IBM supports the foundation of an Islamic Bank in Saudi Arabia. Islamic Banki… · 2 1st IIR...

IBM Global Business Services

© Copyright IBM Corporation 2008

IBM supports the foundation of an Islamic Bank in Saudi Arabia

Frankfurt, Nov 5th, 2008

Dr. Paul-Gerhard Haase – IBM Deutschland GmbHChristopher Kalbhenn – IBM Deutschland GmbH

Kingdom of Saudi Arabia

1st IIR Islamic Finance & Real Estate Forum | November 5, 20081



1. The Saudi Banking Market

§ Islamic Banking – a dynamic growth play

2. Foundation of a new bank

§ Strategy

§ Products & Services

§ Operating Model

3. IBM Engagement

§ Business Model Framework & Process Reference Model

§ System Integration

4. Lessons Learnt




§ Strategy


§ Operating Model

3. IBM Engagement



4. Lessons Learnt




There is a strong demand for Shari‘ah compliant banking services in the Saudi market,…

Saudi Arabian Banking Market

Note: Based on opinions of Saudi nationals only (no expatriates). Source: Results from market research, Booz Allen analysis

37,9%9,9%

16,9%

35,3%

Only Islamic

Islamic, if allfactors equal

Islamic, if price is lower

Onlyconventional

Islamic Banking Affinity(Saudi Nationals Only)

CommentsComments

§ About two thirds (64.7%) of Saudi nationals have a preference for purchasing Shari’ah compliant products

§ Within the above population, 16.9% would only purchase Shari’ah compliant products regardless of price, conditions, etc.

§ In the main, most customers will not purchase Shari’ah compliant products if this puts them at a competitive disadvantage vs. conventional products

§ About two thirds (64.7%) of Saudi nationals have a preference for purchasing Shari’ah compliant products

§ Within the above population, 16.9% would only purchase Shari’ah compliant products regardless of price, conditions, etc.

§ In the main, most customers will not purchase Shari’ah compliant products if this puts them at a competitive disadvantage vs. conventional products




… but banks have to prove that they adhere to Shari‘ah principles implying the need to invest in educating customers

19,0%29,5%

34,0%

Evaluation Of Shari’ah Conformity(Saudi Customers Only)

Knowledge About Islamic Banking

100100100

Indifferent

28,4%8,4%

62,1%

20,1%

60,9%

§ Islamic banks in Saudi Arabia need to make clear that their products and processes are Shari‘ah compliant

§ Proof or certification of Shari‘ah compliance is important

§ Only about a third (37.6%) of Saudis agree that a bank should be able to sell both Islamic and conventional products

25%

(Very) Poor

(Very) Good

Neither Nor

20%

55%

§ Only 55% of all customers have a sound knowledge of Islamic banking

§ Given that interviewees typically overstate their response to this question, it can be assumed with reasonable certainty that the level of understanding of Islamic banking in the Kingdom is fairly low

§ Consequently, the bank will need to invest in educating its target customers on both the nature and benefits of Islamic banking

Source: Results from market research, Booz Allen analysisc

37,6%

(Fully) Disagree

(Fully) Agree

Ability to Sell Conventional

Products

Bank Needs toProve

Conformity

BankStatement Sufficient




The Shari‘ah Law imposes a set of principles on Islamic Banking resulting in particular challenges within the bank

Prohibition of ContractualUncertainty

and Speculation(GHARAR)

Risk focusedpricing of all

banking productsis required due to

the Islamic Contract

Ban onInterest Charge

(RIBA)

Requiringcontinuous Shari‘ah

Compliancemonitoring and

auditing bythe bank‘s Shari‘ah

supervisoryrepresentatives

Shari‘ahapprovals

required duringprocess &

product design

Social and Ethic Preclusions regardingthe funding of an Islamic Bank

- esp. no investments in/ financing frompork trading, alcohol industry, etc. -

(HARAM)Prohibition of Gambling

(MAYSIR, QUIMAR)

Imposing specificrisks regardingTreasury of anIslamic Bank

Islamic Banking Principles ...

... result in specific challenges

Resulting in high demands regarding reporting and monitoring capabilities particularly regardingprocesses, systems and people.




On royal decree the bank was founded in late 2006 with an successful IPO in 2008 and a proposed market launch early 2009

Vision:

To be your preferred financial partner.

Mission:

To provide our partners with total Shari'ah-compliant financial solutions through the best workplace to sustainably grow and serve our community.

