Banking and Financial Services Supported by ECM

Prepared By:
Prof. Shivasharana Prof. Jayalakshmi. N. A. Prof. Mahalakshmi. C.H MCA, MBA, M.Phil, (PhD) MBA, M.Phil, (PhD) Faculty, Dept. of MBA Research Scholar, Research Scholar, M.S.Engineering College Rayalaseema University, Kurnool, Rayalaseema University, Kurnool, Bangalore562110. Head and Professor, Dept. of MBA, Faculty Dept. of MBA M.S. Engineering College, M.S. Engineering College, Bangalore 562 110 Bangalore 562 110 Mobile 09845409437 Mobile 09742876086 E-mail sharana_marnur@yahoo.co.in E-mail -jayalakshmi305@gmail.com

ABSTRACT The financial services sector plays a critical role in any modern economy. The bundle of institutions that make up an economys financial system can be seen as the brain of the economy, providing the bulk of the economys need for many functions. Financial services have become increasingly internationalized over the years. The presence of foreign financial services providers in national markets has grown significantly in the last two decades. Financial services have become increasingly internationalized over the years. The presence of foreign financial services providers in national markets has grown significantly in the last two decades. The service industry forms a backbone of social and economic development of a region. It has emerged as the largest and fastest-growing sectors in the world economy, making higher contributions to the global output and employment. Its growth rate has been higher than that of agriculture and manufacturing sectors. It is a large and most dynamic part of the Indian economy both in terms of employment potential and contribution to national income. It covers a wide range of activities, such as trading, transportation and communication, financial, real estate and business services, as well as community, social and personal services supported by ECM. Keywords: Banking services, ECM, Financial services.

Introduction:
Financial services are the economic service provided by the finance industry, which encompasses a broad range of organizations that manage money, including credit unions, banks, credit card companies, insurance companies, consumer companies, stock brokerages, investment funds and
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some government sponsored enterprises. As of 2004, the financial services industry represented 20% of the market capitalization of the S&P 500 in the United States. The term "financial services" became more prevalent in the United States partly as a result of the Gramm-Leach-Bliley Act of the late 1990s, which enabled different types of companies operating in the U.S. financial services industry at that time to merge. Companies usually have two distinct approaches to this new type of business. One approach would be a bank which simply buys an insurance company or an investment bank, keeps the original brands of the acquired firm, and adds the acquisition to its holding company simply to diversify its earnings. Outside the U.S. (e.g., in Japan), non-financial services companies are permitted within the holding company. In this scenario, each company still looks independent, and has its own customers, etc. In the other style, a bank would simply create its own brokerage division or insurance division and attempt to sell those products to its own existing customers, with incentives for combining all things with one company... The primary operations of banks include: the (Banking services)

Keeping money safe while also allowing withdrawals when needed Issuance of checkbooks so that bills can be paid and other kinds of payments can be delivered by post Provide personal loans, commercial loans and mortgage loans (typically loans to purchase a home, property or business) Issuance of credit cards and processing of credit card transactions and billing. Issuance of debit cards for use as a substitute for checks. Allow financial transactions at branches or by using (ATMs). Provide wire transfers of funds and Electronic fund transfer between banks. Facilitation of standing orders and direct debits so payments for bills can be made automatically. Provide overdraft agreements for the temporary advancement of the Bank's own money. to meet monthly spending commitments of a customer in their current account. Provide internet banking system to facilitate the customers to view and operate their respective accounts through internet.
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Provide Charge card advances of the Bank's own money for customers wishing to settle credit advances monthly. Provide a check guaranteed by the Bank itself and prepaid by the customer, such as a cashiers check or notary service for financial and other documents. Accepting the deposits from customer and provide the credit facilities to them.

