TCS BaNCS Newsletter Issue 23

2015 Number 23“Going digital is nolonger an option for allof us, it is the default.”N Chandrasekaran, CEO and Managing Director ofTCSplus n HDFC Securities Limited n New India Assurance n Societe Generale Experience certainty. IT Services Business Solutionsspecial Report: digital Consulting

hcoynpteerx-tualization , By N Ganapathy Subramaniam President, TCS Financial Solutions In a breathtaking video based on NASA satellite images, one Consumers are more connected than ever, using technolo- can see the illuminated areas of the world across the Earth at gies that generate information about context and mood. Fur- night. Equally breathtaking are world maps of Internet data flows thermore, the latest devices have innovative form factors and and bandwidth at any time of day. As never before, people have amazing capabilities that augur the need for even faster reaction become interconnected in a close-knit global economy, and times to new technology. It’s no longer just about reaching cus- these shifts have reshaped both global financial services and the tomers on their PCs, mobile phones and tablets. We are in the broader economy. early days of wearable computing, immersive headsets and aug- mented reality, and commercial products will be upon us faster The consistent growth of TCS tracks these global changes. At than we may realize. present, TCS has over 1,550 customers in 46 countries served by more than 318,000 of the world’s best-trained consultants, rep- Given these trends, service providers have to be prepared to resenting 119 nationalities. support “hyper-contextualization,” that is, providing customers with relevant, in-context information that captures their imagi- At TCS Financial Solutions, we have more than 300 clients using nations. Each of these three components of hyper-contextualiza- TCS BaNCS across banking, capital markets and insurance, and just tion poses a major challenge for financial institutions: about every week we have another new win or customer go-live. Relevant: Customer knowledge has been a longstanding In a large percentage of these engagements, TCS BaNCS acts as the primary core solution provider. For these clients, their goal in the financial services industry, and recent trends only ac- greatest pain point is the need to migrate to a modern core solu- celerate the need for capabilities in this area. Financial institu- tion. Yet for many financial institutions, the greatest pain point is tions need to collect and consolidate data about their customers, no longer the back-end core, but rather the front-end interface and then perform advanced analytics, using the best information with the customer. available to determine what products and services may interest2

them. Today’s media require targeted, personalized offers that newest initiative, TCS BaNCS Digital. speak to the specific needs of an individual, rather than broad appeals to massive customer segments. TCS BaNCS Digital gives TCS Financial Solutions an exten- In-Context: The timing and delivery of offers will require in- sive toolkit to address the business requirements of hyper- creased attention to evolving styles of interaction using new de- contextualization. Using the latest approaches to Internet vices. For example, the reliance on the email inbox is giving way to in-app notifications and location-based alerts. Relevant offers software development, we have created a low-cost, high-speed have to be crafted to appear at just the right time, with consider- ation of location, usage patterns, and customer preferences. approach to enabling any financial institution to create a multi- Capturing the imagination: Perhaps the hardest plicity of apps – targeted applications for specific market seg- conceptual shift for financial services providers will be com- ments that can be deployed painlessly across operating systems, ing to terms with the increased competition for attention span. Highly immersive digital environments promise to refine the devices, and form factors. science of attention to unforeseen levels. For financial institu- tions to maintain the centrality of their brands in such environ- As a standalone product, TCS BaNCS Digital allows financial ments, it will be necessary to gain an intuitive understanding of what their customers are seeing, and of what it takes to capture institutions to unlock the value of the information contained in their imaginations. their core solutions, whether powered by TCS BaNCS or a third- Over the past years, we have been working steadily on theseNASA Earth Observatory/NOAA NGDC challenges, and in January 2015, we were pleased to release our party provider. The solution allows financial institutions to layer customer information with hyper-contextual data and extensive delivery capabilities that meet the requirements of the emerging digital ecosystem. This is big news for every single financial institution with an Internet presence, and at TCS Financial Solutions, we look for- ward to having meaningful conversations with you on this most fascinating and timely topic. n 3

letterfrom the editor With $19 billion in sales in 2006, Apple was mainly in the business of ties without having to complete a lengthy core replacement project. selling desktops, laptops and music players. To be sure, as evidenced by our fast pace of TCS BaNCS customer In 2014, two product lines that hadn’t existed eight years earlier – wins and “go-lives,” the business case for switching to a modern core the iPhone and iPad – represented 72 percent of Apple’s $183 billion solution has become stronger than ever. in sales. At the same time, we realize that financial institutions have to act The turning point was the iPhone’s ideal combination of power and quickly to support customers who expect more from their mobile ex- simplicity. The iPhone opened up infinite worlds of possibility through periences. Simply put, if you can’t keep up with the mobile customer, easy-to-use apps on a handheld computer. The changes in consumer you may not be around long enough to switch to a new core solution. behavior have been profound: In the US, about 40 percent of people no longer have a landline phone (Source: CDC.gov), and people are With its groundbreaking approach to mobile app deployment, TCS also trading in their laptops for tablets. BaNCS Digital offers financial institutions the opportunity to deploy a full suite of personalized mobile solutions. You can create power- TCS BaNCS Digital has the potential for similarly transformative ef- ful interfaces for business executives, streamlined interfaces for busy fects in banking, capital markets and insurance. professionals, easy-to-read interfaces for older customers, and even kid-friendly interfaces for children opening their first bank accounts. At present, too many financial institutions provide their customers with a one-size-fits-all user experience. No matter whether they’re old The digital possibilities for financial institutions are endless, and we or young, single or married, wealthy or just starting out, retail customers expect to see a flowering of financial apps that fulfills the promise of get the same screens, the same menus, and for the most part, the same mobile technology first unleashed by the introduction of the iPhone. options that have been available for ten years. Corporate banking por- tals are similarly constrained, with local businesses sharing an interface TCS BaNCS Digital marks an important milestone for TCS Financial with global exporters and subsidiaries of large corporations. Given the Solutions, and we are proud to feature this important new product in limitations of legacy technology from inflexible core banking solution this issue of the TCS BaNCS customer newsletter. providers, customization usually stops at changing the logo. Until next time… In other words, today’s financial institutions offer flip phones in a smart phone world. Dennis Roman Editor-in-Chief TCS BaNCS Digital dramatically changes the conversation. Vice President With TCS BaNCS Digital, financial institutions can deploy a complete TCS Financial Solutions suite of consumer and enterprise apps customized expressly for the 954 423 3560 office needs of specific demographics and customer segments. These apps 954 806 6660 cell can be deployed universally, across mobile phones, tablets and PCs [email protected] using different operating systems and form factors. www.tcs.com/bancs TCS BaNCS Digital connects to any core banking solution, which means that any financial institution can quickly upgrade its capabili- For address changes, requests for new subscriptions, or other inquiries: Email: [email protected] Phone: +91 80 6725 69634