The bank’s 3 founding shareholders are § Public Investment Fund (PIF)

§ Public Pension Agency (PPA)

§ General Organization for Social Insurance (GOSI)Together they represent 30% of the bank’s capital, or SAR 4.5 bn, with equal shares. The remaining 70% of the bank’s capital of SAR 15 bn is publicly held. Bank is deemed to be essential part of the KSA initiative for economic growth







§ Strategy


§ Operating Model

3. IBM Engagement



4. Lessons Learnt




§ Strategy


§ Operating Model

3. IBM Engagement



4. Lessons Learnt




A growth strategy, best in class technology and Shari‘ahcompliance are the cornerstones of the bank to become the world‘sleading Islamic Bank

§ Efficient customer acquisition and migration at large scale§ Grand entry§ Retail, Corporate & Investment

Banking§ Superior customer service§ Efficient and accessible service§ Reach new customer segments

(Youth & Low Paid Workers)§ Customer focused workforce§ Leadership in product development

(Speed to Market)

§ Shari'ah compliance§ Customer service§ New concepts of branch banking§ Efficient business process § Partnership (Co-branding) that adds

“Big Value”§ Strong Customer Relationship

Management§ Behavioral monitoring at

contact points§ Delivery channel collaboration

Market Growth Strategy Strategy Differentiators




Proposed Corporate Banking Product Scope

List is not deemed to be comprehensive

§ General Contract§ Checking Account / Investment Account (restricted / unrestricted Mudaraba)§ Transfers & Transaction (SWIFT, SARIE, SADAD, Payables Mgt, FX….)§ Islamic Trade Finance

• LC Musharaka / Murabaha• Import Documents Finance

• Islamic Investment Products• Sukuk Musharaka / Ijarah / Bai Salam

• Islamic Financing Products• Deferred Sales (Tawquer)• Ijarah with ownership• Local Mudaraba / Murabaha• Istisna’a & Parallel Istisna’a• Syndicated loans (Musharaka / Ijarah)

• Joint Guarantee (Takaful) / Benevolent Loan (Qard Hasan)





Proposed Retail Banking Product Scope

§ General Contract§ Checking Account / Investment Account § Transfers & Transaction (bill payments, standing order, FX, Payroll)§ Personal Finance

• Global Limit• Auto Finance Murabaha & Ijarah• Stocks Finance Murabaha• Goods & Service Murabaha• Real Estate Murabaha & Ijarah

• Cards• Charge card / Direct card• Secure card / Prepaid card• Corporate card

• Safe Deposit• POS





Proposed Treasury Product Scope

§ Commodity Murabaha (with SAMA & Other Banks)

§ Placement on Mudaraba Basis

§ Investment in Shari’ah Compliant Funds • (asset classes: real estate, private equity, liquidity fund,

equity fund, commodity fund)§ Investment in Shari’ah Compliant Sukuk

• Trade contracts (Murabaha, Bai Salam, Istisna’a)• Equity contracts (Musharaka, Mudaraba)• Rental contracts (Ijarah, Diminishing Musharaka)

§ Wakala-tul-Istismar Basis§

Currency Swaps – (On Qard Basis)





for each segment

The Customer Engagement Model and proposition for each segment define how the bank will engage with those customers

Retail Customers

PROPOSITION

PROPOSITION

PROPOSITION

PROPOSITION

PROPOSITION

Segment Manager

Segment Manager

Segment Manager

Segment Manager

Segment Manager

ChannelManager

ChannelManager

ChannelManager

ChannelManager

Product Manager

Product Manager

Product Manager

Product Manager

Salaried Employees

Ladies

•Sales Targets•Activity Plans•Campaigns

Middle Market

Business Banking

Corporate Customers

Students

Branch

BANK

Fax

ReadyCash

ATM

Self Service Relationship

Managers

MeeterGreeter

Mobile, SMS & PDA

IVR

Remote channels

MailA. R. Jamieson, Esq.,

47 Abberley Road,

Brompton Heath,

BL72 9PE.

(Agent

ReadyCash

Offsite ATM e-mail

Teller

Integrated Distribution

Internet

• Sales Targets• Activity Plans• Campaigns

Agency







§ Strategy


§ Operating Model

3. IBM Engagement



4. Lessons Learnt




§ Strategy


§ Operating Model

3. IBM Engagement



4. Lessons Learnt




IBM’s initial proposal covered the whole scope of the Business & IT Architectures in two phases: ‘Strategy’ and ‘Design & Architecture’

