Sure Prevention is Better than Cure

Ill-gotten money often gets circulated in ways that obscure its true source. The effort that goes into ensuring this is referred to as “money laundering.” There are measures in place that aim to prevent such spurious activities, risk-based anti-money laundering software being one of them. However, its efficacy and that of other internal bank processes and regulations in preventing frauds is worth scrutinizing.
Before the advent of sophisticated banking technology, banks had simplistic processes and protocols. An introduction of a prospective customer by an existing one usually sufficed for opening a new bank account. Alternatively, the prospective customer had to furnish the requisite documents for identification and address proof, as also any other specific details pertaining to the nature of the account to be opened. The RBI’s KYC (Know Your Customer) guidelines are an extension of this very concept, albeit digitized and more streamlined. Despite the stringent norms, audits and regulations, there remain instances of fraud and forging of documents.

The various channels such as ATMs, mobile and internet banking have facilitated faster and simpler transactions. At the same time, they have also created more opportunities for systems and processes to be misused. It would be wrong to blame technology for these shortcomings. Instead, a concerted effort in the right direction can incapacitate any attempts at misusing the system for wrongful gains.
New regulations mandate that cash receipts above a certain value be reported to regulatory authorities. Swindlers circumvent this by simply opening multiple bank accounts to make smaller-value deposits.
The ideal AML system should impede opening of fraudulent accounts which can lead to counterfeit transactions. By preventing infusion of black money into the system, a host of unlawful and detrimental activities such as arms trade, terrorism, drug trafficking etc. can be checked. It should also ensure that all high-value transactions are kept transparent and traceable to the extent possible. Proceeds of matured fixed deposits exceeding the predetermined amount must be paid through cheques or credited to the customer’s operative account, thus minimizing cash transactions.
Existing AML systems have incorporated processes for customer due diligence, monitoring suspicious transaction patterns and so on. Possible scenarios based on past frauds are also assimilated into the system to prevent future occurrences. While some of the AML software monitor the transactions post occurrence in the core banking system (offline transactions), some others issue real-time online alerts that allow precautionary measures to be taken immediately.

Banks, regulatory bodies and software providers work tirelessly to ensure transparency and prevent crime and fraud in the banking system. However, banks tend to get overzealous when it comes to expanding their customer base. This increases their vulnerability, making it easier for unscrupulous elements to take advantage. Stringent checks, smart and intuitive processes and vigilant staff can help detect anomalies in banking transactions and raise a red flag when things are amiss.

CRM Soars to the Cloud

Globalization brought in its wake the dictum “customer is king.” A couple of decades, slowdowns and recessions later, companies still subscribe to this decree. So much so, that it has spawned an entire business – Customer Relationship Management (CRM) – in a bid to engage this all-important asset, the customer.
CRM refers to the whole gamut of solutions facilitating a company’s interaction with its existing and prospective clients. By simplifying processes and aiding in decision making, a sophisticated CRM solution can steer an enterprise towards success.
Maintaining customer databases and servicing customers are the primary functions of a bank CRM solution. Analyzing data and using it optimally for campaigning, devising offers for specific target groups or streamlining the sales process, are some of the adjunctive ones. It also serves as a tracking tool for managers to efficiently oversee the operations of their teams and to identify and fix any weak links.
Traditional CRM solutions are typically contained within the premises of the bank, accessible only from within its physical boundaries. The benefits of taking this to the cloud are innumerable.
Given the flexibility afforded by the cloud, banks can be selective about the extent of data they transition to it. They can retain customer data by availing cloud services in SaaS (Software as a Service) mode.
Specific modules can be put on cloud and usage enabled by sharing User IDs and passwords. Any updates to the existing modules can be executed centrally with the updated version put on the cloud, which will remain accessible to the bank. The update notification can be sent to the concerned individuals. Also, the bank’s customized settings for a particular application can be updated and saved on the cloud.
Supplementary solutions like alerts, reports etc. can be integrated centrally, with access restricted by user IDs, much like the current licensing mechanism. This principle can be extended across modules, where multiple IDs and passwords for different solutions can be merged into a single ID and password, similar to the accounts linked to one Internet Banking user ID and password.
Need-based access can be created for various functions. Customer care representatives can access their log items from cell phones while managers can similarly monitor their team of representatives remotely. Additionally, data analytics is also made possible from remote locations.
The low implementation and running cost – for maintenance, security, updates and so on – makes it affordable, thus attracting smaller banks to opt for this model. With no dearth of service providers, banks can switch between them easily.
Until the services are actually used, service providers may earn a recurring regular income, rather than capital receipts. The providers in turn, would charge banks a service fee.
Coordinating CRM with social media channels helps connect with those customers who may have shared their experiences and opinions about the bank in question. Given the large user base of these channels and the fact that new channels and tools are added continually, it makes business sense for the bank to integrate SaaS with these social media sites to store this information on the cloud, rather than in a local database.
The customer is central to an enterprise’s success and CRM helps bolster existing customer relationships and foster new ones and also helps to devise ways to combine people, processes and technology to achieve “customer delight.” Cloud CRM does exactly this, but by breaking away from the shackles of a physical location and moving to an Internet-based environment where data can be retrieved at any time and from anywhere.