contents 2 Hyper-Contextualization How to provide customers with relevant, in-context information that captures their imaginations 8 6 HDFC Securities Limited Pioneering online brokerage supports massive growth trend with TCS 8 New India Assurance TCS BaNCS powers technological transformation for India’s largest general insurer 10 Shift Digital Introducing TCS BaNCS Digital, a new approach to deploying financial services apps 12 Chandra @ Davos N Chandrasekaran, CEO and Managing Director of TCS, at the World Economic Forum 14 The Regulatory Agenda for 2015 Key focus areas in U.S. regulation including mortgage lending and overdraft protection 16 TCS and Intel 14 TCS BaNCS clients achieve ultra-low latency using capabilities of Intel® Xeon® 18 Australian Banking + Finance TCS sponsors high-level roundtable for Australia’s banking leaders 19 Global Custodian TCS BaNCS wins award for best custody solution 20 TCS BaNCS Customer Forum Shared success stories and the launch of TCS BaNCS Digital at annual event 21 FT-TCS BaNCS Financial Leaders Executives from PayPal, MIT, Bank of America, HSBC and TCS discuss new technology 22 Societe Generale Go-Live Bank modernizes cash management business with TCS BaNCS “model bank” approach 21 23 NEWS Arab Bank Australia, Credit Union Awards, BAI Retail Delivery, Strate and NESTISTOCKPHOTO About TCS Financial Solutions TCS Financial Solutions is a strategic business unit of Tata Consultancy Services. Dedicated to providing business application solutions to financial institutions globally, TCS Financial Solutions has compiled a comprehensive product portfolio under the brand name of TCS Bancs. Our mission is to provide best-of-breed solutions that drive growth, reduce costs, mitigate risk, and offer a faster speed to market for our customers. TCS Financial Solutions delivers state-of-the-art software solutions for the banking, insurance and capital markets industries worldwide. For more information, visit us at www.tcs.com/bancs About Tata Consultancy Services LTD (TCS) Tata Consultancy Services is an IT services, consulting and business solutions organization that delivers real results to global business, ensuring a level of certainty no other firm can match. TCS offers a consulting-led, integrated portfolio of IT, BPS, infrastructure, engineering and assurance services. This is delivered through its unique Global Network Delivery Model™, recognized as the benchmark of excellence in software development. A part of the Tata group, India’s largest industrial conglomerate, TCS has over 318,000 of the world’s best-trained consultants in 46 countries. The company generated consolidated revenues of US $13.4 billion for year ended March 31, 2014 and is listed on the National Stock Exchange and Bombay Stock Exchange in India. For more information, visit us at www.tcs.com. Copyright © 2015, TCS Financial Solutions. All rights reserved. No part of this publication may be reprinted or reproduced without the written permission from the editor. TCS BaNCS newsletter is provided to clients and prospects on a regular basis. TCS Financial Solutions disclaims all warranties, whether expressed or implied. In no event will TCS Financial Solutions be liable for any damages on any information provided within the magazine. The information is provided to outline TCS BaNCS general product direction. The editorial is to be used for general information purposes. The development, release, and timing of any features or functionality described for TCS Financial Solutions products remains at the sole discretion of TCS Financial Solutions. From its inception, TCS BaNCS newsletter has been printed on paper from environmentally responsible sources. 55

securities HLSieDmcFiuCtreidties Pioneering online brokerage supports massive growth trend with TCS By Bharat Shah, Principal Consultant, TCS Financial SolutionsHDFC Securities Ltd (HSL) was founded in April 2000 as a subsid- By 2011, the impetus for investing in new infrastructure became a high priority. HSL was having exceptional marketplace success in theiary of HDFC Bank, India’s second-largest private sector bank. In 2004, HSL booming Indian economy, accompanied by increased daily trading vol-deployed a high-performance online trading solution for retail investors, umes. Trading operations must be prepared to handle a multiple of av-built using the complementary securities trading and securities process- erage trading volume, and the legacy hardware was fast approaching itsing modules of TCS BaNCS. limits. “We were worried that if the volumes continued to increase, we’d not be able to sustain the performance of the system,” said Vivek Joshi, Since then, HSL has built a successful business on the foundation of TCS Chief Technology Officer at HSL.BaNCS, benefitting from successive deployments of new features, newproducts, and frequent requisite adaptations to major regulatory changes. The anticipated growth trends and the benefits of improved resilien- cy made 2011 the appropriate time to redeploy TCS BaNCS onto a new As HSL expanded its customer base and trading volumes, TCS has en- technology stack, one capable of meeting the future needs of HSL withabled the organization to take advantage of vastly improved architectural reduced costs, higher availability and higher scalability.approaches to enterprise computing. By doing so, HSL has lowered itsdata center maintenance costs, improved coordination between vendors, Ensuring a Stable Future with TCSand bolstered operational resilience. Based on the strong, trusted relationships established since the outset of The original hardware stack consisted of enterprise technology that the TCS BaNCS deployment, HSL also turned to TCS to manage the hard-was state-of-the-art in 2004: six servers running on the RISC platform, Sun ware transition. TCS demonstrated its industry-leading reliability by pro-ONE 6.1 on 20 web servers, and an Oracle 11g database. viding eight years of unbroken uptime with TCS BaNCS across three major application upgrades. “TCS BaNCS is quite stable,” said Joshi. “Whenever Operational resiliency was supported by “active/passive” duplicate in- we have any challenges, TCS is prompt to address them and to meet ourfrastructure, with active servers operating the day-to-day business and expectations – and the expectations of our customers.”an identical set of passive servers on standby in case of an incident. Theswitch from active to passive servers, had it been necessary, would have TCS was able to prove the highest levels of scalability for TCS BaNCScalled for a complex recovery operation including manual intervention by through its high-volume, high-profile deployments in India and arounddatabase experts. A switchover would have taken at least 30 minutes, an the world.unacceptably long time in the fast-moving capital markets. Accordingly,HSL maintained a keen interest in technology architectures having more A key factor in coordinating an extensive IT architecture transition isrobust approaches to disaster recovery and business continuity. the management of key relationships from both business and technol- ogy perspectives. In India, TCS has longstanding relationships with its ma- jor trading venues (NSE and BSE) and with its primary depository (NSDL),6

