Monitoring Tools for the Banking Industry

Transcription

A Tango/04® Article
CONTENTS
Introduction……...…2
Business Challenges
and trends…………..3
Role of it in the
complex financial
world………………..4
Governance, risk and
compliance
monitoring………….4
Tango/04 solutions…6
Conclusion………….9
Many factors have contributed to transform the fierce competitive environment
that is the financial services industry, especially in banking sector, but the most
important ones can be: The explosive growth and use of Internet, new entrants
in the banking market and the avalanche of regulatory requirements. Therefore,
to be successful in this new landscape, banks will overcome these challenge,
finding the key differentiators through the right changes in the customer
experience, and operate its financial products and services as efficient as they
can. Proactive attitude reduces the risks and reactive responses, and creates a
culture of security and confidence
Introduction
During the last decade, banking activity has been very complex. Many factors have contributed to transform the landscape, but surely, executives agree in three main aspects: Internet factor, high competitive pressure over margins and the continue increment in new regulations. Additionally, we could incorporate other elements that present new challenges to the management: increased life expectancy requires new banking products and services, and new opportunities in markets like China and India, with millions of people to bankarized. But go back to the basics, and take a few minutes to review the following critical factors: • Internet The unprecedented growth of the Internet, even in emerging countries, give the people fast information access and create more pressure for financial institutions. Over the next years, the banking industry, specifically the retail segment, will be forced again to adapt rapidly to even more changing customer expectations. Customer diversity will influence how they perceive value, and it will change as a result of profound shifts in demographics. • High pressure on margins At present, than never before, reduce operating cost to protect margins is a common challenge for financial institutions. However, most financial 2|Page-
institutions cannot afford dedicated IT staff at every interaction point (e.g.: branch offices or ATM in the retail business). So, banks will need to think more intelligently about how to drive increased operational efficiency, using outsourcing, process changes, and new technology tools to reduce costs while enhancing the customer experience and innovation. • Regulatory Requirements Changing the Landscape Demands for transparency and supervisory pressure from regulators will increase. To comply with this trend, banks will need to take advantage of improving monitoring technologies and realize that security is about much more than preventing unauthorized access to their customers´ data and funds. Therefore, to be successful in this new competitive landscape, banks will need to overcome the new challenges and find the key differentiators and the competitive advantage through the changes in the way they design and operate their financial products and services, but also in the availability and security of the services more visible to customers. In this document, we describe the emerging priorities in the management of key information for the banks, with an emphasis on the security information, technology health and business services indicators. Monitoring Tools for the Banking Industry
Indeed Banks will have to focus on those initiatives that allow them to implement control mechanisms to manage the business dynamic evolution, manage different technological platform that support business processes and ensure a constant monitoring about the integrity and security of the confidential information. Finally, we want to foster a culture of security, control and monitoring that contribute not only to comply with requirements but to establish a new pillar to differentiate from the competitors and build customer loyalty. Business Challenges and Trends
Consider the following: Essentially, banking business is very simple. We give a bank our money to keep it safe for us, and then the bank turns around and gives it to someone else in order to make money for itself. In professional terms, banks receives deposits and offer loans and derive a profit from the difference in the interest rates paid and charged, respectively. However, everybody knows that the complexity rely in the multiple variety of type of banks, products, services, payment instruments, processes, controls, interaction point with customers, regulations, channels, etc. Some examples: If you are a business customer, you probably have utilized one of the different types of payment services that banks offer in the market. The payment business in critical for the banks, because it represent an important source of revenues. For this reason, is critical to understand the complexity of their processes in order to enhance the operational efficiency, reduce the associated risks and ensure the integrity of the transactions. Customer can initiate the payment transaction from different sources: Swift message, phone instructions, Internet, ATM etc. Payment operations involve numerous steps from initiation through clearing and settlement. 3|Page-
How the customer knows in real time that all transactions have been successfully completed? How can the payments manager spot delays or bottleneck? As we mentioned before, the payment business is one of the most important products but consider also collection services, trading and foreign exchange into the wide range of product, all of them with similar complexity in the corporate business. In the retail bank, in spite of maintaining availability of online banking, customer records and transactions is critical to retain customer loyalty, it is even more challenging to improve the availability of the rest of delivery channels (Call center, ATM, Self‐
service kiosks) as well as applications. Imagine if you want to get a personal loan, to operate with mutual funds or withdrawal cash from the ATM, every delivery channel represent a critical point in the relationship with the customers and the construction of loyalty. Similar situation we can find in securities companies or insurance, credit cards and mutual funds. Key note: Under this scenario, the near future model relies in the online model. If people do more transactions in the branch, this will have an impact on the banks´ backoffice infrastructure. Banks´ operational costs and business models rely on people going online. That helps the banks to reduce operational Monitoring Tools for the Banking Industry
