Die Bankenlandschaft der Zukunftund ihre Anforderungen an die IT
CeBIT Finance Solutions Forum 2008Hannover March 4th 2008
Klaus Rausch, HVB Information Services GmbH
Managing Director
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Munich,Feb 25th 2008
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Agenda
Megatrends & challenges in banking
CustomersCompetitionHuman CapitalRegulationTechnology
Implications for the IT
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In the coming years, some key trends will drive the industry to become a highly specialized market with tremendous demand complexity
Customers redefine the rules of the game
2015 Mega-Trends
Internationalization & new kind of customers require a new type of employee
Technology improves inexorably to enable breakaway value
Universal banks and ultra-focused niche players thrive
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Regulatory burdens intensify4
The Future of Banking
Increasing internationalization and changes in approaching the customers require a different HR-portfolio. The emphasis will shift from administration towards an increasingly mobile and diverse workforce embracing the challenges of projects and change programs with global scope. Communication and facilitating skills become essential.
Heightened requirements around privacy, security and operational and partnership risk will require banks to take an enterprise-wide approach.
Advances in global connectivity, computing power, service-oriented architectures, and data analysis will lead to unprecedented functionality.
Customers
Competition
Human Capital
Regulation
Technology
The marketplace will further consolidate. The rise of industry specialists and the emerging competition from near- and non banks will both compel and enable traditional banks to specialize
Pronounced shifts in demographics, attitudes and behaviors, in additionto ubiquitous information, are giving customers increased purchasing power. Stronger participation will be demanded by the customers
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Customer value drivers are fragmenting as a result of changing demographics and value systems
Customer Value Drivers Fragment
“Norms” become increasingly rare; companies must delve deeper to understand the needs and purchasing drivers of customer micro-segments.
20th CenturyHomogenous Customers
21st CenturyFragmented Customers
Customer Segments
% o
f pop
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ion
Customer Segments
% o
f pop
ulat
ion
Extreme shifts in:
AgeWealthEthnicity/CultureLifestagepatterns Household compositionValue systems
Source: IBM
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Ongoing consolidation, the increasing success of new entrantsduring the last decade and the emergence of new smart players are forcing banks to rethink their strategies
Non and near banks
Direct banking
Industry specialists
Peer-to-peer loans
Social banking
Microlending initiatives
Price comparison sites
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Increasing regulatory burdens restrain the leeways for businessoptimization and strategic initiatives
International / pan-european initiativesBasel IISEPAMiFID
Updates on national regulationsSolvency, liquidity, MARisk, MAK,transparency, consumer protection…
Supervicory bodies' audits
Tax authority requests
Foreign supervisory authorities‘ requests
Effort saving in the area of the "run the bank"budgets are widely exploitet and thus can notabsorb the extra burdens
Budgetcap
Maintenance
Change -Δ
Regulatory +Δ
Aside of "normal" regulatory and supervisoryactivity, a series of voluminous, complex andexpensive programs occupied short businessand IT resources
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Agenda
Megatrends & challenges in banking
CustomersCompetitionHuman CapitalRegulationTechnology
Implications for the IT
Supporting a globally deployed business efficiently:Re-shaping & Re-structuring of UniCredit's German IT factory
Identification ofcore competencies
+Internationalassignment
Clearing upthe portfolio
Rightsizingcapacities
Concentration onStrategic
developmentof remainder
portfolio
Merge abundantsubsidiary structure
Establish centralizedIT governance andbudget control
Assignment ofcompetenciestowards IT factories(cross boarder)
Packaging oftopics andapplications
Execute outsourcinginitiatives
Securities &SettlementPaymentsLoan systemsmaintenance(transitional only)
Assessment ofremaining staff
Identification ofessential skillsroles & key players
Smart outplacement/separation of nonstrategic capacities
Re-deploymentof capacities withinIT factories andBack office functions
Consequent exploitationof economis of scale
Taking benefit ofin-house-specializationadvantages
Smart sourcing strategies
Point of departure:Classic universal bank portfolio comprising all traditional functions/systemsFragmented IT governanceShared budget responsibilities bewteen business deptartments and IT factoriesIT activities divided between 2 subsidiaries (infrastructure and applications)