Fast Facts AT A GLANCEl HDFC Securities Limited (HSL) is India’s top brokerage Company: HDFC Securities Limited, a subsidiary of house in terms of customer registrations. HDFC Bank (NYSE: HDB), India’s second-largest private sector bank.l Customer service for HSL is available at the 2,000-plus branches of HDFC Bank. Clients can trade via online, Headquarters: Mumbai, India mobile, telephone, or at any HDFC Bank branch. Business Challenge: To improve the resiliency, availabilityl HSL and TCS BaNCS won the Best Technology and scalability of the securities trading and securities pro- Implementation of the Year Award for 2014 from cessing capabilities of India’s leading online brokerage. The Asian Banker, and for the past three years has been Solution: Rapid, zero-downtime migration to a high- recognized as one of the Best eBrokerages by Outlook availability, massively-scalable IT architecture using Money, a leading personal finance magazine in India. Oracle Real Application Clusters (RAC) technology. Vivek Joshi, Scalable Benefits Chief Technology Since the deployment, HSL has achieved significant benefits in terms of Officer at HSL performance, risk management and availability.clearing organization (CCIL) and market regulator (SEBI). In addition, TCS maintains strong ties to IBM and Oracle through its The high scalability of the new architecture allows HSL to promisededicated Centers of Excellence, which consolidate best practices, consistent system performance, even during peak times. “We can tell ourtechnical standards, and solution accelerators for the respectivetechnologies. customers with confidence that our system is now available 100 percent HSL also benefits from the ease of working with TCS resources through- of the time, come what may,” says Joshi. “Whatever the load or marketout the organization. “Also, the support team on the ground is alwaysprompt and agile,” says Joshi. “It’s a very healthy, two-way relationship.” conditions, our system will keep delivering at the same high level of per-Hitting the Target formance.”The target architecture consisted of Oracle Solaris 11 for the operating The business also benefits through improved risk management. Previ-system, Glassfish 3 for the application server, and an Oracle 11 databaseusing Oracle Real Application Clusters (RAC) for business continuity. ously, risk reports could only be generated during the trading day with a The transition commenced in December 2012, and proceeded accord- latency of 20 to 30 minutes, which created risk exposures from the pos-ing to schedule, with no downtime during the migration or go-live – ahighly noteworthy accomplishment for any financial institution given the sibility of customers exceeding their trading limits. Now, risk reports arescope and complexity of the underlying operations. generated every five to 10 minutes based on the latest data, allowing In February 2013, the internet trading platform went live on the Solaris11 operating system and Glassfish 3 application server. By March, the back middle-office risk managers to make immediate assessments whether tooffice operations were using the new solution, and by April, the front-office dealing and call center operations were also live. allow or disallow specific positions that fall outside of ordinary trading The final milestone was achieved in June 2013 with the activation of limits.Oracle RAC. “TCS managed to get Oracle RAC working on our platform,which was a big achievement for all of us,” says Joshi. Oracle RAC provides In the back office, the technology staff can perform end-of-day pro-instant mirroring of data, such that if one production server fails, anothercan step in without missing a beat. This alternative is more cost effec- cessing on a significantly faster schedule. Whereas the old system had totive, provides higher availability and is easier to maintain compared to the“active-passive” model of backup infrastructure. run through the night, often until early morning hours, the new system completes end-of-day processing by midnight after close of trading. “We have a good six to seven hours to address issues, if there are any,” says Joshi. “Our staff can go home early.” Overall, the new hardware has the scalability to meet the expected medium-term needs of HSL and its customers. In the longer term, trading volumes are expected to rise even higher – and at that point, HSL will once again deploy the latest enterprise tech- nology to address customer demands. “We are now in discussions with TCS to scale to the next level,” says Joshi. n 77