1.2 Business Unit Strategy**

4.1 IT Service & Organization Design

4.3 Infrastructure Architecture

Retail Banking

Corporate BankingInvestment Banking

Bus

ines

sIT 4.2 Application Architecture

Impl

emen

tatio

n R

oadm

ap

Impl

emen

tatio

n P

rogr

am*3.2 Supporting Units

3.3 Org Design3.1 Banking Operations & Process Design

Strategy Design & Architecture

Service Management

Solution and Infrastructure Management

Solutions Management

IS Management

ProgramManagement

Infrastructure Management

DevelopmentEngineering

Production

MaintenanceSupport

IT S

upp

lier M

an

ag

em

ent

Release M gmt

Change Mgmt

Service Lev elMgmt

Configuration Mgm t

Capac ity Mgmt

Cost Mgmt

Qual ity Risk Mgmt

Pro ject Management

Pro ject Office & Methods

Strategy Management Control ling ProcurementReporting

Security Mgmt

IT Service Continui ty M gmt

CAMS IIApps

CAMS IIApps

CAREApps

CAREApps

Fraud Solutions

Fraud Solutions

MerchantsApps

MerchantsApps

Cl ientApps

Cl ientApps

DataWare-hs

DataWare-hs

Incident Mgmt/ Service Desk

Problem Mgm t

Availab il i ty M gmt

Ski l ls & Resourc eMgm t

Architectu re Management

Data Arc hi tecture M gmt

Appl ic ations Arc hi tecture Mgm t

Infras tructure Arch itec ture Mgm t

IT C

usto

me

r M

an

ag

em

en

t

In terface M iddle-ware

Data-base

Work-p lace

AS/400Oper.Sy stem

Server Voic e LAN/ WAN

InterfaceInterface M iddle-ware

M iddle-ware

Data-baseData-base

Work-p laceWork-p lace

AS/400AS/400Oper.Sy stemOper.

Sy stemServerServer Voic eVoic e LAN/

WANLAN/ WAN

CorporateAppl ic.

Retai lAppl ic .

Inv est.Applic.

Back off.Appl ic .

Service Execution

A 6 1

Event Management

A 62

Incident Management

A 6 3

Problem Management

A 64

Lo g ge dE ve n t

Resolved Incident

Incident

OperationalMonitoring Data

Event ResolutionDirective

Change Management

A 5 1

P r o bl em s a ndK n o w n E r r o r s

IncidentInformation

RFC

DeployedSolution

Function1

Function2

Function3

Operating Model Process ModelPhysical Model


2. D

esig

n Pr

inci

ples

Sample Organization

Organization Model

IT Reference Model IT Service Framework IT Process Model Sample Organization

1.1 Business Model Framework (CBM)

1.3 IT Strategy

*Out of scope

Value per customer

Service

Price sensit ivity

Traditional Barclays Target Segment

Broaden out into two fundamentally different segments

that require different delivery

models

Key char acter istics:High volumesTechnologyCost effect ivenessTransact ional bankingNon- banking productsGeogr aphic coverage

Key characterist ics:People dependantProduct diversityCredit extension (mortgages, ABF, Consumer lending/ credit cards)InvestmentsNon-banking productsDoes not require extensive coverage

Consumer Finance

Affluent

M ass market

Value per customer

Service

Price sensit ivity




models



Consumer Finance

Affluent

M ass market




Based on IBM’s proposal, the scope was decomposed into 5 separate work streams

1.2 Business Unit Strategy**

4.1 IT Service & Organization Design

4.3 Infrastructure Architecture

Retail Banking

Corporate BankingInvestment Banking

Bus

ines

sIT 4.2 Application Architecture

Impl

emen

tatio

n R

oadm

ap

Impl

emen

tatio

n P

rogr

am*3.2 Supporting Units

3.3 Org Design3.1 Banking Operations & Process Design

Strategy Design & Architecture

Service Management

Solution and Infrastructure Management

Solutions Management

IS Management

ProgramManagement

Infrastructure Management

DevelopmentEngineering

Production

MaintenanceSupport

IT S

upp

lier M

an

ag

em

ent

Release M gmt

Change Mgmt

Service Lev elMgmt

Configuration Mgm t

Capac ity Mgmt

Cost Mgmt

Qual ity Risk Mgmt

Pro ject Management

Pro ject Office & Methods

Strategy Management Control ling ProcurementReporting

Security Mgmt

IT Service Continui ty M gmt

CAMS IIApps

CAMS IIApps

CAREApps

CAREApps

Fraud Solutions

Fraud Solutions

MerchantsApps

MerchantsApps

Cl ientApps

Cl ientApps

DataWare-hs

DataWare-hs

Incident Mgmt/ Service Desk

Problem Mgm t

Availab il i ty M gmt

Ski l ls & Resourc eMgm t

Architectu re Management

Data Arc hi tecture M gmt

Appl ic ations Arc hi tecture Mgm t

Infras tructure Arch itec ture Mgm t

IT C

usto

me

r M

an

ag

em

en

t

In terface M iddle-ware

Data-base

Work-p lace

AS/400Oper.Sy stem

Server Voic e LAN/ WAN

InterfaceInterface M iddle-ware

M iddle-ware

Data-baseData-base

Work-p laceWork-p lace

AS/400AS/400Oper.Sy stemOper.

Sy stemServerServer Voic eVoic e LAN/

WANLAN/ WAN

CorporateAppl ic.

Retai lAppl ic .

Inv est.Applic.

Back off.Appl ic .