The Indian Banking and Financial services industry has undergone a metamorphosis since 1990. During the late seventies & eighties, the Indian financial services industry was dominated by commercial banks and other financial institution which cater to the requirements of the Indian industry. The economic liberalization has brought in a complete transformation in the Indian financial services industry. The term Financial Services in a broad sense means mobilizing and allocating savings. Thus it includes all activities involved in the transformation of savings into investment. The financial service can also be called financial intermediation. Financial intermediation is a process by which funds are mobilized from a large number of savers and make them available to all those who are in need of it and particularly to corporate customers. Thus, financial service sector is a key area and it is very vital for industrial developments. A well developed financial services industry is absolutely necessary to mobilize the savings and to allocate them to various investable channels and thereby to promote industrial development in a country. Financial services, through network of elements such as financial institution, financial markets and financial instruments, serve the needs of individuals, institutions and corporate. It is through these elements that the functioning of the financial system is facilitated. Considering its nature and importance, financial services are regarded as the fourth element of the financial system.

PRESENT SCENARIO OF Banking and FINANCIAL SERVICES

Conservatism to dynamism: At present, the financial system in India is in a process of rapid transformation, particularly after the introduction of reforms in the financial sector. The main objective of the financial sector reforms is to promote an efficient, competitive and diversified financial system in the country. This is essential to raise the allocative efficiency of available savings and to promote the accelerated growth of the economy as a whole. The emergence of various financial institution and regulatory
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bodies has transformed the financial services sector from being a conservative industry to a very dynamic one and to be more enhancive it should be supported by ECM software such that all the banking and financial services provided to the customers can be more faster and accurate. Emergence of Primary Equity Market: The capital markets have become a popular source of raising finance. The aggregate funds raised by the industries have gone from Rs. 5,976 crores in 1991-92 to Rs. 74,043 crores in 2011-12. Thus the primary market has emerged as an important vehicle to channelize the savings of the individuals and corporates for productive purposes and thus to promote the industrial& economic growth of our nation. Concept of Credit Rating: The investment decisions of the investors have been based on factors like name recognition of the company, reputation of promoters etc. now, grading from an independent agency would help the investor in his portfolio management and thus, equity grading is going to play a significant role in investment decision making Now it is mandatory for non-banking financial companies to get credit rating for their debt instruments. The major credit rating agencies functioning in India are:

Credit Rating Information Services of India Ltd. Credit Analysis and Research Ltd. Investment Information and Credit Rating Agency. Duff Phelps Credit Rating Pvt. Ltd.

ECM supports to certain extent in decision making regarding the above. Process of Globalization: The process of globalization has paved the way for the entry of innovative financial products into our country. The government is very keen in removing all obstacles that stand in the way of inflow of foreign capital. India is likely to enter the full convertibility era soon. Hence, there is every possibility of introduction of more and more innovative financial services in our country by ECM.
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Process of Liberalization: The government of India has initiated many steps to reform the financial services industry. The Government has already switched over to free pricing of issues from pricing issues by the Controller of capital issues. The interest rates have been deregulated. The private sector has been permitted to participate in banking and mutual funds and the public sector undertakings are being privatized. The financial service industry in India has to play a positive and dynamic role with the help of ECM in the coming years India has to play a positive and dynamic role in the years to come by offering many innovative products to suit to the varied requirements of the millions of prospective investors spread throughout the country and can be done only through certain softwares like Enterprise content management. Financial services industry is the mainstay of any economy as it mirrors the financial health of the country. Indian financial markets are highly regulated with different authorities keeping an eye on every avenue of financial sub-segments viz. Stock markets, mutual funds, insurance and banking. Stock markets are regulated by Securities and Exchange Board of India (SEBI) while Insurance Regulatory and Development Authority (IRDA) keeps an eye on the insurance industry. Similarly, Reserve Bank of India (RBI) keeps a check on the Indian banking sector and Association of Mutual Funds in India (AMFI) takes care of the mutual fund segment. India boasts of a Rs 23, 000 crores (US$ 4.44 billion) - financial services distribution and advice market. Recent developments, Government measures, key facts and figures pertaining to the same are discussed hereafter. These sectors should better understand the benefits of ECM softwares such that they are more productive.

Market Description (The Prospect):

The Banking and Financial Service sectors provide significant opportunities for Document Imaging software and hardware including document scanners as the market is currently paper driven and prospects are looking for ways to improve their existing manual processes. This sectors includes numerous prospects including the following: Large banks, Community banks,
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 Credit unions, Brokerage firms, Accounting firms, Financial investment firms, and Check cashing facilities Business Drivers:

The banking and financial service sectors have relied heavily on microfilm technology to image business documents and checks. Today these organizations are seeking technological advancements to replace out of date and inefficient microfilm. Service contracts for microfilm are almost cost prohibitive today so alternative technology, such as document imaging, is in high demand.

