- Client name: Lakshmi Vilas Bank (now DBS - Development Bank of Singapore)
- Industry type: Banking
- Products/services or core business: Retail and Commercial Banking offered through a variety of online, mobile, branch banking, and ATM channels
- Geography or areas of operations: Mostly South India with some retail presence in West and North of India
- Number of customers/who are their customers: Because retail banking is the focus, clients are numerous and range near 20 million+
- Any other relevant detail: Asset size: INR 55,000 Cr. (approx. USD 8 billion)
Key client problems & issues: As part of its IT modernization drive, the bank’s IT Leadership wanted to achieve a futuristic IT architecture that should help the bank:
- Significantly reduce the go-to-market time for a new range of services enabled mostly through the digital integration of existing and new solutions and platforms
- Transition smoothly to the latest version of Flexcube core banking and ensure that newer features are made available on digital channels with advanced security elements
- Create a sandbox environment with separate catalogs for existing and potential partners for consuming banking APIs to reduce the costs and risks involved
Background: The banking industry in India is undergoing tremendous change. The Government and regulators have made India Stack available, enabling presence-less, paper-less, and cash-less service delivery at a low cost. The banking world is witness to a steady rise of new applications and services, that help reduce the timeline within which services are made available, making a significant impact on client satisfaction and expectations. Lakshmi Vilas Bank’s IT leadership needed to ensure that their Enterprise Architecture could easily support integrating new applications and consumer services from Fintech providers and clients. Additionally, the bank needed to make a range of new services from their upgraded CBS available to the clients of their channel applications (such as online, mobile, and ATM) and wanted to partner with Fintechs to launch new services and reduce costs and the time-to-market of these new services.
The following solutions were identified to attend to the client’s needs:
- API Management Platform that allows the client to access the API economy (viz. integrate with different service vendors and clients) and is an additional revenue source or allows for cost savings. Example: The client can now offer a complete range of bill payment services with seamless API-based integration with utility providers and fintech partners.
- Enterprise Service Bus that supports quick and easy integration of different product/channel applications through better management of complex protocols. The Enterprise IT architecture becomes simplified and much more “plug & play.
API Management Platforms and ESB are basic building blocks for a modular/flexible technical base to add new applications and expand services. The solutions helped the bank’s IT team transform their monolithic architecture into a much more modular one that could help them absorb new apps and (Fintech-based) services seamlessly. This plug-n-play architecture helped them integrate new apps and services much more easily without much worry about the compatibility of protocols between different applications. It also allowed quick delivery of APIs to integrate and complete the development lifecycle for new products/processes more easily.
The ESB implementation project was executed without disrupting the existing operational integration setup during migration, with minimal channel-level changes. Thus, all as-is services were retained for the bank’s customers while the bank’s IT architecture was made more robust to launch multiple new services and improve existing services more smoothly and cost-effectively in conjunction with the bank’s IT/Fintech partners.
- Creation of an underlying ESB layer for multiple business applications and consumers to communicate through a service layer based on common framework and rules
- Decoupling of business-centric functions from the process and data that supported the implementation, enabling the client to speed deployment cycles through the implementation of DevOps opportunities
- Ensure governance and security-based API framework for internal systems to access APIs for preventing access control risk and internal threats
- Enablement of encryption and digital signatures for sensitive and externally accessed APIs
- Support for end-to-end traceability and audit trails for accessed APIs
- Convergence of customer-facing capabilities on online, tablet, and mobile devices enabled a true omnichannel experience
- Creation of a sandbox environment with separate catalogs for existing and potential partners for consuming banking APIs reduced the costs and risks involved
Client’s Business Goals:
- Launch new services/product offerings for bank’s customers through the integration of new applications and Fintech-based providers and add approximately 4-5% of new revenue from these products/services in the next three years
- Move more of client servicing to channels, such as online/mobility, and reduce clients coming to branches for these services by 1/3rd in next three years
a. Results in operational saving because servicing clients via channels is up to 80% more cost efficient than servicing via branches for the same services
b. Branch can re-focus employees on more productive work, and thus additional capacity is created for such work
- Improve CSAT amongst digitally savvy customers who are also high-value customers of the bank, helping to reduce the attrition rate of these customers by about 20%
- Services available on channels is a big selling point and can help improve client conversion (from lead to customer) ratio by about 1-3%
The bank realized actual business benefits through undertaking specific projects. The platforms provided much flexibility and expanded choice partners while making technical decisions to add new apps and Fintech partners or integrating existing apps for seamless delivery.