insurance New India Assurance TCS BaNCS enables New India Assurance Co. Ltd. (NIACL) to capitalize upon the opportunities of deregulation in India’s immense marketplace for non-life insurance By Pranab Das, Senior Consultant, TCS Financial Solutions Private-sector insurers entered the Indian insurance market in 1999, ing to visit the originating branch for anything related to the policy, kicking off significant industry deregulation. whether for annual renewals or claims. In 2005, India’s Insurance Regulatory and Development Authority By 2008, NIACL was managing 15 million active policies. Given de- (IRDA) established a roadmap for “detariffing,” or removing the tariffed regulation and the rapid economic growth of India, the opportunity rates in favor of market-based pricing and flexible terms. Starting in presented itself to capture significant growth in policy volume, claim 2007, insurance companies were permitted to set rates based on the volume, branch offices and users. In order for NIACL to realize that specific risks and characteristics of the insured customer, and in April potential, it first had to find a different approach to doing business. 2008, insurers could customize the terms of the policies. In January 2008 NIACL and TCS entered into an eight-year, $40 mil- Deregulation offered great opportunities to New India Assurance lion engagement for the turnkey deployment and operation of TCS Co. Ltd. (NIACL) once they managed the operational challenges. BaNCS, including the core insurance solution of TCS BaNCS integrat- ed with human resources, customer relationship management and For the first time, NIACL was able to tailor the contracts and prices business intelligence applications. for its insurance policies in its four primary markets of fire, engineering/ construction, motor, and workers’compensation insurance. But first, the The first major implementation challenge was the migration of company had to retool its entire operations to encompass the actuarial policy and customer data to the centralized TCS BaNCS solution. and underwriting capabilities necessary to succeed in a deregulated Given the starting point of 1,100 separate branches, the transition market. In addition, NIACL and the other public-sector insurers had to required a special emphasis on data quality in order to remove du- improve customer service to compete with innovative private-sector plicate data and resolve data conflicts. The data migration resulted insurance companies backed by international partnerships. in the consolidation of all master data, a cleansed dataset across the entire organization, and centralized validation schemes for ongoing The situation became increasingly urgent for NIACL and other pub- data quality. Various tools were deployed for performance tuning and lic-sector insurers as the private-sector insurers increased their market load balancing to ensure delivery to support an extremely large cus- share at their expense. Prior to detariffing in 2005-2006, NIACL’s gross tomer base across the country. direct premium grew by 11.22 percent. With the changes taking effect during the following fiscal year, NIACL’s growth rate declined to 4.6 per- From a centralized database, the TCS BaNCS solution could then cent, and then to 3.62 percent in 2007-2008. NIACL was held back by provide multichannel access to information on products, policies, its legacy system, which had been deployed as a separate installation customers and claims. TCS and NIACL worked together to rationalize in over 1,100 branch offices. The deployment model had already hit its business processes across the entire branch network, creating new limits in terms of capacity and functionality, and rolling out new func- procedures for accounting, reconciliation, reporting, documentation tionality was an ordeal requiring a separate distribution and deploy- and user communication. Through these efforts, NIACL was able to ment process for each office. Without centralized control mechanisms, consolidate the financials across its extensive regional network to software configuration management was a major challenge. close its books within several days of the end of the fiscal year, rather than several weeks as previously required. Customer service also suffered by comparison with the multichan- nel capabilities of competitors. Since NIACL’s legacy system did not The rollout was completed during the 2009-2010 fiscal year, and support online access, a policy originated at a given branch could be a team traveled to multiple regional offices to train users on the TCS serviced only at that same branch, in person. Customers, insurance BaNCS solution, known internally as Centralised Web-based Insur- agents and insurance dealers were highly inconvenienced by hav- ance Software Solutions (CWISS).8

No Limits a major expansion, growing from 1,100 branches to over 2,000 loca-Using the “New India Assurance Online” tions, including 1,041 “micro-offices”web-based platform, customers can providing a full range of products tobuy new policies or renew old ones. Fur- previously underserved rural and semi-thermore, customers no longer have to visit urban areas.their home branch to conduct business, and The immensity of the numberscan seek information about their policies or sub- involved can convey a sense of the scale of themit claims from any branch. In addition, customers can undertaking. At present, TCS BaNCS supports ontake advantage of SMS and email alerts, and quickly behalf of NIACL:renew policies through mobile apps. AT A GLANCE l 19,000+ employees at 2,000 locations Through a secure system with role-based Company: l 65,000 third-party insurance agentsaccess privileges, NIACL employees also New India Assurance Co. Ltd. (NIACL) l 212 insurance products acrosshave easy access to core insurance func- 16 lines of businesstions including underwriting systems, Headquarters: Mumbai l 90 million policies Business Challenge:sales data, marketing resources and To transcend the limitations of its legacy systems l Approximately 7 million claimsdata analysis tools, while insurance in order to capture market growth and l More than 3,500 concurrentagents can access information about business opportunities in the deregulated users, with a peak of 5,820their customers and commissions. general insurance industry in India concurrent users, on a 15TBAiding its competitive positioning Solution: databasein the insurance marketplace, NIACL The core insurance solution of TCS BaNCS l An average 57,500 new orcan now price policies based on large- integrated with human resources, customer updated policies per day, with a peakscale actuarial data. Using advanced ana- relationship management and business of 83,500 policies issued in a single day.lytics, NIACL can take advantage of its large intelligence applications The technological modernization hascustomer base and nationwide scope to come completely transformed the business prospectsup with competitive insurance products. The re- for NIACL. The financial results, whether measured insulting underwriting rules and policies can be deployed terms of higher gross direct premium or higher prof-instantly across the entire branch network. its, improved underwriting results or reducedThe highly configurable, rule-based product expenses, have been extremely positive.Fast Factsengine in TCS BaNCS enables NIACL to roll l New India Assurance Co. Ltd. Ratings agency AM Best reiterated itsout new insurance products quickly, with- currently operates in 22 countries as the “A- (Excellent)”credit ratings for NIACLout the need for IT development. Forexample, NIA has entered into tie-ups only multinational non-life insurer in India, in 2012-2013, making it the onlywith leading automobile manufactur-ers including MarutiUdyog, Hyundai direct insurer at that level in India.Motors, Ford India, Tata Motors andothers. These firms, along more than1,500 vehicle dealers, now offer NIACLinsurance products at the point of sale fornew vehicles. Based on the strength of its improved and has the largest reserves and highest net worth NIACL has come a long way in the Indian insurance industry. since the single-digit doldrums of 2008, and is now growing l NIACL is the largest general insurer in India at the rate of approximately 15 in terms of business volume, office network and percent per year, gaining back market share from private-sector financial standing, with offerings in personal insurance, commercial insurance, industrial insurers and cementing its image as insurance, liability insurance and social insurance. an innovator in the Indian general insur-IT architecture, NIACL was able to undertake ance industry. nReferences: http://newindia.co.in/, http://www.mydigitalfc.com/personal-finance/new-insurance-solutions-sight, NIA CWISS implementation documentations 291

digital DigShiifttal TCS BaNCS Digital helps financial institutions reimagine the digital experience for their customers By Sathish Vallat, Principal Consultant, TCS Financial Solutions Interactive Integrated Hyper-connected experiences and intuitive user interfaces Midsize banks, instead of spending on custom develop- are now standard on mobile phones, tablets, and other con- ment, tend to rely upon template-based platforms provided nected devices, and customers expect similar capabilities by platform vendors. These platforms offer a notional sense from their financial services providers. of control by enabling bank IT organizations to configure, create, and deploy apps within a self-contained develop- Meeting the digital challenge requires mastery of a fast- ment environment. These platforms also provide widgets to evolving range of devices, operating systems and form factors, support the build of apps on native and hybrid technology which are in turn powered by multiple independent technol- stacks. The problem with the template approach arises when ogy stacks. Given the rapid pace of technological change, a bank seeks to go beyond pre-built features, functionalities, banks’ IT departments find it difficult to justify the high ongo- and interface options. User experience is limited to what the ing investments required to build and launch mobile-friendly platform can provide, and bank IT departments have to de- apps. Only a few of the largest banks have been able to make velop and maintain a specific set of skills for working on tem- the leap into custom development, and those that have done plates as well as managing the platform. so have incurred high expenses for testing and deployment.10

