By N Ganapathy Subramaniam, President, TCS Financial Solutions
N Ganapathy Subramaniam, President, TCS Financial Solutions discusses how until now, the “I” part of “IT” has not been recognized as a core function in Banks. Banks primarily drive the “T” part of “IT” and the “I” part floats between many different software systems and transactional needs of different silos of the bank. “Information Management” has to become the key engine for driving the business. And the CIO, along with the CEO, have the opportunity to make this happen.
Continuing technology developments and innovations are having profound impact on the way banks interact with their customers, counterparties, and how they undertake their operations.
As banks rely increasingly on information technology and the internet to operate their business and interact with the market, technology risks are bound to become more complex. These risks relate to any adverse outcome arising from the use of or reliance on computer hardware, software, electronic devices, online networks and telecommunications systems. These could be systems failures, processing errors, software defects, operating mistakes, hardware break-downs, capacity inadequacies, network vulnerabilities, control weak-nesses, security shortcomings, malicious attacks, hacking incidents, fraudulent actions and inadequate recovery capabilities.
So, yes, there is ‘adoption angst’ and ‘security scare’. But then, the good news is, that with increasingly sophisticated risk management methods, thorough central bank regulatory frameworks, and a technology-mature leadership at banks, these risks are not so scary, that they are not being systematically addressed.
In banks, ‘management information’ demand, hitherto, was internal – driven by bank’s top management, regulators and finance ministry and compliance are still being seen as country specific. In the recent past, however, the context has changed. Emphasis on real profitability, corporate governance imperatives, and Basel 3/4 stipulations has changed the landscape of ‘drivers’ of IT. The ‘information’ demand is no longer confined to ‘internal’ groups. The public at large, global analysts, global fiscal and regulatory communities are important consumers of ‘information.’ And the rigor of information management is getting stricter by the day.
And it is in the rigor of information that most banks find them-selves in sticky ground. For instance, some of the best banks, with state of art Risk-Management software solutions, often run into implementation bottlenecks because of the bad state of data, resulting in inadequate fiscal discipline with respect to capital adequacies, and consequential problems.
So what is the general state of “Information Management” in banks?
Until now, the “I” part of “IT” has not been recognized as a core function in Banks. Banks primarily drives the “T” part of “IT” and the “I” part floats between many different software systems and transactional needs of different silos of the bank.
In most banks, especially who have modernized their core banking systems, the foundation has been laid. This has to be built upon. Asset Liability management, customer experience management, KYC, AML and such imperatives have underpinned the need for powerful information management systems. A lot of churning of data has to be done across all manners of boundaries, for requirements ranging from operational to strategic, business driven to regulatory. Data mining and real time analytics have become key. Operational efficiencies have to be increased much more. Work should not flow, all round digitization should enable real time decision support, and management dashboards have to bring new power to operations, and “Information Management” has to become the key engine for driving the business. And the CIO, along with the CEO, have the opportunity to make this happen.
As IT takes more control of assets, i.e information assets, it becomes increasingly important to structure proper governance that will ensure:
A Single View of Truth – Accurate, consistent and timely informa-tion to management and user community
Robust, scalable, secured and flexible Infrastructure and Systems with high quality, performance, reduced time to market
Highly available systems and Infrastructure (Network, Storage, Computing Power, Software Products)
Identify Risk associated with Internal IT services and establish mitigation plan
Tested ‘Disaster Recovery’ site, ‘Business Continuity’, Security Monitoring and Management
Technology is the enabler of business and growth. The growth is aimed at all levels of the society. Technology brings convenience, quick and better liquidity that fuels growth. The growth brings in additional demands and technology enables new products to roll out. The ecosystem funnels itself and drives the overall growth and improves the quality of life.
Read more for perspectives on a blueprint for a centralized ‘Information Management’ function.