The worldwide web is the dominant means of information access and delivery. The internet is a dominant and viable means of business communication. Banking and financial service organizations are looking for ways to leverage the internet to accelerate their business processes.

Banking and financial service is an extremely competitive business. In recent years there have been numerous acquisitions in an effort to eliminate competition and expand customer base. In this competitive industry the bank or financial service organization that is first in service will often get the business. For example, the bank that processes your loan application the fastest will likely be the bank that wins your business. Banks and financial service organizations are looking to apply technology to process documents faster, to improve internal operations, to improve customer service and to expand their competitive advantage.

Many banks and financial service organizations have branch offices in major metropolitan areas.. The cost for office space in these areas is extremely expensive. These organizations are looking for ways to reduce physical storage costs by eliminating storing paperbased documents.

In a time when there is a worldwide economic slowdown, all organizations today are looking for ways to cut costs, to do more with less resources and in general to streamline their business operations.

Due to recent corporate improprieties, the banking and financial service sectors are subject to numerous guidelines established by regulatory bodies such as the Security and Exchange Commission, the Ministry of Finance, and the International Accounting Standards Committee.

These guidelines define how banking and financial service organization must manage their business information. [ An example of this can be found in a U.S. regulatory guideline referred to as Gram-LeachBliley. In section 12 CFR Part 30 it states each bank shall identify reasonably foreseeable internal and external threats that could result in unauthorized disclosure, misuse, alteration, or destruction of customer information or customer information systems.] The highly visible Sarbanes-Oxley Act requires banks and financial service organizations to have an audit committee to validate the accuracy of their financial reports. The Chief Executive Office of these organizations is held personally responsible for the accuracy of their data. Stiff fines and prison terms have been imposed for fraudulent entries and the intentional disposition of business documents. Central to these guidelines are three things: Data accessibility, Ensuring the privacy of customer information, and The physical protection of data. As a result these organizations are looking for technology that can help them manage data more efficiently, that can track access to data, and to ensure the physical protection of data should they need to recover from any type of data storage disaster.

 These organizations are looking not only for a return on the investment but they are also concerned with the total cost of failure.

The Financial Document Imaging Solutions:

The solution to help banks and financial service organizations to address these business drivers is Enterprise Content Management (ECM), including the critical document imaging component, as it enables them to capture, manage, store, preserve and deliver information and documents related to business and organizational processes. When it comes to navigating the waters of todays financial services market, manual business processes might leave you hung out to dry. Thats why its crucial to have a powerful enterprise content management infrastructure that helps you navigate changing regulatory requirementsand leaves you in a better competitive position overall. With over 4,000 installations in RIA firms, broker-dealers and community banks worldwide, ECM is the preferred choice for the financial services industry. ECM combines flexibility over filing, repository design and workflow for individual departments and offices with secured access to a central repository. ECM makes information easy to find and use, while automating resourceintensive business processes and integrating with business-critical applications including CRM systems, accounting applications, core banking applications and more. The result is convenient, comprehensive and compliant enterprise content management that helps financial services organizations succeed against a backdrop of increased regulatory oversight, shrinking margins and market volatility. Extend service to an expanding membership base with an ECM infrastructure that automates resource-intensive business processes.

Streamline the Lending Process Accelerate Audits while Reducing Compliance Costs Improve Member Service

ECM has become an indispensable component of day-to-day operations for banking and financial services
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RIAs(Rich Internet Application) Create a flexible, standardized system for managing client information, company records, correspondenceeven e-mailin a way that's convenient, comprehensive and compliant.

Automate Resource-Intensive Business Processes Integrate with CRM Systems to Find and Use Information More Quickly Improve Client Service

Independent Broker-Dealers Support business process management improvements, saving time and money while reducing security risks.

Automatically Onboard New Accounts Automate Transaction Processing, Suitability Approval and Exception Processing Automate E-mail Surveillance and Archival

Community Banks Provide an ECM infrastructure that meets the needs of multiple departments while controlling information and allowing staff to focus on customer-facing pursuits.