Service Execution

A 6 1

Event Management

A 62

Incident Management

A 6 3

Problem Management

A 64

Lo g ge dE ve n t

Resolved Incident

Incident

OperationalMonitoring Data

Event ResolutionDirective

Change Management

A 5 1

P r o bl em s a ndK n o w n E r r o r s

IncidentInformation

RFC

DeployedSolution

Function1

Function2

Function3



2. D

esig

n Pr

inci

ples

Sample Organization

Organization Model

IT Reference Model IT Service Framework IT Process Model Sample Organization

1.1 Business Model Framework (CBM)

1.3 IT Strategy

*Out of scope

Value per customer

Service

Price sensit ivity




models



Consumer Finance

Affluent

M ass market

Value per customer

Service

Price sensit ivity




models



Consumer Finance

Affluent

M ass market

AB C

D

E

B

**Assumption is, that Al Inma Bank Business strategy is already done

Core Business ProcessesOperations Strategy & Operations Business UnitOrganizational structureIT StrategyIT ArchitectureE

A

B

CD




Why IBM? We were the only supplier able to propose for all elements

§ IBM proposed for all subscribed projects:

§ A - Core Business Processes: IBM Information Framework for Banking

§ B - Operations Strategy and Ops BU: Component Business Modelling

§ C - Organizational Structure: IBM Organizational Design Methodology

§ D - IT Strategy: IBM IT Strategy Framework

§ E - IT Architecture: Enterprise Architecture Methods and Framework

§ IBM’s strong asset based approach along with our industry knowhow and delivery capabilities were decisively for winning the streams A and B and the System Integration

Banking Data Warehouse

IFW Object Models

Critical Business Processes

IFW Foundation Models

Financial Services Data Model

Financial Services Function Model

Financial Services Workflow Model

Business Solution Templates

Banking Data Warehouse Model

Financial Services Business Object Model

Financial Services Interface Design Model

Generators

IFW Process Models

Business

Technology

Components

Sa le s & se rv ic e

O ut b ou n d te l

S a le s & s e rv ic e

O ut bo u n d tel

He lp d e sk S al es & s er v ice

O ut b ou n d te l


O ut bo u n d tel

O ut bo u n d tel


O ut bo u n d te l

O ut bo u n d te l

Ou tb o u nd t el


O ut b ou n d te l


O ut bo u n d tel

S al es & s er vi ce

O u tb o un d t el

O u tb o un d t el

S ale s & s erv ic e

O u tb ou n d te l

O u tb ou n d te l

S ale s & s er vi ce

O u tb o un d te l

O u tb o un d te l


O u tb o un d te l


O u tb ou n d te l

S a les & s e rv ice

Ou t bo u nd t el

Ou t bo u nd t el

Components


O ut b ou n d te l


O ut bo u n d tel


O ut b ou n d te l


O ut bo u n d tel

O ut bo u n d tel


O ut bo u n d te l

O ut bo u n d te l

Ou tb o u nd t el


O ut b ou n d te l


O ut bo u n d tel


O u tb o un d t el

O u tb o un d t el


O u tb ou n d te l

O u tb ou n d te l


O u tb o un d te l

O u tb o un d te l


O u tb o un d te l


O u tb ou n d te l


Ou t bo u nd t el

Ou t bo u nd t el


O ut b ou n d te l


O ut bo u n d tel


O ut b ou n d te l


O ut bo u n d tel

O ut bo u n d tel


O ut bo u n d te l

O ut bo u n d te l

Ou tb o u nd t el


O ut b ou n d te l


O ut bo u n d tel


O u tb o un d t el

O u tb o un d t el


O u tb ou n d te l

O u tb ou n d te l


O u tb o un d te l

O u tb o un d te l


O u tb o un d te l


O u tb ou n d te l


Ou t bo u nd t el

Ou t bo u nd t el

Processes

4.1 Id en tify P ros pe ct4.2 R egi ste r P ro spe ct 4.3 Es ta bli sh and Mai nta in

C ust om er Pr ofi le4.4 Man ag e c am pa ign s4.5 Mon ito r a nd m ana ge cu sto m er

pe rfo rm an ce

5 .1 Ma na ge Cu sto m er Inv ok ed Co m m5 .2 Ma na ge Co m pan y Dr ive n C om m

5 .3 D e fin e/A gr ee Cu st om er Fin an cia l Pl an

5 .4 D e ter mi ne Op tio ns5 .5 C o lle ct a pp lic ati on In for ma tio n5 .6 P ro vi de Qu ote /I llu stra tio n5 .7 A ss es s R isk5 .8 F in ali se an d A gr ee Ar ran ge m ent5 .9 Ma na ge Po rtf oli o H ol din gs5 .10 R evi ew pe rf orm a nce ag ai nst

cu sto me r p la n5 .11 Man ag e E nq uir y5 .12 Mod ify C ust om er D ata5 .13 H an dle cu sto m er com p lai nt o r

co mp lim en t

4 -E st ab lis h a nd D ev elo p Cu st om er R ela tio ns hip

3.1 A na ly se an d P rio rit ise Mark et s3.2 D ev el op Pr op osi tio n3.3 Ma na ge Pr opo sit io ns3.4 Man ag e B ra nd ing3.5 C rea te an d Ma na ge Ch an ne l