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UCI's operating model is hinged on local and global competence centers
ICT Competence Centers
Location Main ActivitiesCzech Rep. EUROSIG supportHungary CEE Core BankingPoland B2E, TreasurySlovakia CEE Core Banking supportTurkey CardsAustria iSeries, International NetworkGermany Investment Banking, Basel II, Open systemsIreland Asset ManagementItaly EuroSIG, Mainframe
BO Competence Centers
Location Main ActivitiesCzech Rep. PaymentsGermany Finance & TreasuryAustria Loans & MortgagesTurkey CardsItaly Core BankingRomania Near-shoring strategic site (mainly) for all
Operational Lines
RomaniaHungary
Turkey
Poland
CzechSlovakiaGermany
Aut
Italy
IT Near-shoring site
BO Near-shoring site
IT historic siteBO historic site
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Impact and benefits of the newest software technologíes for thebanking industry – Web 2.0 and banking of the future
Traditional internet bankingWeb 1.0 reflects historical transaction-based banking (payment orders, statements…)One-way information-channel onlyPoor online interaction and communication possibilities
Web 2.0Collective intelligence approachParticipation of customer, bi-directional communicationSocial computingCustomers-bank communityFirst banking presence in Second Life already observableLeveraging internal communicationBlogs and wikis enhance knowledge management (e.g. re-use of corporate best practices)
Examples:ABN Amro and Wells Fargo presence in Second Life
The battle between banks for supremacy … will be won mainly by those who succeed best inthe area of personal contact.
ABN Amro executive statement
Succesful companies of the future will have participants not customers.Rather than having a business, they will have a community!
Web 2.0 is more than a meaningless buzzword and will clearly change almost everything in the way the banks drive business with their customers
Platform
CustomerPortal
Homepage
Web 1.0Web sites as well insulated entities, fully controlled by thecreators‘ own sphere of influenceCustomers sitting behind a browserFunctionality access through simple services pre-packaged by bankWebsite builder thinking of himself only
Functionality grows by adding services and the possibility to executemore sophisticated transactionsE-commerce has it‘s break through
Web 2.0Applications that harnesses network effects, getting better the more people use themRich functionality sets accessible to humans and machines, offered via reusable andinteroperable channels/web servicesWeb 2.0 approach puts more trust in users than ever before since it means inversionof information control to the usersNetwork effects and feedback loops will return in rewardArchitecture of participation that encourages user contributionCommunity and sense of ownership with users‘ side
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SOA – Bringing together creation of agile business processesand supporting applications the elegant way
Perfectly fitting approach for applicationsand processes which require
Frequent changesFast flexible and efficient change execution
Not only a technology but also an infrastructureframework and a management approach
Combination and administration of softwareservices
Overcomes the inflexibility of tight couplingbetween applications by using looselycoupled services
Service OrientationA General Structural Principle
Business Sector
IT Sector
Business Architecture-------------------------------------
Software Oriented Enterprise
Service Architecture-------------------------------------
Service Oriented Architecture
Appl./Infrastr. Architecture-------------------------------------
Service Oriented Infrastructure
Lust but not least:
SOA will help the open standards break through andfosters functional diversity of Web 2.0.
Mashups & Composite Applications – Let the others do your work, combine and save efforts!
Mashups
Applications that combine data / content frommultiple services into a new integrated experienceSourcing mashup contents via API, web feeds(RSS/Atom), JavaScriptintranet-based search engines, applications anddatabases exposed as web ServicesBI engines
Composite Applications
Application assembling functionalities from multiple,loosely coupled applications (servies) to supportbusiness processesmessaging systems, extranet services(e. g. data sources, application utilities) Faster and cheaper way to create customizedapplications for companies and alsosoftware vendors selling pre-mashed oreasy-to-integrate servicesApplication possibilities
Business productivity and research applicationsBranch and loans information servicesCorporate services (travel, conference, events, package shipping …)
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Hype Cycle: Web 2.0 has already done a good way through the stageof relativization and will soon step into the real banking sector!
Source: Gartner
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Thank You for Your Attention!
(www.ba-ca.com)
(www.unicreditgroup.eu)
(www.hvbgroup.com)
Klaus Rausch, HVB Information Services GmbH
Managing Director
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