Development CapabilitiesCommunication Interface The multiplier effectA new approach This lightweight, secure approach has implications that areFor the past three years, TCS BaNCS has been researching an nothing less than transformative. For the first time, banks canimproved approach to deploying financial services apps us-ing HTML5, CSS3, and JavaScript – all the latest versions of create multiple apps for multiple customer segments for mul-industry standards enabling highly-functional, cross-platformdevelopment. tiple services. The result of our research and subsequent efforts is TCS For example, a millennial customer may access basic bank-BaNCS Digital, a suite of consumer and enterprise apps for mo-bile phones, tablets and desktop computers. TCS BaNCS Digi- ing services through a “gamified” interface with badges andtal allows banks to take a “build-once, deploy-many” approachacross multiple devices, operating systems and form factors. leaderboards; older customers may access banking and retire- Instead of deploying highly-specific native apps that store ment services through a simplified interface with enhancedcustomer information or even security credentials on theclient device, TCS BaNCS Digital relies upon a simple, light- readability; and high-net-worth customers may access aweight app that securely manages the communications be-tween the device and an online sign-on page. The bulk of the consolidated portfolio view of holdings across multiple assetprogram logic – and all of the customer information – resideson a secure server, rather than on the client device. classes, with access to an array of transactional capabilities. Since the program logic is stored on the server side rather Available services may include everything from remotethan on the device, upgrades and improvements can be donecompletely under the control of the financial institution. This check deposits, alerts, real-time transfers and third-party pay-allows banks to launch new products and implement serviceimprovements without having to rely upon customers to up- ments. TCS BaNCS Digital uses standardized messages fromdate their installed apps. the IFX data model to connect with any core banking solu- The secure application design adheres to guidelines recom-mended by Open Web Application Security Project (OWASP) tion, whether TCS BaNCS or a third-party core banking solu-by using multi-factor authentication along with integrationwith the Java Authentication and Authorization Service (JAAS) tion, as well as any other ancillary solutions.framework; support for OAuth and SAML standards; and inci-dent responses in compliance with FFIEC recommendations. With TCS BaNCS Digital, all of these different interfaces and services take advantage of the same lightweight ap- proach to app installation, the same middleware stack, and the same service calls. The standardized approach to deploy- ment across devices leads to faster development times and lower deployment costs, even as the bank has the potential to achieve competitive advantage with targeted approaches to front-end interfaces, back-end capabilities, and customer experiences. Banks can choose to provide customers with a browser experience, an app experience, or both. Taking advantage of the full range of possibilities enabled by the digital revolution, TCS BaNCS Digital opens up the possibility for human creativity in the mass personalization of financial services. n 1111

Chandra @ Davos “Going digital is no longer an option for all of us, it is the default. The Internet of Things will transform every company, industry and society.This is the third wave of the connected economy. The first wave through the world wide weballowed sources of information to be connected. In the second wave, the social web allowed for individuals to connect. And now in the third wave, we have TCS BaNCS DIGITAL connecting multiple electrical and electronic devices across homes, offices, factories and cities. N Chandrasekaran, CEO and Managing Director of TCS, ”at the World Economic Forum in Davos 12

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compliance The Regulatory Agenda for 2015 Increased regulatory burden for mortgage lending, lending to members of the military, overdraft protection, and other U.S. bank products By Amy Avitable, Principal Consultant, TCS Financial Solutions TCS Financial Solutions has a rigorous process for generating business requirements and incorporating them into TCS BaNCS. Business requirements are generated not just from written regulations as published, but also by “hidden requirements” generated by regulators’ interpretations and expectations. Even what regula- tors are saying at industry events can have a marked impact upon the industry. Following are some the key focus areas in banking regulation for 2015: 14

Integrated Mortgage Disclosures requirements for providing and revising the Loan Estimate, as well as providing and revising the Closing Disclosure. These require-The biggest implementation effort in 2015 stems from integrated Regu- ments will result in significant loan processing changes, such as ef-lation Z and RESPA disclosures mandated by the Dodd-Frank Mortgage fectively requiring a pre-closing process at least seven days beforeReform and Consumer Protection Act. These changes, which go into ef- closing to ensure that closing disclosures are accurate and timely.fect in August 2015, impact more than just the disclosures themselves: Unfair, Deceptive or Abusive Acts l Broader Consumer Protection – The new amendments ex- and Practices (UDAP/UDAAP) pand the scope of Regulation Z to cover trusts that are primarily for a personal, family or household purpose. Further, they eliminate UDAP/UDAAP violations are extremely high risk and can result in high the RESPA exemption for loans on property of 25 acres or more. penalties and restitution, even in situations where a bank is in technical Both changes will result in more loans being classified as consumer compliance with other governing regulations. loans and subjected to Regulation Z and RESPA disclosures. l More Complex Origination Process – One frequently over- For example, under a 2014 amendment to Regulation B, banks must looked amendment is the modified definition of “application” un- provide certain mortgage loan applicants with copies of an appraisal der RESPA, which will impact application processes for mortgage no later than three business days before closing unless the customer lenders and brokers. Further, the rules contain complicated timing provides a waiver. In response, many lenders began adding a waiver form to their application packets. While this practice technically com- plies with the requirements of the Regulation B amendment, many ex- aminers have taken the position that such a widespread waiver of the wait period is not in the best interest of the consumer and is a UDAP/ UDAAP violation. The Consumer Financial Protection Bureau is particularly concerned about high risk products, such as overdraft protection and prepaid cards, and intends to issue written guidance on each in 2015. As CFPB proposed rules and examiner positions are circulated, it is important to update your UDAP/UDAAP risk assessments and programs accordingly.ISTOCKPHOTO Lending to Servicemembers The John Warner National Defense Authorization Act covers consumer credit to members of the armed forces and their families. Today, the rules are limited to payday and similar loans that are not typically of- fered by banks. However, the Department of Defense has issued pro- posed regulations to expand the requirements to other kinds of con- sumer credit, such as overdraft lines of credit and personal installment loans. The requirements are extremely burdensome, which will make lending to servicemembers considerably more complicated if the pro- posal is finalized. At TCS Financial Solutions, we pay close attention to regulators’ pro- nouncements at every level in order to incorporate the highest lev- els of flexibility and compliance into TCS BaNCS. By monitoring these changes, TCS Financial Solutions ensures that its customers are ade- quately prepared for whatever regulatory environment may arise. n 157

