Enabling Delivery of Enterprise Applications for Financial Services Companies

Enabling Delivery of Enterprise Applications for Financial Services Companies

Executive Summary Computing platforms revolutionize the way we work. Mainframes The First Platform - 1955 to 1980 Personal Computers The Second Platform 1980 to 2010 Mobile Computing The Third Platform 2010 to.. As the modern Enterprise evolves into embracing Mobile Computing, Mobile Network Operators (MNOs), System Integrators, Technology Service Providers (TSPs) and other companies already serving Financial Services Companies are particularly well positioned to add value for their business customers by offering Enterprise Class mobile applications, tailored to each market vertical, that helps the Enterprise grow while remaining compliant with regulations for every part of the world. 2

Contents Executive Summary...2 Enterprise Applications The Opportunity...4 Mobility Platforms can bundle value for the Enterprise...6 IDmission - The Technology Platform...7 INFORM Mobility for your business...7 Ada - Platform on the Cloud...8 Conclusion...8 Exhibit 1 (Demo Videos)...9 Some Examples of Enterprise Mobility Solutions built using INFORM...9 Exhibit 2 INFORM Use Cases...9 Pension On-boarding in Latin America...9 Bank Loans Risk/Fraud Management...10 Credit Card Delivery Confirmation...11 Micro Finance and Group Loans...11 Money Transfer KYC at Point of Service...11 Know Your Agents...12 Insurance...13 3

Enterprise Applications The Opportunity For the purposes of this paper, we will restrict our analysis to Enterprises that offer Financial Services. Financial Services Industry Verticals Market Pressures Regulatory Pressures Solution Banks Speed of On-boarding, Financial Inclusion, Non-branch Banking, Serving Remote locations KYC, Biometrics Mobile Computing Micro Credit & Loans Fraud, Risk, AML, Serving Remote Locations KYC, Biometrics, Informed Customer Consent Mobile Computing Pensions Fraud, Proof of Life, Serving Remote Locations KYC, Biometrics, Informed Customer Consent Mobile Computing Prepaid Cards Speed of Activation, and Reload, Serving Remote Locations KYC Mobile Computing Insurance Speed of on-boarding, no errors, better customer experience, Serving Remote locations KYC, Biometrics, Informed Customer Consent Mobile Computing Telecom Speed of on-boarding, no errors, better customer experience, Serving Remote locations KYC, Biometrics, Informed Customer Consent Mobile Computing Table 1: Mobile Computing can solve many problems for today's Financial Services Enterprises To address the market pressures listed in Table 1, Enterprises have developed market strategies beyond the traditional branch (or store) based models. Banks have evolved into agent banking (or correspondent banking) and field agents. The micro financing industry is almost entirely based on field agents, as is Insurance. Telecom operators routinely have far larger numbers of small retailers as agents than company owned locations. Technology is clearly essential to delivering uniform customer experiences, rapid on-boarding, and activation, and staying compliant to evolving regulations remains a big challenge. 4

Enterprise Applications The Opportunity Assuming a middle income country (per capita income less than USD 15,000) with a population of 100 million the investment made by the Enterprise to address its market challenges (in terms of employees and agents serving customers in the field) is shown in Table 2. Industry Verticals Number of Agents Banks Micro Credit and Loans Pensions Prepaid Cards Insurance Telecom Total 75,000 75,000 50,000 25,000 150,000 25,000 400,000 Table 2 The immediate opportunity is to dramatically improve the productivity of this enormous field agent force by rapidly creating and deploying mobile computing solutions, tailored to each Enterprise, in each vertical. At a conservative estimate of revenue of USD 30 per agent per month, the recurring revenue component of this limited market would be USD 144MM per year. Expanding this concept within this vertical, and to other verticals, and deciding to offer Enterprise services directly to consumers, would multiply the size of this market manifold. 5

Mobility Platforms can bundle value for the Enterprise Enterprises need a lot of help in developing their mobile computing infrastructure for the next decade and longer. This process comprises of three steps 1. Set Policies 2. Integration with existing Enterprise Software Systems 3. Deploying Mobile Service Delivery Applications Mobile Network Operators (MNOs), System Integrators, Technology Service Providers (TSPs) and other companies (Financial Services Vendors) already serving Financial Services Companies, equipped with the appropriate technology platform could offer all three services to their existing business clients with one time revenue for consulting and technology integration and a recurring revenue stream from use of the mobile applications The appropriate technology platform must be able to: 1. Easily integrate with various technologies that find use as Enterprise core Systems of Record 2. Easily integrate to 3rd party and government databases for the purpose of data verification and augmentation (for example, INE in Mexico, Aadhaar in India, NADRA in Pakistan, Experian in the United States etc.) 3. Must be capable of being delivered from the Cloud 4. Must be capable of integrating dynamic data collection including multi-modal biometrics, image collection and processing, signatures, geo location etc. 5. Must be agnostic to hardware and device platforms must work on smart phones, tablets, laptops and PCs regardless of the devices operating system 6. Must be capable of being configured to develop and deploy a very large range business services as required by industry verticals being served. 7. Must be capable of developing and deploying highly customized user experiences so as to enable each Enterprise to maintain their competitive advantages in the way they serve their customers. 8. Must come with a management portal for administration of the infrastructure, reporting and analytics. 6

