About HCLTech Digital Banking
For a long time, banks had been trusted with providing all financial services, but now, this “trust” is shifting towards the non-banking players. There are primarily 3 reasons for this:
- Customer Centricity- This is the age of the customer, who demands fast, cheap, and reliable delivery of services, leading to an increased focus on customer centricity.
- Digital Transformation- Next-gen technology and delivery methodology to create best-in-class solution for the customer is the need of the hour. This digital transformation in banking has been instrumental in enabling digital business.
- Regulations- There is a growing consensus across the world on breaking banks’ monopoly on consumer data. A prime example is open banking regulations being ratified across the globe. Digital payment is another example as well.
All of this have led to a significant increase in spending by banks on digital core banking capabilities, not just to compete, but to also stay relevant. HCLTech’s vision is to enable and empower financial institutions to realize the full potential of open banking and “Open Finance” for their digital business. HCLTech also aims to delight consumers with the right digital banking products and services and continued investment to build an ecosystem of continued innovation.
Business Situation
Leaders of top banks across the globe are defining the future of banking service providers as technology companies with a license. But transformation of this traditional legacy business to a digital business will require billions of dollars in investments, the restructuring of teams, reimagining of the entire banking technology stack, and the adoption of a business view that hinges on customer centricity. Henceforth, we are in the middle of sweeping digital transformation programs in almost all across the industry to enable digital banking.
CAGR of neo-banks (100% digital) between 2020-2026
Digital sales for banking products in the UK, 2020
Digital payment value in 2020
HCLTech Solution
Neo-bank rollout
Neo bank is a digital bank that operates exclusively online without traditional physical branch networks. This requires a modern framework based on cloud-native composable architecture that allows a bank to set up in days rather than in months or years. Our solution helps banks with:
- Faster time to launch
- Increased efficiency – automated modern digital customer journeys resulting in minimal/no ops
- Reduced risk - Decisions powered by data aggregation from new sources
- Reduced cost - Ready to use pre integrated solution
Core Banking Implementation and Modernisation
A core banking system is the heart of any banking operation. It is the system that allows the bank to open accounts, take deposits and make payments. Based on the size of the bank and complexity of the banking operations, Core Banking Implementation and Modernization could follow different approaches such as Big Bang, Parallel run, Product by product and Customer sets. Our solution helps banks with:
- Faster time to market of core system roll out across multiple countries
- Quicker launch of new products
- Rollout hyper-personalised offerings
- A modern microservices-based architecture
Seamless Omni-channel Experience
With the proliferation of digital banking services, the customer experience has taken center stage of the end-to-end banking experience. This involves design thinking approaches and also transformation of the banking process and operations landscape to ensure a seamless Omni-channel experience. Our solution helps banks with:
- Improving customer experience
- Promoting loyalty
- Retaining customers
- Encouraging brand advocacy
Customer 360
The customer is at the center of all banking operations and hence, the key to driving more business for the bank is to have as much information as possible about the customer (with consent). This requires three sets of intrinsic capabilities.
- Efficient and effective operational CRM for sales, service and marketing.
- A modern analytical CRM with data warehouse/data lakes that has single source of truth with respect to customer information.
- A cutting-edge orchestration/integration layer that stitches together the above and other critical systems of the bank.
- Our solution helps banks with:
- 360-degree view of customer leveraging an extensible data model
- Delivering high performance omni-channel customer service necessary to succeed
- Business process automation
- Intelligent customer insights
Strategic Pricing and Billing
One of the most effective ways of building customer loyalty is through relationship based pricing. For this, banks need to invest in technologies that support strategic pricing and billing. This would allow the banks to give preferential pricing on products and services to the appropriate customer groups. We have built great partnerships with several pricing and billing software providers, and our solution helps bank with:
- Faster time to implementation and rollout of the new system
- Enhanced customer experience
- Increased customer profitability
- Consistent automated execution
Customer Engagement Engine
Banks today are seeking to deepen the relationships with their customers across all channels. During the pandemic, the physical number of bank branches have reduced and digital channels like the web and mobile have gained prominence. This has also put a lot of pressure on the call centers that have become virtual branches in the absence of physical contact. These can be developed on cutting-edge cloud native development platforms like Pega and Salesforce. Our solution helps banks with:
- Enhanced customer satisfaction
- Increased number of next best conversations
- Simplification of customer facing processes
Frictionless Onboarding
A significant percentage of customers abandon onboarding processes in digital channels. This is because the onboarding process takes too long or when it requires more information than they are willing to disclose. This makes it extremely important to have a digital onboarding process that is broken down into simple steps and has seamless integration with KYC, customer identification and customer credit checks. Frictionless onboarding has following advantages.