inefficiencies, increases the revenues while reducing costs. In summary, how can implement an effective system for: - Monitor real‐time transactions to make sure that were completed in time and comply with correspondents SLA? - Control and report only the relevant performance indicators (KPI) that inform about business processes and IT infrastructure? - Ensure that banks have a complete and cost effective security controls and understand their own security risks? Role of IT in the Complex Financial World
As we mentioned before, the current scenario in the financial services industry is dynamic and challenging. The effective use of information technology is critical and can be a strategic weapon as well. IT is like a heart supporting the strategic objectives of the whole stakeholders. In order to achieve these objectives, IT should be managed from the point of view of the business rather than a technical one, in order to support a more effective management of costs and opportunities detection through a more efficient use of technology. Automation of different processes contributes significantly to improving productivity, accuracy and effectiveness. On the other hand, to enable the organization to manage its core business, selected measurement performance tools are critical too. Every business and IT manager have a common question: how to support rising business volumes without allowing costs to grow in parallel. Many of them have used a range of tactics such as centralizing shared‐services, automation of transactions and outsource of certain processes to reduce labour and transaction costs. Far fewer have taken the comprehensive approach of monitoring the entire operating model, with the aim of lowering unit costs while increasing quality and customer service. However, to be effective, systems must be able the provide the whole institution with the needed key information, such us availability of business services with SLA, usability of the channels and overall IT health. Active
and extensible monitoring approach
than to technical operational Under this complex environment where parameters. differentiation, innovation and new To demonstrate the value of such customer demands are critical to comprehensive monitoring approach, survive, financial institutions require to the deployment program must be reduce opacity over the business designed to ensure early wins. These management. Banks need to get a gains should then be used to show the clearer picture of their business, aligning program and broaden organizational different resources to gain operational support and commitment. efficiency and effectiveness at the enterprise level. To do this they need a monitoring For example, consider the following strategy more oriented to the business questions: services that the IT is supporting rather 4|Page-
How do financial institutions ensure cost control, profitability and innovation in this environment? How the demands of the regulators, business risk controllers and IT team can be aligned with security and integrity information management? What types of indicators are necessary to be measured? And why? To answer these key questions, active monitoring is an imperative for the innovative banking institutions. The use of automated software tools help the financial institutions to collect performance information, improve the analysis capability, facilitate collaboration as well as knowledge sharing across the whole company. THREE LEVELS OF CONTROL A changing regulation landscape, increased product and service offerings, and intense competition make financial services one of today’s most dynamic industries. Now more than ever, the ability to manage growth, control margin, and respond rapidly to change is crucial and the business success depends on the agility of the company to execute its mission critical processes consistently and efficiently. In addition to these challenges, banks need to balance the need for cost 5|Page-
reduction with the requirements for higher levels of service and new portfolio offerings. With monitoring tools for Financial Services, institutions can anticipate improvements in efficiency, customer satisfaction, and overall visibility. We define three levels of control: Information Technology: In order to serve more efficiently their customer base, banks have to monitor IT availability, more proactively, extracting real‐time operational and give immediate visibility at all level of organization through multiple business views and dashboards. Information Security: Managing data security and integrity in today’s technology landscape is much more complex due to a combination of factors such as growing severity of security attacks, new regulatory requirements and increased exposure to risk of data damage from insiders. Business performance: If your bank has a clear business strategy, relevant performance indicators can be collected to inform strategic decision‐making at all level of the organization. Management can improve the speed and effectiveness of business operation by providing real‐
time access to actionable business performance indicators Monitoring Tools for the Banking Industry
Tango/04
Solutions
Monitoring only the IT infrastructure is just not enough. The level of complexity of the financial sector is growing daily generating new challenges and more stress to IT executives. This is where our solutions make a difference and add value to the business processes of financial institutions. Hardware device manufacturers have incorporated new features in each that allow monitor and control the specific operation of each component. critical information in context as well as cover not only technical issues but give insights from the critical transactions and services. In a technological environment under constant evolution, the Tango/04 solutions provide greater visibility and control processes through three key elements: 1. Flexibility: new regulations (national and international) are requiring from companies greater efforts of IT department constantly. 2. Pro‐active management: Security and compliance will not be considered as a burden but as an opportunity, anticipating and mitigating risks through controls in real time and relevant reports