C o nte nt

3 - Ma n age Mar ke ts 5 - Se rv ice C us tom e r R el ati on shi p

7 -Ma nag e Re so urc es

8 -Mo nit or & Man ag e B usi ne ss Pe rfo rm an ce

8. 3 Ma na ge Fi nan ci al Pe rfo rm an ce

8 .4 Mana ge R egu la tor y R ep ort ing a nd Co nt rol s

7 .1 Man ag e H um a n R es ou rce s

8. 9 Ma na ge Se cu rity

1 -C re ate & Man ag e Bu sin es s S tra te gy

1.1 D ef ine B us ine ss Co nc ep ts & Org an isa tio na l S tra teg y

1. 3 D eve lop V is ion & St rat eg y (G oa ls & O b jec tiv es)

1. 2 D eve lo p We alth Man ag em en t Bu si nes s P la ns

1.4 Mo nit or Ex ter na l E nv iro nm en t

1.5 Mo ni tor , C on tro l & A dju st ( Go al s, P lan s & Pe rfo rm an ce)

8 .1 De ve lop an d Man ag e S co rec ar ds

8.1 1 Id en tif y Im pro ve me nt s

10 - Man age E xt ern al R ela tio ns hip s

1 0.1 B uil d & Ma nag e S er vi ce P rov id er/ Pa rtn er Re lati on sh ips

10. 2 Ma na ge St ak eho ld er Co mm u nic ati on s

10 .3 Mana ge P ubl ic Re lat ion s

7.3 D eve lo p a nd Man ag e I nfo rm at ion Te chn ol og y

8. 2 Be nch m ark Pe rfo rm an ce

8.8 Ma na ge Co mp lia nc e an d L eg al sup po rt

6 .1 A cti vat e p ro duc t/s er vic e6 .2 Pr ov ide A cc oun t/P ro du ct

Mai nte na nc e6 .3 Pr ov ide b rok era ge /tr ad e se rv ice s6 .4 Pr ov ide P ort fol io Ma in ten an ce6 .5 Is sue F ina nc ial In stru m ent s6 .6 Pr ov ide S pec ial ist Se rv ice s6 .7 H an dle Ca sh D istr ib uti on6 .8 H an dle Mon ey tra ns mi ssio n6 .9 H an dle Cr ed it

s ettl em en t/d raw d ow n6 .1 0 H a ndl e b ad de bt6 .1 1 H a ndl e f rau d6 .1 2 P re par e a nd Man ag e

C on su ma ble s6 .1 3 H a ndl e L os t a nd St ole n I tem s

2 -A c qu ire an d Man ag e F un ds an d Tr eas ur y

2 .1 Ra ise Fu nd s 2 .2 Man age L iqu id ity

7.2 S et up an d Ma int ain In fra str uct ur e

8 .7 Man age R isk 8 .10 D ev elo p a nd Man ag e P roc es s D oc um en ta tio n

8 .6 S et u p an d Ma nag e Ser vic e L ev el Ag re em en ts (SL A s)

9 -Ma na ge Ch an ge9 .1 De ve lop

S olu ti on/ Bu sin es s C as e

9 .3 Man age

I mp le me nta tio n

9 .4 Tr ac k a nd Man age

E xc ep tio ns

9.2 P lan an d S ta rt

Pro je ct

9.5 C om pl ete an d

Re vie w

6 .14 H an dle C laim6 .15 A dm in ist er C u sto me r

D ocu m en tati on , S ecu ri ty, C olla te ral & Cu sto dy

6 .16 G en era te Cu sto m er St ate me nt s & re po rts

6 .17 Man ag e C om m iss io ns6 .18 A dm in ist er A ss et6 .19 T erm in at e cu st om er

ar ran ge me nt

6 .Pr od uc t a nd S erv ic e P ro ces sin g

2 .3 Ma na ge A sse t L iab ili ty Ma na ge me nt 2.4 Man ag e A L M Ri sk

8 .1 2 Mana ge D isa ste r R ec ov ery & C on tin ge ncy P lan ni ng

8. 5 De fin e & Ma nag e Ac co un tin g P ro ce dur es

7 .4 Man age P roc ur em en t



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IBM ’s Weal th Management proc ess m odel provides a fram ework for identi fy ing at whic h leve l o f the organis ation proces ses are c ar ried out

G lo b a l R e g io n a l L o c a l

Processes



pe rfo rm an ce





co mp lim en t



C o nte nt


































9 .3 Man age



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IBM ’s Weal th Management proc ess m odel provides a fram ework for identi fy ing at whic h leve l o f the organis ation proces ses are c ar ried out