capital markets TCS and Intel Power Ultra-Low Latency for TCS BaNCS Clients TCS BaNCS Securities Trading utilizes parallel processing capability of Intel® Xeon® By Ritin Shah, Senior Consultant, TCS Financial Solutions As part of the global launch of The new frontier in ultra-low latency Xeon® E5 generation of servers, Intel India launched the Xeon® E5 v3 on Latency within a trading system is caused by two major September 9, 2014 in New Delhi, components: infrastructure latency and application latency. and as an Intel partner TCS was invited to the event to conduct a Infrastructure latency covers the physical connectivity presentation about TCS BaNCS. between the servers operated by a trading firm and the data centers operated by an exchange. Over the past sev- In the highly competitive world of algorithmic trading, even eral years, firms have pushed to locate their servers in close nanoseconds count. proximity to the exchanges, with the ultimate solution be- ing “co-location,” having trading servers located in the same High-frequency trading strategies require securities firms’ facilities where the exchanges run their matching engines. trading infrastructures to have ultra-low latency – the abil- However, co-location has been widely adopted, and hence ity to send instructions to exchanges at the fastest possible no longer remains a differentiator. speed. In addition to demanding increasingly faster execu- tion speeds, securities firms also expect technology costs to Application latency optimizes the interfaces between the decline. software and hardware on the servers running the trading algorithms. By tuning algorithmic trading applications to op- In meeting these industry challenges, one of the most erate at maximum efficiency with regard to the specific fea- advanced algorithmic trading offerings in the world is TCS tures of the underlying hardware, securities firms can achieve BaNCS for securities trading deployed on the high-perfor- performance enhancements that are harder for competitors mance Intel® Xeon® E5 v3 server. to replicate. In order to enable customers to focus on reducing appli- cation latency, in 2013 TCS BaNCS and Intel initiated a pilot project to deploy TCS BaNCS on Intel® Xeon® high-perfor- mance servers. In the pilot, TCS BaNCS was deployed on a cluster of Intel® Xeon® servers using the X5355 architecture. The pilot results: TCS achieved an 8x reduction in latency to the sub-millisecond level. At the same time, the total throughput of the solution was doubled, even while using fewer processors, thus lowering energy usage and total cost once again.16

Key Benefitsof TCS BaNCS onIntel® Xeon® E5 v3From pilot to launch l Save on IT equipment. The increased number of cores and sockets on the Intel® Xeon® E5 v3In 2014, TCS BaNCS was optimized for the new Intel® Xeon® family of servers enables IT departments to re-E5 v3 product family, which delivers significant benefits in duce the number of servers, saving costs in theperformance, power efficiency, virtualization, and security. data center and on equipment acquisition. Running TCS BaNCS on Intel® Xeon® E5 v3 processors drove l Improve performance. TCS BaNCS enableseven faster response times and reduced latency levels. By har- large investment banks who providenessing the parallel processing capability, higher clock-speed, algorithmic trading services to the tradingand improved micro-architecture of servers from the Intel® community to lower application latency andXeon® E5 v3 family, TCS and Intel were able to achieve a 35 increase throughput.percent speed improvement on top of the 8x results from thepilot phase. l Improve scalability. The adoption of a parallel processing paradigm ensures that TCS BaNCS The latest generation of the Intel® Xeon® E5 processor family will seamlessly scale with future generationshas more cores, more cache and faster memory speeds, enabling of Intel platforms, saving on re-engineeringlower latency, increased throughput, and cost advantages. costs. The product family strengthens Intel’s approach to Software l Empower investors. Banks with the lowest-Defined Infrastructure (SDI), a flexible approach to chip de- latency algorithmic trading services enjoysign which increases agility and cost effectiveness of IT service a huge competitive advantage in terms ofprovisioning. being able to provide trading firms with better execution of orders and stronger performance “The Xeon® processor E5 v3 family is one among many stra- in their proprietary algorithmic tradingtegic steps to enable a Software Defined Infrastructure,” said strategies.Srinivas Tadigadapa, Director – Enterprise Solution Sales, IntelSouth Asia. 17 “The new Intel processors provide leadership performancefor compute, storage and network workloads to enable moreefficient and dynamic operation in cloud environments,” saidTadigadapa. n

events FBAiaunn+aksnitcnregalian TCS sponsors high-level roundtable for Australia’s banking leaders In a December 2014 event hosted by Australian Banking + them as partners to apply analytics at the point of sale. Finance (AB+F), high-level executives with interests in the Australian banking industry discussed a range of topics Inspiration for digital innovation can also be found far including banking regulation, customer-centric technol- ogy, digital innovations around the world, investments in beyond Australian shores. “Most banks have an innovation core banking transformation, and the role of disruptive technology. agenda,” said Subramaniam. “Instead of being inwardly- The roundtable, sponsored by TCS, included participants driven, we recommend that banks participate in a from Bank of South Pacific, Citi, Commonwealth Bank, CUA, CUSCAL, Frazer Walker, ING Direct, Intech Credit Union, King co-innovation network with venture capitalists, start-up & Wood Mallesons, and Kogekar Consulting. companies and universities, endeavoring to apply innova- DIGITAL INNOVATION tions from other markets to the home market,” he said. The cornerstone to digital innovation is to provide a single view of the bank to customers, according to “Each market is unique—and there is tremendous N Ganapathy Subramaniam, President of TCS Financial Solutions. “A single view of the customer to the bank is potential for leverage,” added Subramaniam. one thing, and a single view of the bank to customer is something else,” he said. In addition to insights from overseas, streamlined Toward this goal, banks have largely accomplished the domestic regulations also have the potential to facilitate goal of breaking down silos. The next step is to apply big data analytics and social media integration to consolidated innovation, specifically in terms of improving ease-of-use data stores. Retailers have shown particular excellence in this area, and banks have an opportunity to work with for money transfers and establishing common processes for checking government-issued credentials for customers or other banks. “These initiatives could improve banking transactions,” said Subramaniam. n AB+F is Australia’s only magazine devoted to the David Smyth entire banking and finance sector, with dedicated sections on banking (including retail, business, insti- tutional and corporate), capital markets, insurance, New Zealand markets, Asian markets, professional development and banking & finance technology.18

