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‘Indian banks shifting focus from IT to IM’

Banks have now shifted focus from information technology
(IT) to information management (IM) to meet business priorities and market
demand, according to the KPMG’s Information Enabled Banking Survey (IEB).

Banks have now shifted focus from information technology
(IT) to information management (IM) to meet business priorities and market
demand, according to the KPMG’s Information Enabled Banking Survey (IEB).

According to the survey, information management is the
ability of organisations to capture, manage, preserve, store and deliver the
right information to the right people at the right time and at an optimum cost.
The survey was conducted amongst top 10 private banks based out of South India
to understand the current information management landscape of banking industry.

According to the KPMG
survey, IM ecosystem encompasses all areas of the bank, interlinking key areas
around strategy, data quality, standardisation, systems, analytics, security
and people. Some key fundamentals of an IM strategy are centralisation, self
service delivery model, automation, rationalisation and harmonisation,
standardisation and outsourcing and performance management. Each of these
blocks will enable a Bank’s capability to leverage their IM capability and
re-align IM investments to their strategic focus.

Data quality is one of the fundamentals for a bank in having
robust IM capabilities. Ensuring quality of data is a common challenge faced by
the banks considering multiple input sources, extensive digitisation of
existing records and large data.

According to the survey, 33 per cent of the respondents use
automation in their monthly report generation process and 44 per cent have
minimal manual intervention, so as to reduce data quality issues. In comparison
to this, 67 per cent claim to have clean and standardised data across systems.

Most banks today follow a standardised reporting format at
the local branch, region, zone and at the corporate level, but the major
challenge the banks face is standardising the report generation methodology
despite having a standardised reporting form and clearly defined output. The
survey suggests only 11 per cent of the respondents perceive that they have
advanced standardisation maturity, indicating there is scope for improvements.
The outcome is continued higher IT investments without strategic cost benefit.

Business Analytics help banks identify areas of competitive
advantage and risks. Leading banks use analytics to track behavior of customers
by identifying spending patterns to leverage on cross selling opportunities.
Data availability and data quality are the pre-requisite for any business
analytics capability. 44 per cent of the respondents of the survey revealed
that they require at least some amount of manual intervention before they can
use the data for analysis.

Only 44 per cent of the surveyed banks use a business
analytics tool.  22 per cent of the responding banks have an
institutionalised procedure for business analytics.

Going by the survey it is understood that information
management is now recognised as a key function by banks. The information
management objectives across banks are cost efficient IM organisation, business
partnering decision support systems, insightful information systems, value
realisation from IT investments through centralisation and outsourcing. These
objectives need to be realised and attained in a systematic manner for banks to
be able to achieve top line growth.

By CIO staff

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