IDmission - The Technology Platform IDmission offers all the technology components needed to enable the Financial Services Vendors add value to their Enterprise customers for their mobile service delivery needs. IDmission offers INFORM, a configurable front end application development and delivery framework, Ada, a platform on the cloud and a PORTAL, also connected to Ada for infrastructure management, back office use, reporting and analytics. System of Engagement Use on any Smart Phone, Tablet, Laptop or PC. Customer Centric Platform On the Cloud Figure 1: IDmission Offering On-Line connections to 3rd party Systems of Record, and the Enterprise Core. INFORM Mobility for your business INFORM is an HTML5 application that can be used to configure a wide range of user experiences without any programming. CREATE Define data fields Text, Numbers, Select lists, Signatures, Images, Biometrics etc. COLLABORATE Define workflows that enable multiple teams to work on the same data INTERACTIVE Define the application logic that makes the data entry efficient and intuitive IDENTITY INITIATED Biometric and/or document validation and verification for ID management INTER-CONNECTED On-line calls enable data pre-population, data augmentation and verification PAYMENT Cash, Credit, Debit, ewallet, etc. Figure 2: INFORM application development and delivery framework 7

INFORM Mobility for your business Inform supports 4 types of biometrics (Finger print, Face, Voice and Iris) and can be, and has been, used to configure a large range of applications as required by financial services companies in different parts of the world (see Exhibit 1). Ada - Platform on the Cloud Ada is front ended by an Application Programming Interface (API) over which an application (such as INFORM) can send it a REQUEST. The REQUESTS are acted upon by Ada using its software components toolkit (Figure 3) and sent to 3rd party systems if required. After the REQUEST is completely processed the result is returned to the front end application (such as INFORM) in a RESPONSE. Ada also comes with an Enterprise Service Bus with a large library of pre-configured adapters that enable easy interfacing with the Enterprise core or with 3rd party software Systems of Record. Figure 3: Ada - Platform on the Cloud Conclusion There is a very significant opportunity for leveraging the Financial Services Vendors existing business customer base by offering Enterprise Class Mobile Applications that have a very high value quotient for their business customers. IDmission has developed all the software components needed to make this happen and is in the process of actively seeking partnerships around the world. 8

Exhibit 1 (Demo Videos) Introduction to INFORM (English) - https://vimeo.com/116686479 Some Examples of Enterprise Mobility Solutions built using INFORM 1 2 3 4 5 6 7 8 9 Know your Entity (KYE): On-boarding Corporate Entities Bank Loans Application Processing Bank Loans Application Processing Using Biometrics as a second factor for secure self-service transactions INFORM Features: On-boarding and KYC with Biometrics KYC ID Validation for Money Transfer Insurance Policy Online Form Financial Services On-boarding Aadhaar ekyc and On-boarding (India) https://vimeo.com/116681042 https://vimeo.com/116679673 https://vimeo.com/116679673 https://vimeo.com/116678373 https://vimeo.com/116689656 https://vimeo.com/116690440 https://vimeo.com/116691806 https://vimeo.com/116693496 https://vimeo.com/116796795 Exhibit 2 INFORM Use Cases Pension On-boarding in Latin America Business Background : This government mandated program has over 50MM account holders (about 20MM active at any point in time) and over USD150BB funds under management. The program is regulated by the national Pension regulator and managed by private companies called AFORES. The technology is run by PROCESAR a company owned in equal part by each of the AFORES. The AFORES compete with each other by inducing customers to switch from one AFORE to another. The regulator became concerned when a large number of switches were performed by customers moving from AFORES offering higher rates of return to ones offering lower rates of return. The problem, the regulator decided was that the customers were financially illiterate and making uninformed choices. 9