TGClSoBbaNaClS winsCustodian Nick Scott, TCS, with Janet Du Chenne, Global CustodianAward for Best CustodySecond consecutive winfor TCS BaNCSTCS BaNCS for securities processing has won the prestigious IDC Financial Insights named TCS a Leader among global core banking solution vendors in:Global Custodian award for Best Custody solution for the Europe (Source: IDC MarketScape: Worldwide Core Bankingsecond consecutive year. Global Custodian had instituted Solutions for European Banks 2015 Vendor Assessment — Global Providers, Document # FI254031, February 3, 2015);these awards in 2013 to recognize the best solutions and Asia/Pacific (Source: “IDC MarketScape: Worldwide Core Bank- ing Solutions 2015 Vendor Assessment — Global Providers forprofessionals in the capital markets industry. Asia/Pacific Banks,” Document # FI253683, January 22, 2015); andCommenting on the selection of TCS BaNCS for Best North America (Source: IDC MarketScape: Worldwide Core Banking Solutions 2015 Vendor Assessment of GlobalCustody Solution, N Ganapathy Subramaniam, President, Providers for North American Banks, Document # FI253356, January 9, 2015).TCS Financial Solutions said, “This is the third time that TCS In their vendor assessment report of retail online bankingBaNCS has won an award within a relatively short span of time, solutions, CEB TowerGroup analysts recognized TCS BaNCS as a “Best in Class” solution for Design and Security and Enterprisewhich is a reflection on the product’s functionality and fit with Support. (Source: CEB TowerGroup Online Banking Technology Assessment, November, 2014)the needs of custodians in the marketplace. We thank our TCS was named a Leader for the seventh year in a row incustomers who are constantly encouraging us to expand our Gartner’s Magic Quadrant for International Retail Core Banking Report 2014. (Source: Gartner, Magic Quadrantcapability and footprint to address a wide variety of customer for International Retail Core Banking, Don Free, Ethan Wang; November 13, 2014) ‡needs.” ‡ Gartner does not endorse any vendor, product or service depicted in itsJanet Du Chenne, Executive Editor of Global Custodian, research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner researchsaid, “TCS BaNCS stood out with robust processing capability publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims allwith the ease of real-time settlement. Further the product was warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.distinguished with its integrated corporate actions and cashprocessing capability and ability to manage Risk andCompliance.”TCS BaNCS is positioned for custodians, banks and financialinstitutions. It’s a real-time, multi-entity, multi-currency,multi-asset, multi-market, multi-lingual application thatenables end-to-end trade-to-settlement processing toaddress the business needs of custodians (Global,Regional and Sub-custodians). The scalability of TCS BaNCSis a significant differentiator and its reporting and compliancecapability is of the highest order, considering that theregulatory landscape is constantly evolving. n 19

events N Ganapathy Subramaniam Janet Du Chenne TCS BaN7CtShCAunsntoumaler Forum TCS BaNCS Digital introduced to executive attendees The TCS BaNCS Customer Forum provides an unparalleled opportu- Executives from top TCS BaNCS clients also gave presentations nity for TCS BaNCS clients to hear success stories directly from their about their recent successes. counterparts at other financial institutions, and to provide direct, in-person feedback to top executives at TCS Financial Solutions. Yves Doucet, Managing Director and Head of Clearing & Custo- dy Services of BNP Paribas Americas, described their recent launch The event kicked off with a presentation by Janet Du Chenne, of custody services in the US marketplace, and described how TCS Managing Editor of Global Custodian, who spoke about trends BaNCS is preparing the firm for future challenges including new and insights in the fast-changing world of institutional custody. rules for cost-basis accounting, FATCA compliance, and money market fund reform. N Ganapathy Subramaniam gave a welcome address describing the rapid growth of TCS, an overview of recent client wins at TCS In addition, an executive from a major advisory firm described how Financial Solutions, the expansion of the regional user group pro- TCS BaNCS supports the efficiency of its financial advisors by provid- gram, and the exciting launch of TCS BaNCS Digital. ing customers with individualized, personalized financial advice. n20

FFBITaN-TNACCNSSCIAL Kirsten Wolberg, Vice-President for Technology Business Operations at PayPalLEADERS Panelists: K. Krithivasan, TCS; Marcus Treacher, HSBC;Technology and banking executives discuss John Authers, Financial Times,the impact of new technology and digital developments David Godsman, Bank of America; Dr. Peter Weill,on payments and the banking industry MIT CISRaAt the 4th annual Financial Leaders Dinner Forum, orga- Senior Research Scientist and Chairman of MIT’s Center fornized by the Financial Times and Tata Consultancy Services, Information Systems Research, led a discussion with tech-senior executives and other experts from the financial nology and banking executives on the importance of learn-services industry discussed the impact of new technology ing from earlier technology innovations and disruptions.and digital developments on payments and the banking On the panel were K. Krithivasan, President, Banking andindustry. The dinner forum was held in Boston concurrent Financial Services at Tata Consultancy Services; Marcuswith Sibos 2014. Treacher, Head of Innovation, Global Payments and CashThe keynote speaker was Kirsten Wolberg, Vice-President Management for HSBC, and a board member of SWIFT;for Technology Business Operations at PayPal, who identi- David Godsman, Senior Vice-President, Digital Banking,fied market trends in the mobile payments industry and Emerging Payments & Innovation at Bank of America; andhow the financial industry overall can respond, using John Authers, Senior Investment Columnist, Financialinformation to identify partnerships, products and market Times.segments. Surya Kant, President, North America, UK and Europe,In the panel session after the keynote, Dr. Peter Weill, Tata Consultancy Services, presided over the evening. n 21