G lo b a l R e g io n a l L o c a l

Assets & Locations

People/Organization

Regi onal Servi cing

LocalRelat i onship Management

O v e ra ll c o mp a n y p e r fo r ma n c e

B u s in e s s S tr a te g y

S ta n d a rd P ro d u c t d e si g nC or p o r at e G o v e r na n c e

S e r v ic in g p e rf or ma n c e

S e r v ic in g c o stR eg u l at o r y c o n tr o ls

B 2 B re la t io n s h ip s

R e ve n u e p e r fo r ma n c e

In t ro d u c e r r el a ti on s h i p sC u s t o me r M a n a g e me n t

A g r e e d c o u n tr y v a ri at io n s

C o un t r y re g u l at o ry co n t r ol s

Gl obal Di re cti on & Oversight

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O v e ra ll c o mp a n y p e r fo r ma n c e

B u s in e s s S tr a te g y

S ta n d a rd P ro d u c t d e si g nC or p o r at e G o v e r na n c e

S e r v ic in g p e rf or ma n c e

S e r v ic in g c o stR eg u l at o r y c o n tr o ls

B 2 B re la t io n s h ip s

R e ve n u e p e r fo r ma n c e

In t ro d u c e r r el a ti on s h i p sC u s t o me r M a n a g e me n t

A g r e e d c o u n tr y v a ri at io n s

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Eu rope• Net herl ands• France• German y• It al y

Eu rope• Net herlands• France• Germany• It al y

S.E . Asia• Singapo re

S. E. Asi a• Singapo re

Americas• Mi ami• Brazil


Eu rope• Net herl ands• France• German y• It al y

Eu rope• Net herlands• France• Germany• It al y

S.E . Asia• Singapo re

S. E. Asi a• Singapo re



Sourcing & Alliances

S tra teg y & Ins ig ht

O ffe rin g Sa les & Se rvi ce

Ris k & F in . Mg m t

Su pp or t se rvi ce s

P roc es si ng Ke y t o c ol o ur -c o d in g :

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Finan cial Custom er

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Employee s atisfac tionFeedback on LeadershipSki l ls and training developm entCross-func tional teaming

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P ro p o s it io n sS e g me n ts

Target Operating Model

IT Infrastructure ModelIT Application ModelIT Services Model

I BM C o n fid en ti al | 2 -A u g- 053 7

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A

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IT C ostsIT Co st s

IT Investm entsIT Investm ents

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Infrastructure ArchitectureInfrastructure Architecture

Enterprise Capabilities

Application ArchitectureApplication Architecture

Business Event List

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IT NodesIT

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Business Activity Mdl Business

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Technology Reference Architectures

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Deployment Unit Matr ices

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Pr od uce r C o mp en sa tionC lai ma nt C la im B us ine ss P artn er sP rod uc erSe rvi ce Pr ov ide rs

Po lic y F in anc ial sIn sur ed O bje cts In su ran ce P rod uc tP olic y

Tra in ing , E du cat ion , A dv iceT hir d P art ies Inq uir iesLe ga l & Re co ve ry Ac tion sE xte rn al A g enc ie s

C lai m

Sp on so rin g O rg an iza tio nMa rk et Pr osp ec tsIn sur ed Pa rt yBu sin es s P lan s

Inf o O bject s

BusinessArchitecture

ITArchitecture

InfrastructureArchitecture

Enterprise Architecture Framework

Applications

Users

Data

P O LIC Y




C lai m


Inf o O bject s

P O LIC Y




C lai m


Inf o O bject s

P O LIC Y




C lai m


Inf o O bject s

P O LIC Y




C lai m


Inf o O bject s


ITArchitecture


Enterprise Architecture Framework

Applications

Users

Func

tiona

l vie

w

User

vie

w

Dat

a vi

ew

Func

tiona

l vie

w

User

vie

w

Dat

a vi

ew


ApplicationArchitecture


IFW CBM & TOM SPORTS IT ArchitectureFramework

EA Framework




Challenging Objectives for the ‘System Integration’

Provide a sound architectural solution

Provide a quality “Day 1” solution to accomplish the Line of Business Service Models

Manage all SI related activities

Manage a smooth deployment and controlled Soft Launch

Manage a smooth transition to operations taking into account

a) People b) Systemsc) Organizational aspects

Provide and coordinate Organizational Change Management to ensure operational skills in both quality and quantity




In addition to the business driven verticals and the PMO we need to run horizontal projects to ensure quality and compliance with the bank’s business and architectural requirements

Call Center / CRMCorporateFunctions

Corporate BankingTreasury

Retail Banking /Payments

ElectronicChannels

Branch / CRM

Program Management / SI Team PMO

BusinessRequirements &

Processes

Technical PMO(Part of IBM PMO)

