IBS Journal November 2016 Single Back-office processor
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Multi-system product processors
1. Master Data Management based customer identification: For effective multiple product processor based co-existence, it’s important that the customer is identified upfront as Common/Conventional/Islamic. The routing to the product processor is then managed effectively, based on the tag.
2. Omni-channel layer (Digital Banking, Contact Centre and IVR): Digital and channels available in omni- channel architectures need to have the capability to route the customer request based on customer/account numbers to correct product processor.
3. Flexible service layers: Shariah boards have divergent views on the common customer service layer between Islamic and conventional banking customers, resulting in common branch infrastructure and front end applications. Where flexibility exists, the customer layer is shared between both business units. The servicing layer is optimised with CRM or best-of-breed digital branch front ends.
4. Strong Online Middleware/Enterprise Services Bus: Service Oriented Architecture (SOA) capability acts as a backbone for the integration between conventional and Islamic product processors. Strong integration
between conventional and Islamic product processor ensures 100% confirmed delivery of transactions and provides a batch framework to synchronise key data elements such as customer account number.
5. Real-time integrations between “Product Processors”: Most banking models commence with conventional operations, followed by Islamic products. This is enabled in real-time in the second model, which provides a faster time to market advantage.
6. Enterprise General Ledgers: Banks also need to make a call between Enterprise GL and conventional systems acting like Enterprise GL, and having an Islamic product processor posting the daily entries. The choice between the two models varies based on this factor. The alternative, of course, is a manual consolidation.
As a general rule, the single system approach may be more suitable for greenfield and small size banks. Multiple product processor approaches could be more applicable to medium to large size banks. However, a lot also depends on geography (and regulatory constraints), availability of solutions and suppliers to support the model, approval from Shariah boards and, indeed, the six factors we have discussed here.
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