3. Sustainability, which is achieved through automated controls, a simple and intuitive handling of the tool centralized in a single console that supports multiple platforms. However these controls operate very isolated from each other and are insufficient to ensure a smooth operation of business processes that require answers and results in real time. Also, they are unable to answer simple questions from users or managers where an incident or problem is detected: • Application has fallen. What happened? • What kind of component made the failure? Is a hardware or software problem? • Which services are affected? • What is the response time of the application? Our approach gives companies tools to answer these questions in an agile, fast and secure way. Our new approach to monitoring banking operations and their critical business processes and services allows companies to improve their monitoring strategy by centralizing and displaying 6|Page-
What 1‐2‐3 stand for? 1 – INFRASTRUCTURE: Control the health of your entire IT Infrastructure: A monitoring solution to manage your IT operations must simplify your life. 2 – SECURITY: The most reliable, real‐
time, multiplatform software available for monitoring your security control plan: In today's world of pervasive data use, real‐time alerts and the ability to execute automatically predefined actions are essential for compliance and for safeguarding your corporate information assets. 3 – APPLICATION & BSM: Business Service Management (BSM) is a new discipline that makes explicit the relationship of IT elements (hardware, communication lines, databases) and the business services that they support Monitoring Tools for the Banking Industry
(Sales, Billing, CRM, SCM, etc.), enhancing the ability to effectively manage the infrastructure within a business context. Description Tango/04 software solutions help your organization to achieve its service level agreements through the automated management and control of all your systems, applications and business services. The following picture shows the variety of sources of information and the outputs from Visual Messenger Center, the flagship product of Tango/04 Computing Group. VISUAL Message Center is a single and extensible solution that provides monitoring of multiple platforms in a single console. Further, VISUAL Message Center offers organizations the ability to monitor their Security, Operations and Business Services in a single solution, reducing the Total cost of Ownership dramatically. Even better, VISUAL Message Center offers companies the flexibility to start monitoring what is most critical to their business in the first phase and to add additional controls in any order, at any time in subsequent phases. Main capabilities To deliver value‐based solutions for financial services sector, Tango/04 includes the following capabilities: I ‐ High visibility trough different enterprise views (see picture 1) 7|Page-
II – SmartConsole is the graphical interface that provides you with a central point for consolidating, monitoring, collecting, diagnosing and responding to events from any system or service in your enterprise. (see picture 2) III – Real Time alerts through e‐mail, SMS or preconfigured corrective actions (see picture 3) Main differentiators Early wins and agility in modeling and implementation process Ease to use through a smart console Multiple visibility levels across enterprise views, dashboards and reports Designed with scalability and extensibility in mind, Tango/04 solutions allow comprehensive management of governance, risk and compliance concepts. Benefits Improve IT efficiency Identifying the dependencies between business processes and IT elements helps to reveal on business of an Monitoring Tools for the Banking Industry
outages or slowdown, enabling the IT department to prioritize tasks according to business needs. Increase availability Actual uptime of business processes increases because IT can concentrate first on resolving issues that affect business, rather than on events that affect infrastructure but have little or no economic impact. Satisfied end‐users Timely and effective management of IT issues leads to greater user productivity Improved communications between IT and business managers Tango/04 helps everyone to speak the same language and work together towards the same goal. For example, line managers get a better understanding of how the 8|Page-
technological infrastructure support their activities , understand the impact of any changes, and make educated decisions to maximize benefits CONCLUSION As we mentioned in the main title of this white paper “Monitoring tools for the Banking sector”, these tools are useless without a clear support and commitment of the whole company. Senior executives must to establish a complete security program involving not only technology but also processes and people. Planning, active monitoring, measurements, education and training are some of the main activities that banking institution have to follow to implement a successfully security management program.
MORE INFORMATION For the latest information about our solutions and services, please see the following resources: www.tango04.com Related White Papers Sustainable SOX Compliance Made Easy. This White Paper explains the methodology of sustainable compliance and examines how the Tango/04 automated solution set can help you easily with SOX. 2007 About Tango/04 The Tango/04 Computing Group is a leading developer of Infrastructure and Security Monitoring, Reporting and Business Service Management solutions. Tango/04's software solutions help companies of all sizes to reach their increasingly demanding business and IT service levels goals by monitoring, securing, controlling and improving IT infrastructure, business services and security compliance requirements. Established in 1992, Tango/04 has a wealth of experience in providing tailor-made
monitoring solutions to companies in any industry with more than 1500 customers
and operates throughout the world through its network of 35 business partners.
Tango/04's
Luxembourg,
customers
Bacardi,
include:
ABN
BankBoston,
Amro,
Banque
Auchamp,
Rotschild,
Aseval,
Banque
Bridgestone
de
Firestone,
Santander Bank, Capgemini, CelTel, Certegy, Coca-Cola, Carrefour, Dole Fresh Fruit,
D&G, EDS, FootLocker, Fortis Bank, Genesis MetLife, Gucci, Manpower, ING, Nike,
Citibank, Prada, Shell, Stratapult, Telmex y Universal Music.
9|Page-

Monitoring Tools for the Banking Industry

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