PM PM PM PM PM PM

ChangeManagement Define, plan, guide and advise on aspects of organization, HR and Training

Refine current business requirements & business process model with respect to implementation needs

Review current architecture model, integration and implementation standards.Guide and advise on architecture, integration and implementation activities

Deployment Planning

Plan, guide and advise on deployment and transition activities to ensure a successful GoLive

SystemTesting

Define, plan, guide and advise on test cycles (especially integration testing, user acceptance testing)

Operational Readiness

Define, plan, guide and advise on activities around the operational readiness of the Bank for the Soft Launch




Goal Directed Approach in Business Process and Operational Procedures Modeling

Requirement list and documentation FunctionalGaps

Delta

Analysis

Deduct “Day1”Operational ProceduresFind overall agreement

Documentation of confirmed§ Business Processes§ Functional Gaps§ Prioritization

Implementation Plan

Workshops

Process Reference Model/ CBM

Sup port ServicesF aci li t ie s

O p er at i on &M ai nt en an ce

Sys te m sD eve lo pm en t &

O pe r at io ns

H e lp D es kS er vi ce s

H u m an R es our ce M an age m en t

Pr o cur e m ent

Risk

& Finan

cial Man

agem

ent

P or t fo li o R is kM a nag em e nt

F in anc in g Pr o ced ur es ,

Po li cy & Pl an nin g

A sse t &Li abi l it y Po li cy& Pl an ni ng

R is k

Tr ea sur y M a nag em e nt

F in anc ia l C ont r ol& C o nso li da ti on

Fi n anc e

F in anc eP ol ic ie s

Fi xedA ss et R eg is te r

A cco un ti ngG en er al L ed ger

P er f or m a nce M a nag em e nt &

R ep or t in g

P roposition

Leg al

B us in essP ol ic ie s &

P r oce dur e s

I nt er na l A udi t & C om p li anc e

C o mp li an ce

Sh ar i’ ah C o nt r ol

B r an d M an age m en tC a m pai gnP la nni ng &

M an ag em en t

C a m pai gnEx ecu ti on

Pu bl icR e la ti on s

Market DevelopmentP r op osi ti onPl an ni ng &

M a nag em e nt

Se gm e nt M a na gem e nt

Customer Development Proposition Development

P r od uct C at al ogu e

C han ne l P lan ni ng & De vel op m en t

Pr od uctD e vel op m ent &

M ana ge m ent

C ust om e r S er vi ce D if f er en ti at i on

Stra

tegy

& In

sigh

t

S t ra t eg y &G o vern an ce

A cq ui sit i on s & A ll i anc es

B usi ne ss S tr a te gy& P l an nin g

Bu sin ess & ITAr ch it ec tu r e

S har i ’a h Po li cy

St r at eg ic C ha nge G o ver n anc e

Co nt act /Ev en t H is to ry

C ust om e rI nf or m at i on

M an ag em en t

C ust om e rA nal ys is & M o de ls

Cu st om er & M a r ketR ese ar ch

C us t ome r & M ark et In si gh t

D ist ribution

Co r re spo nd ent B an ki ng

R e la ti on shi p M gm t

C u st om erR i sk A sses sm en t

D is tr i but i onP l ann in g

C ha nne l M g m t & D is tr i but i on

P er f or m an ce

R is k Ass et St r uc tu r in g

T r ad e Se r vic es S up po r t

M anagement

R el at io nsh ip D ev el op m ent &

M ana ge m ent

Sa le s

Sa le s

Tr a nsa ct io nC apt ur e S er vi ce s

S er vi ci ng

Se rvi ci ng Di st r i bu t io n S up po rt

S eg m en tAn al ysi s

P rocessing

St at e m ent s & C or r esp on den ce

A pp li cat i onP r oce ssi ng

C a rd - Sp eci f icPr o cess in g

C ust om e rFu lf i lm e nt

C ol le ct io ns & R em e dia l

M an ag em en t

M er ch antO per a ti on s

Tr e asu ry B ac k Of f ic e & C ust o dy

T r ade Se rv ice s & Fi na nce S pe cif i c

Pr o cess in g

C a sh M an age m en t

Sp ec if i c

B i ll in gIn ves tm e nt A ss et M an ag em en t

Cu st om e r &P ro du ct

M a in te nan ce

Do cum e ntM an ag em en t

& A r chi ve

T r an sac ti onExe cut i on

Pa ym en ts

Re con ci li at io ns

C he que P r oc essi ng

C ashIn ven t or y

Tra ns act i on s

P ayr ol l S er vi ce s

C omm on

O pe r at io ns P la nni ng &

Pe rf o rm a nce M gm t

R e fe r enc e Da ta M an ag em en t

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27 28

29

30

31

32

33

34

35

36

37

38

39 40

41

42

43

44

45

46

47

48

49

50

51

52

53

54

55

56

57

58

59

60

61

62

6364 65 66 67 68 69

Vendor Functionality“Package Solution”Requirements

discoveryand

analysis

Requirementscollection &

documentation

Validation andconfirmation ofrequirements

RequirementChangeControl

Requirementsauditability

andtraceability

Service ModelFront Office

OperatingBack Office Model

Description of requirements Scope Priority Component Core Analytical Area

Driver: An own prognoses system is necessary to improve car estimations (Restwerte…)