- Expedite Process- Digital document submission, E-signature
- Increase efficiency - Automated verification, due diligence, and decision making
- Reduce risk- Decisions powered by data aggregation from new sources
- Reduce cost - Ready to use pre integrated solution
- Intuitive self-service with on demand assistance
Banking-as-a-service
Banks are looking for end-to-end digital transformation solutions. These integrated solutions offer provide the entire stack of offerings as a single platform
- Hosting solution – IT infrastructure components
- Platform – Application components
- Digital Process Operations
- Business domain consulting services
- Our solution helps bank with:
- Single point of accountability – The bank needs to manage only one partner, thereby significantly reducing the vendor management and governance overheads.
- Innovative pricing models – The bank can get dynamic pricing models like per account created, per payment made etc.
- Risk/Reward model – Higher skin in the game
Utility model – some of the business functions can be consumed in a shared service model (e.g., KYC), further reducing the TCO for the bank.
Success Stories
Business Challenges:
- Maintain and expand the leading market share position by simplifying the business and being the “best in digital”
- Customer participation and transparency in the loan lifecycle process.
- Creating a seamless user experience for lending across various customer touch points
HCLTech Solution:
- HCLTech has been a decade old strategic partner of Home Lending business of the Bank and have grown to 500+ engineers during the course.
- Solution framework developed by HCLTech is now being extended to automate all processes in Home Buying, with centralized decision engine to house & manage all Home Lending rules
- Distributed Agile Model at offshore successfully implemented
Benefits:
- 30% Overall cycle time reduction of application processing
- 45% Improvement in CSAT due to relationship-based pricing discounts
- 12% Reduction in financial stress of the sanctioned loans
Business Challenges
- Threat to the leading market position due to legacy systems
- Tech landscape was not nimble and easily customizable, causing customer dissatisfaction
- Increased focus on fraud prevention and risk management due to business needs and regulatory requirements
HCLTech Solution:
HCLTech offers development, testing and integration services in various key initiatives as a part of the overarching program to build and enhance the retail banking platform
- Implemented unique omni-channel digital platform for retail banking customers
- End to end platform-led customer experience management services | Device agnostic service focused on customer micro journeys
- Service Layer Development for Big Data Lake | Development, Enhancement and Support project of DWH ETL process; Re-engineering of Treasury ETL application
- Migrating 2500 reports from SAP BO 3.1 version to SAP BO 4.2 version with all dependent components
- Complete integration services for Simility (fraud prevention) implementation
Benefits:
- API and Microservices led architecture- Low footprint, easily pluggable, future proof and scalable
- Cloud enabled platform with reusable components – HCLTech was able to reuse components from the first app built to build the award winning easybank app
- Compliance to EU GDPR and Austrian data regulations
- Cost benefit of ~40% in digital platform implementation
Business Challenges:
- Siloed Data within the organization
- Limited ability to leverage data
- No single view of customer profile and interactions
- Advisors were not trained to look for opportunities across products
HCLTech Solution:
- Leveraged data virtualization to break down data silos without having to physically replicate data to an additional data warehouse
- Created dashboards that allowed advisors to see customer profile, interactions and recommendations on a single screen
- Data was collected and transformed to provide a single view of the customer, this data was then used by the data science team to create models that would predict churn, and recommend products
- HCLTech devised a change management strategy that would educate different stakeholders about the new system and how to leverage the data it was providing across all lines of business
Benefits:
- 1.5X Increase in multiproduct customers
- 35% Increase in new customer acquisition compared to control group
- 7% Market penetration increase
- 23% Reduction in campaign costs
Business Challenges:
- To create, adopt and maintain a common standard for open banking API
- Tighter deadline for PSD2 Open banking Regulatory compliance
- Handling Exceptions/Error Framework
- Lack of automation testing in the current landscape
HCLTech Solutions:
- Built more process API's to encapsulate business process orchestration.
- Built system API's to access legacy system & database to expose data in canonical formats.
- For API led connectivity, built integration flows with reusable approach to reuse the logic in & across the integration platform.
- Solutions built in adherence to PSD2 open banking regulatory standards
- All regulatory releases – CMA1, 2 & 3.0 delivered on time
- Built common error framework, to capture the business/logical errors to handle business requirement across the banking domain
- ‘Shift Left Testing’ with a greater focus on automation testing - 95% Automation Testing, 5% Manual Testing
- 100% automation in system and performance testing yielded €1.2M saving in 2019.
Benefits
- $1.2 Million Savings with 100% automation in system & performance testing
- 80% Offshoring reduced significant delivery cost
- 95% Automation Testing with ‘Shift Left Testing’ approach.
Ecosystem of Partners
Partnerships play a crucial role to ensure smooth delivery of innovation to our clients in the ever-evolving digital banking landscape. HCLTech has a robust ecosystem of partners. Together, we provide the end users with cutting edge solutions in the areas of Digital Lending, Onboarding, Digital Payments, Reconciliation and Trade Finance.