news Philippe Mirland (Front row, center, in suit), Head of Business Solutions for the GTPS business unit at Societe Generale, pictured with the combined delivery team from SocGen and TCS BaNCS. Societe Generale Go-Live in Hong Kong and Singapore Bank modernizes its cash management business with TCS BaNCS Societe Generale has successfully were carried out of Societe Generale’s strategic partner for Cash Management implemented TCS BaNCS to run its cash Global Solution Centre (GSC) in Bangalore. business, and this relationship has been management business in Hong Kong and proven once again with the successful Singapore. The implementation is part of The deployment proceeded according implementation of Cash Asia.” the modernization and transformation to schedule, meeting all of the bank’s mile- of the IT landscape for the bank’s Global stones as per an integrated program plan Nitin Sirohi, Principal Consultant, TCS Transaction & Payment Services (GTPS) jointly prepared between project teams of Financial Solutions, remarked: business unit. TCS and Societe Generale. “TCS has excellent long-standing rela- The deployment in Asia extends the Philippe Mirland, Head of Business tionships with Societe Generale business capabilities previously deployed in Europe. Solutions for GTPS at Societe Generale, solution and IT teams based in Paris. When Since 2004, TCS BaNCS has powered the commented: we embarked on the Cash Asia program, bank’s Cash Europe platform for Cash we had the challenge of including into our Management business in seven European “The Cash Asia program was designed existing processes the Societe Generale countries. Through the use of a “model based on the Model Bank approach, taking GSC India team along with some key bank” approach, the Cash Asia rollout was full advantage of the deployed solution in stakeholders in Singapore and Hong Kong. accomplished quickly and efficiently, with Europe. TCS and Societe Generale teams pre- TCS and Societe Generale teams quickly extensive reuse of functionality and inter- pared a meticulous program plan to manage adapted to an expanded process, and all faces to SG enterprise systems. the new challenge of having additional loca- the teams rallied behind the overall project tions involved in the overall GTPS program. objectives. Real-time connections between The project was successfully executed program leaders at Societe Generale and with joint participation from TCS teams “With the Hong Kong and Singapore TCS led to efficient decision making and a working in Bangalore and Gurgaon in deployments, TCS has proven its ability to successful implementation. India, and Societe Generale teams work- rapidly localize and integrate TCS BaNCS ing in Paris, Hong Kong, Singapore, and with local payments clearing services in “TCS BaNCS is now supporting Bangalore. While project teams operated new markets. TCS teams have been highly operations across nine countries for the out of multiple locations based on a well- professional in executing the program as Cash Management business of Societe defined responsibility assignment matrix, per the plan and have shown high respon- Generale, and we consider this to be a major part of implementation activities siveness in responding to unforeseen a special relationship which we look challenges that arose during the project. forward to expanding in the future.” n “Societe Generale looks at TCS as a22

10-Year Credit Milestone Union Awards at In October 2014, the International Credit Arab Union Leadership Development & Education Bank Foundation (ICULD&E) hosted its inaugu- ral awards, the “Edward Filene Credit Union Australia Awards for Excellence” and the “Joe Biden Awards for the Credit Union Development In October 2014, Arab Bank Australia recognized the ten-year milestone since the ini- Educator of the Year.” tial go-live in 2004 for the suite of banking solutions that became part of TCS BaNCS. TCS highly values its ongoing partnership with Arab Bank. The “Filene” awards, named for Boston Photo (left to right): Vincent Law and Prem Kishore Padmanabhan from TCS Financial Solu- clothier and credit union advocate Edward A. tions; Joseph Rizk, Managing Director & CEO; Farid Khoury, Head of IT and David Taffa, Systems Filene, honor outstanding achievements of Application Manager, Arab Bank Australia Limited. individuals and credit unions in Great Britain and Ireland. BAIDeRlievetariyl The “Biden” awards, recognizing U.S. Vice TCS Financial Solutions was President Joe Biden’s role in expanding thepleased to welcome AmBank, worldwide presence of credit unions through a landmark 1982 Pell grant, honor performance Malaysia’s premier financial excellence by credit union development educa-services group, to Chicago for tors from around the world. BAI Retail Delivery 2014. TCS was a primary sponsor of the event.Strate NEST reaches one-million-member markexpands with TCS National Employment Savings Trust (NEST), established to enable UK employers to en-Strate, the Central Securities Depository roll their eligible workforce into a qualifying workplace pension scheme, crossed thefor the electronic settlement of financial one million-member mark in August 2014.instruments in South Africa, has selected “NEST membership has grown from a few hundred members to over one million inthe Market Infrastructure solution of TCS under two years,” Tim Jones, Chief Executive Officer, NEST. “The TCS solution has beenBaNCS for its equity and money market de- invaluable in helping NEST deliver the service and functionality we needed whilst hav-pository operations, and as a replacement ing the capacity to deal with exponential increases in both employers and membersfor its current bond system. These moves coming to us.”further expand the strategic relationship “TCS has been the IT solutions partner and administrator for the NEST Scheme sincebetween Strate and TCS. 2010,” explained Vijaya Deepti, Vice-President, TCS Financial Solutions. “NEST went oper-Monica Singer, CEO, Strate (Pty) Limited, ational with volunteer employers in July 2011, beating by 15 months the official dead-said that she has always maintained that line of commencing full-scale operations in October 2012.”Strate’s success has been built on Eventscollaboration and key strategic American TCS The Asian IASA Americanpartnerships. “TCS custom-built Banker Innovation Banker BankerStrate’s equities system in 1998, as Retail Summit June 7-10, 2015 Digitalwell as our money markets tech- Banking Forum Las Vegas, Bankingnology again in 2009,” said Singer. April 14-16, 2015 Nevada Summit“This partnership has now moved Conference April 13-14, 2015 Hong Kongto the next level.” New York City June 8-10, 2015 March 9-11, 2015 Austin, Texas Austin, Texas 23

7.3 million in 2006 to 11 million in 2014,while also boosting daily transaction volumes to 4.5 million from 1.2 million.