Global High Risk Controlling

Residual ValueDriver: Customer Acquisition Process –Al Inma Global ID needs to be assigned

CRM Customer Data

Operational Manual

- to be developed -- to be completed& validated -

Operational Procedures Manual ”Day 1”Solution Design -time and effort estimation




Starting from Bank’s value chain, we structured and modeled business processes end to end 1/2

2 Sales management

3 Customer Acquisition

5 Servicing

4Transacting

6 Closing

7. Support processes

0 Business Strategy

1 Product Development

L0

L1

L3

Partner Registration Personal FinanceAccount Opening

Register Individual Register POS

Provide productcatalogue

Generate AlinmaID Select product

L2

L4

Register Government

Agency

Register CharityOrganization

Register Embassy/ Foreign entity

Register Corporate

e.g. „Scan Documents“

illustrative







§ Strategy


§ Operating Model

3. IBM Engagement



4. Lessons Learnt




§ Strategy


§ Operating Model

3. IBM Engagement



4. Lessons Learnt




Lessons Learnt

§ Active of involvement of Shari’ah board § Shari’ah approvals can be time consuming§ Contract driven vs. conventional (product driven) thinking

§ Be very clear in Program Governance from Day 1§ Don’t expect easy deliverables sign-off

§ Precise management of scope is essential§ Plan plenty of contingency

§ Don’t underestimate hierarchies§ Communicate, Communicate & Communicate§ Expect dramatic slow down during Ramadan§ Staffing & VISA processes can be a challenge




Contacts

Dr. Paul-Gerhard Haase

IBM Global Business ServicesIntegrated Banking Team NE IOT

IBM Deutschland GmbHLaatzener Str. 130539 Hannover

Phone : +49 (0) 171-558 [email protected]

Senior Managing ConsultantChristopher Kalbhenn

IBM Global Business ServicesFinancial Services – BankingFinance & Risk Management

IBM Deutschland GmbHBeim Strohhause 1720097 Hamburg

Phone : +49 (0) 160-886 [email protected]

Senior Managing Consultant

mailto:[email protected]

mailto:[email protected]




BackupBackup




Proposed Application Architecture for Day 1

TemenosT24ACI OracleIBM

WebSphere Avaya Sybase IBBespokeDevelopment

Sterci andothers ARC Documentum

ECM

BO FSDM




Support ServicesFacilities

Operation &Maintenance

SystemsDevelopment &

OperationsHelp DeskServices

Human Resource Management Procurement

Ris

k &

Fina

ncia

l Man

agem

ent

Portfolio RiskManagement

Financing Procedures,

Policy & Planning

Asset &Liability Policy

& Planning

Risk

Treasury Management

Financial Control& Consolidation

Finance

FinancePolicies

FixedAsset Register

AccountingGeneral Ledger

Performance Management &

Reporting

Proposition

Legal

BusinessPolicies &

Procedures

Internal Audit & Compliance

Compliance

Shari’ah Control

Brand ManagementCampaignPlanning &

Management

CampaignExecution

PublicRelations

Market Development

PropositionPlanning &

Management Segment

Management

Customer Development Proposition Development

Product Catalogue

Channel Planning & Development

ProductDevelopment & Management

Customer Service Differentiation

Stra

tegy

& In

sigh

t

Strategy &Governance

Acquisitions & Alliances

Business Strategy& Planning

Business & ITArchitecture

Shari’ah Policy

Strategic Change Governance

Contact/Event History

CustomerInformation

Management

CustomerAnalysis & Models

Customer & MarketResearch

Customer & Market Insight

Distribution

Correspondent Banking

Relationship Mgmt

CustomerRisk Assessment

DistributionPlanning

Channel Mgmt & Distribution

PerformanceRisk Asset Structuring

Trade Services Support

Management

Relationship Development & Management

Sales

Sales

TransactionCapture Services

Servicing

Servicing Distribution Support

Processing

Statements & Correspondence

ApplicationProcessing

Card-SpecificProcessing

CustomerFulfilment

Collections & Remedial

Management

Operations Planning & Performance Management

MerchantOperations

Treasury Back Office & Custody

Trade Services & Finance Specific

Processing

Cash Management

Specific

Billing

Investment Asset Management

Customer &Product

Maintenance

DocumentManagement

& Archive

TransactionExecution

Payments

Reconciliations

Cheque Processing

CashInventory

Transactions

Payroll Services

Common

SegmentAnalysis

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