Modernization of Bank s Payment Systems: Transformation, Not Just Renovation Electra Consumer Payment Services Hub
Agenda Payment Industry Trends Opportunities for Banks What is Consumer Payment Services Hub? electra Consumer Payment Services Hub Case Study : State Bank of India ElectraCard Services Corporate Overview 2
Economic Crisis Stay Ahead of Competition Regulations Industry trends are driving banks to reevaluate payments Move from Consumption to savings orientation Merchant shifts promotional dollars to direct consumer targeting Reduced credit environment with lower revolving balances Disruptive : Mobile Payments, monetization of consumer Insights, Incremental : Prepaid, Hybrid and contactless, P2P Payments Re-Regulation with Merchant/Consumer Bias Death of Interchange funded debit rewards 3
Financial Institutions Must Innovate And Be Agile To Win In The Market Improve Operational Efficiencies Break down payments silos Lower IT costs Enhance Risk & Fraud Mitigation Prevent unauthorized account access via sophisticated multifactor authentication Reduce exposure with integrated AML, behavioral scoring and fraud detection capabilities Increase Margins Determine individual customer acquisition pricing for attracting new and retaining existing customers Lower costs to serve Acquire Customers Efficiently Expand number of products per customer while attracting non customers to open accounts Effectively mine customer data to improve cross-sell capabilities and launch targeted campaigns 4
Payment Operations Today Highly Complex, Redundant and Inflexible Complicated mesh with a lot of duplication and in-efficiency Multiple systems talk to each other THE PAYMENT MESH A Mélange of Systems Cash Management Corporate / Retail Clients Fraud Management EFT Switch Credit Systems Asset Management General Ledger Core Banking Loans Risk Management Corporate Clients IVR AML Systems Retail Clients IVR MIS / CRM Loan Origination Money Transfer Compliance Payment Gateway PrePaid Systems Associations ACH SWIFT NEFT RTGS 5
These Complexities Drive Cost And Make Solution implementation more difficult Hard-coded Links between Applications Inability to track payments through the process Duplicate systems and redundant processes Data and information difficult to access real time High degree of Manual intervention in process The payments business constitutes up to 35% of revenues and 40% of costs for banks Boston Consulting Group 6
Payments New Look To Deliver New Capabilities Consumer Payment Services Hub Functional View A Ability to manage, on a single platform, any Instrument type Standard/ scheme Channel Customer Transaction types Credit transfers Credit card Debit card IS8583 Online Corporate X SWIFT X Mobile X Retail X ISO 20022 ATM Other Fis Outgoing payments Incoming payments Batch B and deliver core payment functionality 1 2 3 4 5 6 Clearing Instruction receipt Validation, Authorisation Execution preparation Reconciliation C under key conditions 1 2 3...Delivered as services ( SOA) with ability to customise (BPM) and with sophisticated monitoring and alerting capabilities (BAM) 4 reliably at large volumes and throughput Source: Celent 5 with appropriate security, access control and audit trails 7
electra Consumer Payment Services Hub Reduces connection spaghetti. Common service integration layer with adaptors for external protocols. Modern Technology, standards based SOA Solution Centralized repository for definition and routing rules Single View Provides a single operational view of all payment operations. 8
Enterprise-class solution for DR Continuous Availability In case of failure of one site, transaction routed to other site. Active-Active Setup All data is synchronized by bidirectional data replication engine using Oracle Golden Gate. Load Distribution 50% Terminals can be configured to connect to each site. DR Operation Terminals/ Networks will be equally shared between each node in normal situation. 9
Security/Monitoring Security Transaction Security PA DSS certified Data Security PCI DSS Compliance Monitoring Device, Networks and Transaction Monitoring electramonitor - Comprehensive Web-based Tool System Monitoring Web View Point Event Management 10
Advanced Diagnostics & Reporting Transaction Logging Log viewer : Real-time view of log messages Tracing EMS is used for capturing events Reporting Reports available over a web based GUI 11
In a nutshell Payments make 35% of revenues for banks Regulation, the economic crisis, globalization, innovation, and competition making banks to reevaluate their payments Consumer payments will generate significant revenue and offer select opportunities for growth and innovation Successful payments portfolio management requires relevant capabilities in analytics and multichannel management Effective enterprise-wide payments governance is required to allocate scarce resources across the portfolio 12
case study India s Largest Bank State Bank of India EFT SWITCH PAYMENT GATEWAY MERCHANT MANAGEMENT SYSTEM DEBIT CARD MANAGEMENT SYSTEM/RECONCILIATION SYSTEM FRAUD MANAGEMENT SYSTEM 3D SECURE SOLUTION Business need A technology partner who would provide cutting edge and agile solutions that would help them go to market at the earliest A Switch which would ensure flexibility while guaranteeing high performance and quality, Benefits Significantly reduced TCO SBI migrated NFS acquiring onto electraresulting in significant cost savings High degree of parameterization empowers SBI to introducing new products Ease of integration ensured by electra Transformation Engine ECS Solution EFT Switch was implemented in active active mode using Oracle Golden gate DCMS and Payment Gateway was implemented using Oracle database and Tuxedo middleware 13
About ElectraCard Services We are the world s leading payment processing company, implemented 200 + payment systems across 30+ countries With our global infrastructure, global payment experience and power to deliver, ECS enables customers worldwide MasterCard Approved TPP with world class PCI-DSS certified data center facilities @ Phoenix and Atlanta (USA), Mumbai and Bangalore (India) with 24x7x365 support for disaster recovery Providing end-to-end processing of cards for Fortune 500 companies - largest TPP in India Prepaid cards platform for the largest Prepaid Card issuer in India ECS provides complete retail payment solutions including EFT Switch, Credit Card Management solution, Prepaid Solutions and Ecommerce Payment Gateway Solutions Supports 2/3 of India s card based Internet transactions 14
Thank-you ElectraCard Services Private Limited 1 st Floor, Bldg # 4, Commerzone, Samrat Ashok Path, Yerawada, Pune - 411 006. Tel: +91-20 - 6627 2100 www.electracard.com Proprietary & Confidential. Copyrights 2009. All Rights Reserved