IBS Journal November 2017


31


Co-existing Islamic systems for seamless customer experience Core Modules


Conventional Banking Core


Islamic Banking Core


Retail Loans System


Credit Cards Mgmt. System


Debit Cards Mgmt. System


Workflow/ BPM


Trade Finance Channel Apps


Branches IVR


Internet Banking


Mobile Banking


ATM


SMS Gateway POS


Islamic Banking


Conventional Banking


experience across all channels for all customers with both, Islamic & Conventional products with Bank


Seamless digital banking


From an internal application architecture standpoint, the conventional and Islamic core banking systems need to co- exist and talk to the aligned applications – be it the credit card management system, retail lending systems, risk management applications, workflow and process management systems, back office applications for treasury and trade finance, or for that matter integrating with the centralized supports systems including GL.


Innovations in Technology


The single most important driver for most innovation across banks – both conventional and Islamic alike, cutting across geographies, can be attributed to the adoption of technology. Adapting to new age cool-fintech trends of cloud, digital, big-data and analytics is but a given. The nuances of co-existing conventional and Islamic banking platforms can be daunting for a conventional bank looking to also build an Islamic window, especially if you have not thought through the experience from a customer’s angle.


For starters, and as we discussed earlier, if one parks the customer segment that is using the service purely for religious reasons aside for a moment, the rest of the customer base is quite indifferent to the Shari’ah angle, but more sensitive to the overall experience and the value proposition offered. So much so, that the same customer could be using a set of products with the conventional bank, and also subscribing to a set of additional services through the Islamic window, with the expectation of having a consistent experience across both. While the innovation and focus in the customer segmentation, product positioning and partnerships can help with the value proposition, the piece that can make a significant impact is the technology-driven innovation.


While there are several aspects to technology innovation, the piece that is of utmost relevance from a conventional-Islamic banking co-existence standpoint is driving the right omni-channel experience for the customer. In simple terms, the customer is keen to experience banking on a consistent basis, quite independent of which channel he or she is engaged with – be it the branch, the ATM, the internet or the mobile channel, and also not requiring to identify oneself separately for being the customer of the conventional and Islamic bank respectively. Taking this one step further, omni channel experience is also about driving the execution of a transaction across channels. Consider this: If a customer could request product details on the internet, make the subscription on the mobile, activate the service over a branch, visit and check the balance over the IVR, all in the same breadth, then chances are that the technology integration is well done!


While this is indeed an option for banks that have established solutions in both conventional and Islamic space – such as Finastra, FIS, Infosys, Oracle, TCS, Temenos – one also comes across several banks that have opted the specialized Islamic offering from the likes of BML, ICSFS, ITS, and Path solutions as a complimentary solution to their existing conventional platform. The historic approach of building connectors across all the applications is passé. While most banks that have an Islamic window tend to connect using the middleware, there are also large banks that prefer retaining the existing conventional platform provider, to also extend the Islamic offering.


Way forward


Any innovation that does not pass the litmus test of driving customer experience is not worth its investment. And therein lies the secret sauce. While most innovations that have been adopted in the last decade have been focused more on the product and technology, one would expect that the disruption that is being experienced elsewhere in the larger banking context will have its own Islamic flavours in the not so distant future. This could only mean two things:


“


One would expect that the disruption that is being experienced elsewhere in the larger banking context will have its own Islamic flavours in the not so distant future


Keeping with the times, in terms of customer expectations is key. Driving innovations to be aligned with this focus is a pre-requisite for success, in addition to the compliance of norms.


Understanding the essence of innovation driven in the conventional banking context – across customer experience, channels, process innovation, product design and technology solutions – and adapting them from an Islamic context will be critical.


It is not rocket-science then, that both the above emphasize and zero-in back to the same point. At the end of the day, Customer is King!


www.ibsintelligence.com


MULTI CHANNEL FRAMEWORK (OMNI-CHANNEL) MIDDLEWARE


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