Information Technology Trend in Development Banks

Alberto Rosati Latin America Banking Business Development alberto_rosati@satyam.com

Prelude
The dramatic events ushering in the new centuryfrom globalization and a final, major wave of consolidation to regulatory changes and technology breakthroughsare compelling development banks[DB] to turn their focus toward efficiency and country relationship development.*

*Goliath Industry and Market Reports on Bank Systems and Technology

Is real IT transformation likely to take place?

Three converging forces appear to make it unavoidable: DBs spreading across geographies Financial transactions are commoditized Regulatory demands are unprecedented.

Drivers to IT transformation
The next 10 years will be defined by:

Accelerated expansion Process efficiency Greater Country sophistication More intense regulatory demands Opening up markets in existing and new member countries

Challenges Faced By Development Banks

DBs require real time system control on their operations DBs are unable to effectively track the development results The credibility of the financial reports becomes questionable Systematic Development Bank-wide management of data Risk measurement and management is becoming increasingly complex

Advantage IT
An effective IT Solution provide: Operational effectiveness, internal efficiency Collaborative tools to help create, cultivate, and disseminate knowledge.

Accessibility to data, information, and knowledge.

The ability to easily search across and retrieve relevant information

A project management system based on complete project lifecycle

A resource management system which improve linkages
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Plan for 21st Century IT Transformation

Focus on improving the internal efficiency and Country centricity Go horizontal Make the transition from banking operations in silos to an integrated organization. Balance objectives in IT strategy Balance the use of technology resources to support revenue growth Focus on governance IT to align with business strategy to improve returns on IT spending. Strategies addressing enterprise architecture, process automation and member analytics
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Need of the Hour

The information systems and technology infrastructure must be improved to:
support the results-based agenda and Align the systems with the new organizational structure. And to support DBs three major information systems initiatives: Knowledge management Project processing and portfolio management Program resource management
Latest Facts: World Bank IT strategy took the approach of building up integrated systems for sharing of information with member countries IFC has provided the user interfaces to access existing information, while gradually replacing the older mainframe systems IDB has developed facilities using portal technology to provide access to many disparate systems . IADB is planning for implementation of Integrated IT Roadmap to synchronizes their ORG structure ADBs initial portal applications are designed to provide access to knowledge management applications Source- ADBs information Technology Strategy and Capital Expenditure Requirements: 20042009 and IADB website

Identify the IT Role

IT enhances the capacity to review project processing and portfolio performance IT monitors performance against Millennium Development Goals IT facilitate tracking of activities and investments under development Initiatives IT systems provide the tools to report on project performance at each stage IT supports improved planning, management, and reporting on resource management IT supports documentation on study reports for evaluation and record lessons learned

Hot Solutions for DBs

A comprehensive solution should synchronize with business operations. Some of the latest solutions are: Lending Solutions with an eye and ear to the ground

Innovative Knowledge Management Solution

A comprehensive IFRS solution

An effective development outcome tracking system

Creation of Central Repository -Operational Data Store(ODS) Setting up of an extension of DBs IT Department in a cost effective professional atmosphere-Offshore Development Centers(ODC)
Source-IFC Capital Budget 2008

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e-Loan System

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Integrated Loan Administration Platform Loan Administration Database

Client Connection Loan Data Warehouse

Loan WEB, Loan Tracking System, Loan Database

Loan Administration System [LAS]

Other Systems Financial Database Controllers Data Warehouse

Loan Kiosk

LAS WEB, LTS, Loan Database

Loan System

Knowledge Management(KM)
Identify
Knowledge Discovery Tools Data Mining Test Retrieval/Mining

Diffuse/Use Collect/Codify
Information Feeds Intelligent Agents

Knowledge Database
Document Depositories (Data Warehouse)

Decision Support Groupware Video Conferencing

Create
Thinking Aids Conceptual Mapping

Infrastructure: Networks-Internet ; Intranet

Latest Facts: ADB A KM-framework was created in 2002.In June 2004 IT strategy was implemented. AFDBThe Banks knowledge management capabilities have been upgraded through the introduction of an Integrated Knowledge Management System via intranet and internet sites.

Source-Knowledge Management for Development Journal, Vol 1, No 2 (2005) and AfDB Annual Report 2005

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ODS Overview
ODS is a central repository for corporate-wide data sharing Data from transaction systems is loaded in the ODS Stores historic data from transaction systems Provides view for other systems for their central reference ODS-design establish an efficient mechanism to store and retrieve valuable business information.

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Advantage ODC
Infrastructure, Security as per clients Office Standards

Savings in capital expenditure

Retention of Knowledge - Business and Processes

Accountability for Productivity and Quality of Deliverables

Resources 100% dedicated to Program at a blended rate

ODC operating in a different time zone speed up development time

Flexible Pricing model (T&M, Fixed Price, Hybrid)
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Takeaways
Information on how IT mitigate DBs business challenges The universal high level IT roadmap Information on comprehensive IT Strategy Sharing of IT experience in developing solutions for Development Banks

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Alberto Rosati Latin America Banking Business Development alberto_rosati@satyam.com www.satyam.com 16