Accelerate Audits While Reducing Compliance Costs Streamline Lending Improve Branch Management

ECM at Work for Financial Services

By serving as the universal repository for all organizational content, ECM provides a single point of control for centralized administration, making content as secure as it is accessible for everyday business and headache-free audits. By acting as integrative middleware that links to CRM systems, accounting applications, legacy systems and more, ECM allows users to access information in the manner and environment in which they are most comfortable.
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By serving as an enabler of shared services, ECM eliminates departmental data silos and automates cross-functional activities to simplify, streamline and accelerate business processes, such as maintaining compliance logs, opening new accounts and speeding up audits. By effectively balancing the need for both central control and local flexibility, ECM enables organization to set best practice standards and security policies while at the same time giving departments and business units the ability to store information and configure business processes according to their everyday needs. For credit unions, high member satisfaction rates combined with the slow economic recovery are creating even greater opportunities for future growth. But its impossible to extend service to an expanding membership base without having a clear plan for enhancing efficiency across the organization. Leveraging technology is a clear path to success. From loans to new accounts, enterprise content management provides the departmental flexibility and central control necessary to automate and streamline resource-intensive business processes. By eliminating the time spent locating misfiled documents, distributing information and making copies, you provide quality services for your memberswithout hiring additional staff. ECM simplifies loan processing and underwriting by eliminating the tasks that slow staff down, such as manual data entry, filing and photocopying.ECM automatically performs specified actions at appropriate times, such as filing newly created loan applications into appropriate folders, populating template fields and e-mailing documents to identified users for review and approval.

Electronically route a members loan application file through the origination, closing and funding processes. Automatically populate member or loan index information to reduce manual data entry. Track missing or expired documents to ensure compliance and reduce risk. Retrieve documents pertaining to any relationship based on any one of a number of different indexes, including loan number, SSN or EID, document type or collateral description.

Strengthen loan administration procedures in case of an audit or other examination.

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About ECM
What is ECM? ****Not to confuse with Electronic Counter Measure Enterprise Content Management (ECM) is a formalized means of organizing and storing an organization's documents, and other content, that relate to the organization's processes. The term encompasses strategies, methods, and tools used throughout the lifecycle of the content. The Association for Information and Image Management (AIIM) International, the worldwide association for enterprise content management, defined the term Enterprise Content Management in 2000. AIIM has refined the abbreviation ECM several times to reflect the expanding scope and importance of information management:

The present ECM

Enterprise Content Management (ECM) is the strategies, methods and tools used to capture, manage, store, preserve, and deliver content and documents related to organizational processes. ECM covers the management of information within the entire scope of an enterprise whether that information is in the form of a paper document, an electronic file, a database print stream, or even an email. ECM combines components which can also be used as stand-alone systems without being incorporated into an enterprise-wide system. The five ECM components and technologies were first defined by AIIM as capture, manage, store, preserve, and deliver.

ECM is supported by Forms processing for processing documents associated with loans for new cars or mortgages. Forms processing can be used to scan and extract data from either typed or handwritten text. Advances in this technology allow organizations to process forms with either structured or
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unstructured data. Implementing this technology for transaction processing can reduce cycle time from weeks to literally hours. Archive and retrieval can assist by converting paper-based document such as customer records, human resource records, signature verification cards, safe deposit contracts, and wire transfer documents into electronic documents that can be archived. These electronic documents can be searched and retrieved for viewing or printing. Accessing electronic documents is much faster enabling bank and financial service organizations to be more forthcoming with their business information to assist with regulatory compliance. Document distribution can be used to electronically distribute documents using the internet eliminating the time and resources required to fax documents. Additionally, this can be used for redundant off-site storage to ensure the physical protection of data. Enterprise Report Management, formerly called Computer Output to Laser Disk (COLD), can be used to move data off of expensive host computers into Local and Wide Area Networks where supporting paper documents can be scanned and managed with this data. Business Process Management, formerly call Workflow, can be applied to automate business processes by routing electronic documents to appropriate departments or individuals to expedite the approval processes. Image Enable Software, gives banking and financial service organizations the ability to add scanning and document management functionality to existing line of business applications and business processes such as teller and mortgage lending processes. This gives them the ability to implement document imaging without having to change the way employees are use to doing their jobs. The recent Check 21 initiative, making an Image Replace Document the legal equivalent has escalated Check/Remittance Processing for banks, financial service organizations and retail stores. These organizations are looking for scanning technology in order to image the check at the earliest stage
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of the process. This may include at tellers station or even at check out facilities in retail and grocery stores. The Benefits: Implementing document imaging technology in the banking and financial service sectors can yield many benefits such as: Faster access and retrieval of documents associated with customers, employees, and transactions to improve customer service and expand their competitive advantage. Track access and manage information more efficiently to assist with regulatory compliance guidelines for protecting and ensure the privacy of information. Leverage the internet to enable better business to business communication and better business to consumer communication.