Exhibit 2 INFORM Use Cases Regulatory Background : The regulator passed regulations requiring AFORES to use tablet based applications instead of the current paper forms. The tablet would be required to use a voice recording to INFORM the customer of the salient features of the transaction they were choosing to undertake. The customer would be required to speak back into the tablet confirming that they have heard and understood the details of the transaction they are undertaking. A further confirmation is provided by capturing the customer s fingerprint and the fingerprint of the AFORE agent (called a promoter). Fingerprints and voice recording need to be stored on the cloud for reporting and audit. Solution : IDmission in partnership with DigiPro, S.A. de C.V. offers ready to go product that meets all the requirements for AFORES to be able to take a product to market, fully compliant with regulations as well as offering a significantly improved user experience for both the promoters as well as the customers. Bank Loans Risk/Fraud Management Business Background : One of Mexico s second largest banks runs an automobile financing program wherein customers can apply for loans to purchase automobiles (with the vehicle as collateral). The bank is suffering from very significant fraud perpetrated by criminals using stolen/- forged identity documents. Regulatory Background : There is no regulatory requirement for compliance here. Solution : IDmission and Digipro demonstrated a working solution for the Bank that used the following steps: 1. Capture image of customers IFE card 2. Validate IFE card, extract data from it and populate the application form 3. Capture image of customer s face 4. Match face image versus photo on IFE card (Flag if match fails) 5. Collect additional data on employment, references, vehicle etc. on the mobile form 6. Collect fingerprint of customer send to IFE authority to validate Authorize or decline loan based on KYC and credit score results 10

Exhibit 2 INFORM Use Cases Credit Card Delivery Confirmation Business Background : A large telecom operator wishes to offer their enterprise customers business application delivered on mobile phones/tablets as a value add to the voice/data services they already provide. In this context they are working with IDmission/Digipro to offer the ability to confirm that a credit card was hand delivered to the same person that applied for it. Regulatory Background : NONE Solution : At the point of credit card delivery, an image of the customer s identity document is captured, along with an image of their face and a fingerprint. The document details, the face and fingerprint are then matched biometrically to those captured during the process of application for the credit card. Micro Finance and Group Loans Business Background : Microfinance organizations offer group loans to teams of individuals to help them meet their capital needs. The requirement here is to collect application information from individual group members, aggregate the information into a complete package and run through their existing credit process. KYC on each group member is required including biometrics for both the application process as well as for weekly transactions in/out of their credit account. Solution : INFORM was used to build and demonstrate the desired process. The form building and configuration was done entirely by IDmission partners, demonstrating the ability to scale the product easily and globally. Money Transfer KYC at Point of Service Business Background : A large global Money Transfer company is under regulatory pressure to ensure KYC is done for customers that send or receive money in certain jurisdictions. 11

Exhibit 2 INFORM Use Cases Regulatory Background : Agents have been taking photocopies of ID documents of customers as required by regulators for some years now. However, audits by regulators found MANY instances where obviously fraudulent documents had been copied and stored (ID s showed photos of Panda bears, Barack Obama, or just random scenery or altogether blank). The money Transfer company came under tremendous pressure to ensure that ID s were captured and validated at the Point of Service. Solution : IDmission offered its platform capabilities to inspect images using computer vision. ID images captured at the POS are sent to IDmission (either in real-time or in batches) and each is inspected for image based authenticity (detect location of security features, data etc.). Data is extracted and validated using check digit validation for ID numbers, date of expiry etc. IDmission is currently processing large numbers every day from Spain, Portugal and Italy. Expansion to other countries in 2015 is underway. In India, the same process is followed but biometric fingerprint capture is used. These fingerprints are validated by Aadhaar, the national biometric database run by the Government of India. Know Your Agents Business Background : A large, global, money transfer company is under regulatory pressure to ensure that they have complete data on all their agents around the world. The company uses a hierarchy of Master Agents that sign up sub agents. It is required to have complete information on Master Agent Entities, Sub Agent Entities and all the beneficial owners of each business entity. Regulatory Background : Anti Money Laundering laws and financial compliance laws in various jurisdictions require data collection, AML checks, Credit Checks and Global Due Diligence for all existing agents as for all newly signed up agents. 12

Exhibit 2 INFORM Use Cases Solution : The company marks the agents they wish to collect data using their system of record. IDmission connects to the System of Record and picks up all marked records. Existing data is populated into the form and sent to the responsible Master Agent (MA). The MA reviews the data, edits it and enters any sub-agent information that is known to them. The sub-agent (SA) receives the form with aggregated data and edits, updates and adds owner information. The owner(s) get the form with all available data add to it and certify by signing. The package (with data from MA, SA and Owners) is taken through a workflow consisting of 4 steps: 1. Agent Implementation team checks for data completeness. 2. AML 3. Credit Check 4. Global Due Diligence At any of these steps the form can be sent back to the originator (MA, SA or Owner) to review, add or replace data/documents. Insurance Business Background : Onboarding a customer for automobile insurance was a paper based process that required the agent to fill the application form, take these forms to an office location, enter the data into a computer. If the policy was issued based on data provided, then the agent had to go back to the customer to collect payment and issue a cover note for the policy. The company wanted to use mobile phones/tablets owned by their agents (BYOD) to enable policy sales and renewals in the field to reduce activation times from days to minutes. Solution : INFORM was configured to collect vehicle information, connect online to the insurance company to get vehicle valuation numbers. Then agent collected coverage information and INFORM got an on-line quotation for premiums. If accepted by the customer Customer information is collected and payment collected and cover note issued on the spot. 13

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