ABN AMRO banks on IT to care for its customers

Whether it’s video-conferencing with its customers or reaching out to them on their cell phones, IT is the nerve centre of activity in ABN AMRO Bank. CHITRA PADMANABHAN finds out how the bank has leveraged technology to weather stiff competition

A robust core banking application has enabled ABN AMRO to launch initiatives exclusively meant for the convenience of customers, says Meera Sanyal

The late 90s was a period when the banking sector was undergoing extensive transformation. Newly emerging private sector banks and foreign banks were slowly gaining ground. It was in this scenario that ABN AMRO Bank decided to acquire Bank of America’s consumer banking division. This strategic move gave a major lift-off to the bank’s retail banking operations through the newly acquired customers of Bank of America. As a natural progression, the bank had the task of servicing the additional customer base from Bank of America, which also resulted in the rethinking of its IT strategies. "Acquisition of Bank of America’s consumer banking division needed a lot of reworking on the IT front in order to cater to the whole new set of customers," says Meera H Sanyal, managing director for ABN AMRO’s central enterprise services centre.

Sensing this trend, practically every bank was looking at ways and means to spruce up its IT initiatives to be at par with technologically savvy banks.

How it all began
Established in 1920 in India, ABN AMRO Bank has had a long-standing presence here as a corporate bank, but it ventured into consumer banking in 1991—after the merger of ABN and AMRO worldwide, eight years prior to the Bank of America merger.

Post-merger
After acquiring Bank of America’s retail customers, ABN AMRO had the critical task of collating the databases of both the banks. In order to function as a single entity it was important to transfer all data to one common repository. Another task at hand was the Y2K transition, for which significant funds were already set aside. Looking beyond the bank’s immediate needs, the management decided to further go in for a core application, which was imperative for the smooth functioning of the merged unit. "Market trends were indicative of the fact that customer service would emerge as a key differentiator in the long run. So it was important to place IT at the core of the bank’s functionality rather than looking at it as a separate entity," opines Sanyal.

Vendor scouting
ABN AMRO was on the threshold of a very competitive space, which induced the top management to draw a meticulous plan outlining long-term objectives. "We were looking for a robust and scalable system that would enable straight-through processing and support all data, as and when we add products and services and increase our customers," says Sanyal. After reviewing a host of banking products ABN AMRO chose Infosys’ core banking product Finacle as it met most of its needs. The implementation was completed at 11 locations in a record time of 10 months between January and October 2001.

Key benefits
With the core application in place, the bank was all set to churn out its various products and services on the Finacle platform. Right from inception, the bank always took notice of the fact that mere deployment of state-of-the-art technologies would not help them tackle competition unless the technologies were put to proper use. "We wanted the IT initiatives undertaken by us to percolate to the level of the customer," says Sanyal. Bearing this in mind, ABN AMRO launched its Net banking initiative in January 2002 as a key non-branch delivery network, powered by BankAway, another Infosys offering. Finacle acts as the back-end solution at ABN AMRO and provides online customer information to BankAway.

The subsequent period saw a lot of activity on the IT front. For instance the bank has launched its rewards scheme called ‘Royalties’ for accountholders who make use of all electronic access points, namely ATMs, net banking, phone banking and debit card usage. Under the programme, a customer earns reward points by carrying out financial and non-financial transactions over these channels. This initiative is basically meant to encourage customers to make use of the various delivery channels provided by the bank. "We decided to launch the rewards programme in order to provide incentives to customers for using our delivery channels, which also meant significant cost savings for us," says Sanyal. The entire rewards scheme programme is technology-oriented—the systems track the usage of various delivery channels by the customer and accordingly allot points in tune with the volume of the transaction. Tracking the usage of various channels manually, without a proper system in place, would have been a Herculean task. "A robust core banking application has enabled us to launch initiatives exclusively meant for the convenience of customers," says Sanyal.

ABN AMRO’s ‘Mpower’ initiative, a mobile phone-based payment platform, enables customers to make and accept payments through their mobile phones by the bank. "It is an SMS-based service offering users and merchants the convenience of buying and selling products and services through their mobile phone," says Sanyal. The entire transaction can be secured on a real-time basis through a PIN number.

The bank also recently launched a Direct Access facility, a personalised interactive kiosk with a videoconferencing hub, which enables customers to interact with the bank’s customer care executive. The touch-sreen kiosk has an interface with the bank’s back end that enables customers to conduct online transactions.

Another breakthrough for the bank was its tie-up with UTI Bank for sharing ATMs in India. This tie-up has significantly expanded the bank’s reach from 53 ATMs in 9 cities to around 850 ATMs, spread across over 65 cities and towns in the country.

BPO initiative
Recognising India as a cost-effective centre for carrying out back-office operations, ABN AMRO recently launched its shared services centre—ACES (ABN AMRO central enterprise services) in Mumbai, which provides processing services for ABN AMRO banks worldwide. In the first phase of operations, in November 2002, the bank migrated its information technology and communication network to ACES. The National call centre of ABN AMRO Bank (India) is also operational from ACES in Mumbai.

In the next few months, ACES’ Mumbai hub will act as the gateway for application development and maintenance services for ABN AMRO countries outsourcing their activity in India. The bank will also migrate processing of banking and accounts payable services from various ABN AMRO countries to ACES, India.

Future initiatives
As part of its drive to increase customer satisfaction, ABN AMRO is currently undergoing a business intelligence implementation on the Finacle platform. Though the current IT infrastructure gives the bank an integrated view of the customer across products and delivery channels, the bank now wants to fine-tune its offerings to suit the specific needs of each customer. "The implementation, which is likely to be completed by 2004, will help us track and respond to customers as individuals based on their previous contacts and behaviour," says Sanyal. The business intelligence application will enable ABN AMRO to adopt a proactive approach towards the customer wherein the bank can provide consultancy services purely by studying their buying and spending patterns and help customers wisely invest funds, in turn, gaining the benefit of cross-selling products.