Return on the Investment:

_ In addition to the business improvement benefits there are many tangible returns on the investment banking and financial service organizations will achieve from implementing document imaging. These include the following: Cut costs associated with the labor required to manage paper-based transactions. In many cases organizations have increased productivity with the equivalent or less staff members. Another major cost savings is associated with the reduction of physical office space by eliminating storing paper documents. Many investment firms have been able to facilitate additional brokers by using the space previously occupied by filing cabinets. By reducing processing time organizations can increase the volume of transactions and revenue. This also facilitates improved customer service and overall customer satisfaction.
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 As a result of managing their business information more efficiently, these organizations can be more forthcoming with their business documents to assist with regulatory compliance. This reduces their risk of potential fines and penalties. The ultimate ROI is the result of redundant off-site storage ensuring business continuity should they experience any type of data storage disaster.

Market Potential
_ Market data for the overall potential of Enterprise Content Management is very diversified. There are several studies indicating the market is healthy but there is tremendous discrepancies in the size of the market. A recent study by the Gartner Group (used by AIIM) indicates the market is 3 billion. AMR Research predicts the overall information technology opportunity created by the need for compliance will reach 80 billion over the next five years. The banking and financial service sectors are most impacted by the need for regulatory compliance. A study by AIIM International indicates the Compound Annual Growth Rate for the combined Banking and Financial Service Sectors is 51% of the overall market Fujitsu solution to address include: Signature Cards for Transaction Verification, Redundant Off-Site Storage for Disaster Recovers, and Transaction processing for Mortgages.

Future applications the solution will be applied to address include: Safe Deposit Contracts and Wire Transfers.

American Savings Bank has reported numerous returns on their investment including:
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A reduction in the time to access documents from hours to seconds, Access to images that are always legible, Improved customer service, Data protected for business continuity, and Access to information more quickly to assist with regulatory compliance.

Why ECM? Competition, mergers, and regulation within the financial services industry have led to dramatic changes in the way that banks and credit unions conduct business. Historically, transactions were the main priority of lending institutions. Now, banks, brokers, mortgage companies, and credit unions find themselves responding to constantly-changing customer needs. Institutions are likely to concentrate on cross-selling, up-selling, improving access to data, and other activities that strengthen the customer relationship. To be successful in a competitive marketplace, lending institutions require tools that enable them to gain a complete overview of their customer transactions. Usually, this involves the ability to access information that is housed in legacy systems and to search both structured and unstructured data. At the same time, they must demonstrate strict adherence to regulatory compliance mandates. Organizations with paper-based processes are at a severe disadvantage when it comes to efficiency and productivity. At the same time, lending institutions that have transitioned to electronic processes without considering interoperability may not be getting the most out of their investments in technology. Fortunately, enterprise content management (ECM) software has evolved to serve the needs of banking and finance organizations in their efforts to optimize customer service, address regulatory responsibilities, and improve accessibility to information. Other Resources of Information: *Main Reference: Fujitsu Scan Partner References Wikipedia The following references may further add value to the paper _ The Banking Administration Institute: www.bai.org
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_ The Association of Information and Image Management: www.aiim.org _ The Association of Records Management Professionals: www.arma.org-The IBEF Periodicals referenced include: _ Business Solutions Magazine _ e-Doc Magazine _ Document Imaging Report _ Bank Technology News _ Faulkner and Gray Report

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