Superior decision making with proactive alerts

Excerpt Top Indian bank radically reduces non-performing assets with an Early Warning System

About The Client

The client is the third-largest bank in India offering a wide assortment of financial products to large and mid-size corporates, SME and retail businesses.

18,000

Employees

3,702

ATMs

1,892

Branches

1,407

Centres across
India

Dubai

One overseas
branch

Products & Services

Investment Banking, Consumer Banking, Commercial Banking, Retail Banking, Banking, Asset Management, Pensions, Mortgages, Credit Cards

Business Landscape

Non-performing assets continue to be one of the biggest challenges facing the global banking system, and particularly, Indian banks. As per the Reserve Bank of India (RBI) the gross NPAs in Indian Banks are valued at US$61.5 Bn.  In such volatile market conditions, bank stakeholders and regulators expect constant reassurance of good quality, less risky loans. Many are revisiting current practices and reengineering them to advanced approaches. Indian banking is gradually moving from a simple compliance driven entity to proactive control based digital systems that can actively manage credit risk.

The Challenge

The recent economic slowdown was expected to have an impact on customer segments across the bank’s portfolio of products and services. The client needed to safeguard their assets and proactively monitor their operations, given that nearly 80 percent of their loans were to the corporate sector, specifically power and infrastructure companies which were in ill health in recent times, significantly elevating the NPA levels for the bank.

The client sought a technology partner who could help them set-up an early warning system for their DC and DR locations for proactive monitoring and management of credit risk. Some of the key expectations were:

  • Compliance with RBI’s RFA list and EASE requirements
  • Dynamic monitoring through Auto Alerts, configurable as per bank needs
  • Integration with diverse Internal & External sources (E.g. Internet, Third party data sources – Data aggregators/CIC’s)
  • Case management to manage workflow with the appropriate escalations, follow-up and corrective actions
  • Risk scoring for categorization of customers into different risk buckets
  • Inter-Bank comparison /analysis, ccustomizable reports and market intelligence
  • Recommendations for strategic decisions at account/ portfolio level

Client Testimonial

We highly value our partnership with BCT Digital, they have enhanced our ability to better serve our customers and offer competitive prices while at the same time significantly improve our profitability across product lines.

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Top Indian bank driving business growth through market responsive pricing calculator – Risk Adjusted Return on Capital (RAROC)

About The Client

The client is the third-largest bank in India offering a wide assortment of financial products to large and mid-size corporates, SME and retail businesses.

US$9.9 billion

Revenue

55,000

Employees

4,050

Branches

11,801

ATMs

4,917

cash recyclers
across India

9

International
Offices

Products & Services

Retail banking, corporate banking, investment banking, mortgage loans, private banking, wealth management, credit cards, finance and insurance

Business Landscape

Corporate banking in India is passing through a turbulent time. Shrinking lending margins, higher instances of cyber-attacks, competition from start-up fintech and digital savvy clients are taking a toll on traditional Indian banking. To thrive in this environment corporate banks are evaluating ways and means to make sweeping transformations and to bring in operational efficiencies as well as convenience for their customers. Innovation in products and pricing are among the top priorities of modern Indian banks.

The Opportunity

The client’s existing pricing framework was based on obsolete systems and processes and in many cases the pricing mechanism was not commensurate with the risks involved. The Bank wanted to introduce an improved pricing architecture that leveraged the latest technology innovations and process advances to significantly improve profitability across their client base. They were looking to create a framework that would give them an edge over competition, taking into account new variables such as market direction and competitor analytics.

Choosing the right partner

‘The bank was looking for a partner who shared the bank’s vision and could help them drive operational efficiencies with a renewed pricing framework and therefore contribute towards the profitable growth of the corporate banking division. BCT Digital emerged as the natural choice, given our experience and commitment to delivering sustainable transformation for our customers globally, adapting advancements in technology, customized to individual client needs.

Our Solution

BCT Digital worked with the bank to identify current process and technology gaps. Our team of experts redefined processes and came up with a pricing architecture that not only adhered to industry standards and best practices but also took into account the interests of the bank. The framework reduced operational efforts and induced decision making to improve overall profitability and returns. A key aspect of the solution are the three modules that were created:

  • Data Input Module that ingests customer/facility data, utilization, pricing, cost of funds, rating and security.

  • Computation Module that computes risk weighted assets, capital and risk adjusted return

  • Customer wise and segment wise profitability (relevant for relationship managers

  • Sensitivity analysis of profitability (important for risk department staff)

Business Impact

  • Increased profitability with credit profile-based pricing that considers diverse elements such as tenure, ancillary income etc.

  • Augmented client targeting and upsell opportunities through a holistic view of the customer, with options to access overall as well as product wise profitability.

  • Comprehensive risk management by taking into account collateral/guarantee in computation of loss instead of relying solely on credit rating

  • Accurate determination of sales targets with the introduction of systematic budgeting for yearly/quarterly account planning

  • Enriched quality of the information as a result of introducing an access controlled, workflow-based system.

  • Improved user experience with an easy to adopt framework that provided multiple input interfaces and integration options.

Client Testimonial

We highly value our partnership with BCT Digital, they have enhanced our ability to better serve our customers and offer competitive prices while at the same time significantly improve our profitability across product lines.

Share On

Also Read

casestudies
By rt360 December 15, 2019

Superior decision making with proactive alerts

Excerpt Top Indian bank radically reduces non-performing assets with an Early Warning System

Read More
casestudies
By rt360 December 15, 2019

Banking Agility Re-defined

Top Indian bank driving business growth through market responsive pricing calculator - Risk Adjusted Return on Capital (RAROC)

Read More