering
Consolidated revenues of US$ 30mn in FY08
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40. The Constituents
Investment Banking Insurance Management Technology Solutions BPO
•Treasury & Dealing •General, Life, Medical, •Managed Services •Application processing
Activity
•Fund Management Broking, Banc Assurance •Security Consulting •Document Verification
•Portfolio Management software •App maintenance/ •KYC
•Liabilities Management •Takaful compliant development •Banks, AMCs, Insurance
•V@R Management •EAI •Strategic Resourcing
•ALM
•Over 14 years in •Over 20 years in •Over 6 years in business •Over 20 years in
business business •140+ employees business
•130+ employees •120+ employees •Provide consulting, •2100+ employees
•Ranked by IBS •Initial deployments in the development and •40 locations in India
Intelligence (UK) as 6th M.E. at Emirates managed services to •India‟s largest domestic
Overview
largest Treasury solutions Insurance, Al Ain Al Ahlia banks, insurance BPO
provider globally •Oldest Oracle partner in companies and asset •Provides transaction
•Largest Indian wholesale India (1985) management companies processing services to
banking software provider EVERY bank, mutual
•Ranked as “Highly fund, and life insurance
recommended Company” company in India
by THE BANKER, India
•Chola-Mitsui •Bombay Stock Exchange
•Union National Bank •Mashreq, First Gulf
•State Bank of India
Key Clients
•Bahrain National Holdings •Apollo DKV Bank. ADCB
•Deutsche Bank •Barclays
•AIG Mutual Fund •Amex, StanChart
`
•Edelweiss •BNP Paribas
•StanChart Mutual Fund •Barclays
•ONIC (Oman) •Edelweiss
•Reliance Mutual Fund •AIG`
•Astra (Singapore) •Kotak Life & Kotak AMC
Confidential Page 40
42. Milestones
Our BPO, Pamac processes over 7% of all retail applications & 27% of all
new credit card applications processed in India
Pamac is ranked amongst the largest Indian domestic BPO vendors by D&B
Over 10mn transactions processed per annum. Over 70mn US$ of loans
disbursed per annum
The largest Mutual Fund in India (over 22 Bn$ AUM) uses iDEAL Funds
iDEAL Funds processes 30% of India‟s Mutual Fund‟s AUM
Around 45% of the money exchange transactions in India are managed by
MercuryFX
iDEAL is ranked as the 6th largest Treasury solution globally by IBS, UK;
and the largest Indian wholesale banking software in terms of footprint
Confidential Page 42
44. Our Presence
Central & Eastern Europe Middle East
Russia
UAE (Direct Presence)
Kazakhstan
Oman
Ukraine
Bahrain
Poland
Kingdom of Saudi Arabia
Kuwait
Qatar
Africa Asia Pacific
Mauritius (Direct Presence) India (Direct Presence)
Kenya Sri Lanka
Tanzania Indonesia
Malawi Malaysia
Ethiopia Phillipines
Nigeria Singapore (Direct Presence)
Ghana
Confidential Page 44
45. iDEAL Investment Management Suite
Investment/Fund
Banks Finance Companies
Houses/Insurance
•iDeal Integrated •iDeal Funds – Front,, Mid & •iDEAL Finance –
Treasury Management Back office for fund, Liabilities (Borrowings)
•Mercury FX –Merchant investments and portfolio Management
& Retail FX management •Quadryx – OTC
•Quadryx - OTC •Fund Managers / Investment Derivatives
Derivatives Managers in AMCs, •CALMS – ALM
•RiskMark – Value @ Insurance Companies and •Clients
Risk Portfolio Management
•L&T Finance, Shriram
companies
•iDeal Wealth Transport, Canfin Homes,
Management •FundMetrics –Risk & Sundaram Home Finance,
Compliance reporting Fullerton India Credit,
•Clients
•iDeal Funds Performance HDFC, Kotak Prime
•State Bank of India
Reporting Limited, Fullerton India,
Karnataka Bank,, Indian
Bank, Axis Bank, OBC, •Clients Cholamandalam DBS
Central Bank of Sri •AVIVA Life Insurance*,
Lanka,, PNB Gilts, HDFC Bharti AXA Life*, TATA AIG
Bank, ING Vysya Bank, life*, LIC (Debt portfolio),
SocGen, Union National Shriram Life, Reliance Life,
Bank (UAE) Reliance general, Sahara
Life, BNH (Bahrain),
Reliance MF, AIG MF,
StanChart MF, HDFC MF, SBI
MF, , Pru ICICI
Confidential Page 45
47. Technology Solutions
Solution Framework Infrastructure Services
• IntiCraft – A customer self service application for • Data Centers – Design, Security Paradigm,
Mutual Funds Implementation, Movement and Support.
• Life Insurance Portal – Customer, Agent and • Infrastructure Software Support – Database,
Employee Portal – A virtual office for Life Middleware, OS, Security and Messaging
Insurance Companies • Disaster Recovery Design and Implementation
• HRMS add-ons – Expense Management, • ISO 270001 Consulting
Appraisal System, Emp Intranet, Emp Helpdesk • Database and schema migration
• Secondary Sales – Tracks movement of goods
sold beyond the first point of sale
Enterprise Application Integration System Integration
• Application Integration • Hardware sizing and selection
• Customer Application development and • Building a solution for solving a problem – may
maintenance require a mix and match of third-party products
•Middleware expertise on Oracle, IBM and Sybase
Confidential Page 47
48. Business Enablement Services
Verticals Serviced Fund Admin/ Investment
Banks NBFCs Insurance Telco's
Registrars Banks/Funds
Equity & Policy Credit Risk
Processes Enabled
Fund R & T/ Back Office
Forex & Claims Evaluation/
Accounting IPO Processing Accounting
Research Admin Processing
Receipts/ Data Mining/ Customer
Research Accounts Reporting
Payments MIS interaction
Activities
Outsourced
Txn
Fulfilment Verification Dispatch Reconciliation
Processing
Services Business Process Application Managed Strategic
Provisioning Consulting Development Services Staffing
Application
Provisioning
iDEAL 3rd Party/Client Apps
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49. The Company We Keep
Banks
Investment
Management
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50. The Company We Keep
Insurance
Financial
Services
Confidential Page 50
51. Infrastructure
India
SPOKE
- 40 cities across India, 80+ locations
SPOKE B(3)
A(3)
SPOKE
SPOKE SPOKE
A(2)
C(1) C(3)
- Hub & Spoke model SPOKE
B(1)
SPOKE
B(2)
SPOKE
ISO 9001:2000 certified BPO A(1)
H
U SPOKE
H H C(2)
B
H.
- 300+ employees in product development and U
B
B
O.
U
B
H
deployment A
H. U
C
SPOKE
O. B F(2)
- 150+ employees in technology support services SPOKE
D(1)
H
U
H F
SPOKE
F(1)
U
B
- 2,100 employees in business enablement services D
SPOKE
E(1)
B SPOKE
E
E(2)
(BPO) SPOKE
D(2)
SPOKE
SPOKE
F(3)
SPOKE
D(3) E(3)
- 7,600 resources deployed onsite in banks
UAE
- Dubai Internet City
- Dubai Outsourcing Zone
- Sharjah Airport International Free Zone
Confidential Page 51