Cheque Truncation

IBM occupancy Consulting aids Indian draw brusqueness Initiative Key challenges for Indian argots Ravi Trivedy IBM line of merchandise Consulting serve ups deeper deeper copyright IBM lodge 2003 IBM worry Consulting processs The Indian confirmation Scenario an IBM Point-of-View balk account books give brood to increase for the next 5-7 years All parties involved have unanimous reasons to continue to promote check usage Banks significant revenue flows atomic number 18 tied to the use of checks Slow consumer adoption of electronic payments cheques are bounteous + Perception of safetyMerchants, Corporates, Governments, and Non Banking Financial Institutions due to lack of cheap, convenient alternatives and because umteen accounts payable and receivable systems are designed around checks. copyright IBM heap 2003 IBM Business Consulting serve Image based processing of cheques in India present some(prenominal) challenges which all add up to the cost for the banking industry Geographical dust & volumes impact speed of physical movement of paper (specially inter-city) fourfold languages & scripts Multiple handling due to current processes in ranches high rejects in an mental projectry process Legal & Regulatory issues Lack of Centralized Banking systems in many banks to enable STP Potential for fraud/counterfeit cheques increases Copyright IBM Corporation 2003 IBM Business Consulting Services The Truncation inaugural will have a major impact on Payment trading operations some make out recommendations Indian Model Truncation at presenting Bank Big smash approach mandatory cutover for ALL startes Each Bank to decide its own sit down Truncation at peg or Service Branch or Outsourced Recommendations for Banks Understand volumes, current operations die strategy & optimized operations computer architecture in a truncation environment Define new processes (focus on mitigating operational risk) Re-define clearing operations & or ganization Copyright IBM Corporation 2003 IBM Business Consulting Services RBIs Working Committee on checkout Truncation has recommended truncation at the presenting bank itself, to maximize efficiency PRESENTING b each(prenominal) Big Branches DRAWEE BANK nerve centre Core Banking Banking placement System Branch Capture Data and Image One Pass readers for MICR Data, Greyscale & Bitonal Images Front & plunk for UID assignedAt Teller/Behind Teller Real-time/Batch Intra-Branch Intra-Branch handicap unclutter Cheque Clearing Clearing syndicate System House System House picture show & MICR ARCHIVAL PKI enabled CLEARING CLEARING CLEARING phratry HOUSE SYSTEM SYSTEM SYSTEM IMAGE & MICR ARCHIVAL 3 Months + 8 Years Browser based access to images for Banks & Customers Images, MICR,UID2 Clearing House Interface Clearing House Interface Service Branch Service Branch Or Or Or Outsourced Service Center Outsourced Service Center Outsourced Small Branches Images, MICR,UID MIS MIS Signat ure Signature Verification Verification CustomerCustomer Statements Statements IMAGE & MICR ARCHIVAL Copyright IBM Corporation 2003 IBM Business Consulting Services Reduced be, amend customer service and increased flexibility will drive each Banks imaging decision Value realization will differ from Bank to Bank New offers of value to customers Reduced be from re-engineered check exchange practices REALIZED VALUE Reduced costs via productiveness enhancements and fraud reduction Near-term customer service enhancement 2005 2006 2007 TIME 2008 2009 2010 Copyright IBM Corporation 2003 IBM Business Consulting ServicesWith RTGS and Cheque truncation, Banks will potentially lose a large income leverage The truncation initiative will re-define business models prejudice of float Additional cost of infrastructure & Operations Recommendation for Banks Develop a fee based product strategy to offset losses from customers, from secondary banks. differentiated service models Re-engineer Cas h precaution operate for Corporates piddle an optimized cost model for Operations build and operate OR outsource? Utilize the opportunity to image inter-branch cheques to improve customer service & bring down paper process costs Copyright IBM Corporation 2003 IBM Business Consulting Services Technology choices and implementation models will create differentiation in services and operational costs Each Banks defined operational model is directly related to its technology choices, implementation options and costs At each Branch vs. at a service Branch Smaller cities in a region? Remote Branches? Certification of Operations is a must Recommendations for Banks Analysis of current and expected cheque volume patterns should drive future model Optimize model with a blend and match inhouse + outsourceSelect Open Architectures to enable backwards integration Security, BCP and Operations Management are CRITICAL Copyright IBM Corporation 2003 IBM Business Consulting Services Cheque Pr ocessing and IBM A summary view Over 90% of the 40B US cheques issued yearly are processed with IBM Solutions VIEWPOINTE Bank of America, JPMChase & IBM Joint Venture for Cheque Processing Centers +1 Billion new items stored monthly +5. 1 one thousand million image retrievals daily Storage space occupies 2. 8 PB of data In India, the Reserve Bank uses IBM Solutions for its high speed clearing operationsIBM manages Cheque clearing/processing Operations in over 12 countries Partnering with BCSIS for Cheque solutions for Banks in India Complete end-to-end CHS functionality (Applications, foot, Integration, Operations Management, Outsourcing Service Centers) Totally submissive with RBI directives, PKI security enabled Based on Open Standards enables easy integration to Core Systems Copyright IBM Corporation 2003 IBM Business Consulting Services IBM uses its structured methodology to enable Banks to maximize their RoI from a Cheque imaging initiative 1 1 Create the VisionCreate the Vision 4 4 Review Bank Operations / Delivery strategy Review / Establish Bank Payments outline Obtain Stakeholder commitment 2 2 Develop Business racing shell Develop Business case for Check applications // for Check applications image enablement image enablement Cost effectiveness vs. Business needs Time to market & agonistic pressures Identify Applications Systems, Storage & Network Architectures 5 5 Create executing Plan Create execution of instrument Plan Application & integration priorities wise steps Business Process & Organization Reengineering Coincidence with industry initiativesApplications setup & Test Applications Setup & Test Setup, configure and Customise applications Integrate with Core Systems, PKI Infrastructure Integrated and User Testing Develop nurture computer program & materials Develop Operations model & timelines Develop infrastructure cost model Develop Operational cost model Develop products & revenue purpose 3 3 Develop Infrastructure Plan De velop Infrastructure Plan 6 6 Manage Implementation Manage Implementation Program Management Process, Change Implement connectivity Establish Organization Process, IT Training Implement & Test Security for Certification Copyright IBM Corporation 2003 IBM Business Consulting Services Summary Maximize your opportunities from the Cheque Truncation initiative head prepared Banks will benefit greatly from the Cheque truncation initiative New Opportunities Improve Customer Services New ingathering Offerings Product Differentiation Cross-selling Revenue Higher Efficiency Fraud Savings productiveness savings Operational cost reduction Reduction in confabulate volumes & follow-up Copyright IBM Corporation 2003 IBM Business Consulting Services Thank You ravi. emailprotected ibm. com deeper deeper Copyright IBM Corporation 2003