Let's take a second here and consider that many of compliance requirements could also:
1.) enable new product development that could drive value added services for their corporate clients, producing more top line revenue
2.) improve sales and servicing productivity that results in improved customer satisfaction and revenue.
The basic requirements for Basel III compliance are being able:
1.) to aggregate the necessary data from the appropriate sources in a timely and effective manner.
2.) to analyze and develop predictive insights from it
3.) to report the findings
The data and analytics challenge will vary by bank and some of the elements that come into play are:
1.) Is there an operational payments hub that includes all sources and uses of funds?
2.) If there is a payments hub, does it accept daily and real time transaction feeds?
3.) Are there analytic tools and expertise that can report, analyze, and enable predictive liquidity, marketing, sales and operational insights and forecasts?
4.) Does the bank have a single universal client facing portal for all corporate clients?
Let's stop here and think about the basic requirements for a liquidity management reporting solution. They are a system that can:
1.) collect data
2.) create information
3.) create decision support intelligence that is actionable
If we extend our thinking a little bit, we find these are the basic requirements that can satisfy the building blocks for solutions that can also enable:
1.) Improved customer and market intelligence for the bank and their corporate clients
Imagine being able to share real time sources and uses of funds from all channels with your corporate client!
Imagine being able to identify quickly cross selling opportunities by matching client profiles against derived standard service patterns!
Imagine being able to identify corporate clients at risk of leaving the bank!
Imagine being able to identify a client's top 10 sources and uses of funds by bank and by payee/payer as illustrated below:
Imagine being able to identify the entire bank's uses of funds by correspondent bank!
- This opens up all kinds of correspondent re-pricing opportunities and cross sales to existing corporate clients!
2.) Reduced risk and enable compliance for both corporate clients and the bank
Imagine being able to risk rate payment transactions with a high level of confidence!
Imagine being able to automatically re-price transactions based on capital use risk in a real time manner!
3.) Improved operational sales and service efficiency to improve customer satisfaction!
Imagine being able to perform a UPS-like status check on an individual payment!
Imagine being able to predict customer cash shortfalls, and then proactively sell appropriate credit products to bridge it.
Imagine being able to implement a customer servicing model based on the customer, not the product
- This opens the door to a completely new way of servicing the customer that drives bank productivity.
These are just a few of the use cases that leverage an integrated operational payments hub -- there are many more! Implementing BASEL III can yield big benefits for the bank and its customers