Banking technology the key driver of customer growth

Australian based Financial Network Services Pty Ltd ('FNS') is an acknowledged global leader in integrated banking solutions which counts some of the world's most innovative, fastest growing and profitable financial institutions among its client list.

FNS Senior Vice President, Corporate Marketing, Trevor Builder, says: "the notion of core banking technology driving business strategies represents something of a turnaround in thinking about banking systems."

"In the past core banking was viewed as purely a 'back office' process and as such represented a major 'cost' to business. But with the developments in our fully integrated 'BANCS'® solution, together with the development of new technologies surrounding multi delivery channels such as branch, internet, IVR and phone banking, the core banking system is now at the heart of Customer Relationship and growth strategies.

"Clients are increasingly telling us that revamping their core banking system is often the key driver of their business strategy and have used our solution as an opportunity to re-engineer their entire business processes, in conjunction withy branch renewal around a multi channel delivery strategy.

"A good case in point is Egyptian Commercial Bank, becoming one of the first banks in the region to launch an ASP-based (Application Service Provider), retail banking solution hosting all its banking services, using innovative .Net technologies provided by Microsoft Egypt, ASP services provided by National Systems Research and BANCS® supplied by FNS.

The outsourced banking system is hosted by the Egyptian Cyber Centre based in Cairo, which is expected to slash the bank's internal IT overheads and provide almost unlimited expansion capability in the future, through new technologies which will accelerate the niche bank's thrust into the consumer area. The new system will be further expanded with specialist Treasury and Trade finance solutions also provided by FNS."

"A further example is Chinatrust Commercial Bank (CTCB), based in Taiwan which used an ambitious 'e-enable' strategy based on our core banking technology to become Taiwan's largest, fastest growing and most awarded private bank (now one of the largest banks in the world in terms of capital).

"Their experience with the BANCS solution showed how the right technology can underpin a winning business strategy, which in their case focused on customer service, growth and operational efficiency."

After implementing the BANCS solution, Chinatrust won "Asia's Leading Companies Award", "Best Domestic Commercial Bank in Taiwan", "Best Emerging Market Bank in Taiwan" and the "Euromoney Award for Excellence" in recognition of its quality services and innovation.

Another client, Nova Ljubljanska Banka d.d. (NLB) of Slovenia (largest bank in the Balkans) engaged FNS to help conduct a complete business process reengineering project - aimed at modernizing the bank's entire IT infrastructure so it could compete with international banks ahead of the country's entry into the European Community.

According to NLB, the development of new banking products and services made possible by the product build capabilities of BANCS was an important contributing factor to the bank becoming more competitive both domestically and among the global banking community.

Mr Builder says a key focus of the NLB project was replacing 30 year old legacy systems with a new core banking system to dramatically improve its risk management, together with the ability to quickly roll out new 'western' type banking products for its customers.

"NLB recognised that being able to obtain a comprehensive view of how its customers dealt with the bank was very important in minimising credit risk. This is where the BANCS CRM (Customer Relationship Management) strengths were of major benefit in reducing its bad debt exposure.

"The CRM concept is one of the primary features that sets the BANCS® solution apart from competing banking systems, and is one of the many ways that the solution has grown and developed in response to the need for technologies closely reflecting overall business strategies," Mr Builder said.

NLB was last year named Slovenia's best bank in the 2003 Bankers Awards, defying slow growth in the European economy to post healthy financial results while actively pursuing its goal to become the leading bank in Central Europe. The latest plaudit follows a host of awards since implementing BANCS including the "Euromoney Award for Excellence" which it has won on a number of occasions.

Back in Australia, FNS's BANCS solution was the core enabling technology for the country's fastest growing bank, ING Direct, whose 'branchless' direct banking model has made a major impact on the market.

ING has reportedly been signing up new customers at the rate of 20,000 every month, representing a 25-fold growth in customers over the past four years. ING currently has approximately 500,000 customers, with around $10 billion in savings and about $10 billion in mortgages.

FNS supplied the banking solution which enabled real time transactions to be conducted by phone and over the Internet. The customer service and overall performance delivered by the bank have been so effective that it was recently voted "Best Foreign Bank" (Australia) by the Banking and Finance Industry Association.

In South Africa, the innovative application of FNS technology by Capitec Bank has generated large numbers of new customers including disadvantaged groups many of whom now enjoy access to general banking services for the first time.

Automated workflows built into the BANCS solution for Capitec Bank uses sophisticated identification capture and verification processes (bio metrics) supporting multiple peripheral devices (such as scanners, cameras, printers and card readers). The workflow design based on BANCS' inbuilt component workflow tools enables entire business processes to be workflowed and automated.

Customer details including identification papers and a photograph are scanned into the system to eliminate paperwork. Application processes are so streamlined and simplified for bank staff that a client account can be fully activated and a transaction card (debit card) issued within 10 minutes, according to Capitec Bank.

Capitec's Chief Executive, Michiel Le Roux was recently quoted as saying: "This is a wonderful combination of modern technology and the key elements of client convenience which provide a banking service with a real difference."

Capitec's revenues and earnings per share more than tripled in the six months to August 31, 2003, with the strong performance attributed to client acquisition, aggressive product pricing, rapid expansion of its low cost branch network and improved management of arrears resulting in a strong decline in bad debt.

BANCS has revolutionised many other banks in both rapidly developing and mature economies, and was now being seen as a core driver of business strategy in many settings around the world. FNS is one of many international banking technology companies exhibiting at this year's Channels Banking Strategy Conference and Exhibition in Dubai.