Many Russian banks increasing client base and the volumes of provided credits demand automation process for all their front-offices. "United front" systems allow to minimize operational and credit risks of the companies, upgrade the existing product lines taking into account the client increasing demands. The Oracle Siebel CRM project supervisor of AT Consulting company Alexey MAKEEV told NBJ, what factors are necessary to take into account when you establish the new front-office systems, which faults should be avoided and what measures are necessary for the banks and integrators in order to reach a synergetic effect.

NBJ: Alexei, please explain us what you mean by the full automation of the front office and which business processes in banks are in this case subject to automation?

A. MAKEEV: It goes about the automation of processes to interact with customers at the front line in all the bank's branches and points of sale. The Project on full automation of the front office covers all the channels through which the banks and customers interact with each other. Alongside it makes no difference whether the customers are the ones existing for the banks or potential: both the attraction of new consumers for bank services and service of the existing customers are carried out within the bounds of a unified front office system.

NBJ: What are the bank's benefits from implementation and use of such system if contemplated within minimization of time and finance costs to attract customers and support them?

A. MAKEEV: In the first line the unified front-office simplified life for the employees who conduct direct operations on clients' service. Nowadays in many Russian banks the majority of front line operations are carried out through use of ABS interface , back office systems. As a rule, these are complex interfaces working with which needs a long-term training. Quite the contrary the things are with the interface of a unified front office system that must be top clear and easy in use, preventing the employee from making a mistake when he executes an operation. The front office system ensures also the possibilities to construct the operations process in the form of "master": the system hints how to act for the user, which step he must take next to execute the requested operation. Such opportunities of the front office system significantly save up time that is required to train the employees, reduce the time of operations and risks of operational errors.

The work in a unified front office system is organized subject to the unified window principle. The system gives complete information about the client to the user: history of interactions, questionnaire's data, used products, marketing offers that are topical for such client. The speed of service is increased considerably and its quality is advanced onto a brand new higher level due to the extent that all the information is available in the operative ambience.

As well the front office system substantively raises the transparency and manageability of the front office processes. It allows online setting, planning and screening KPI for clientele service's operations, exposing "bottlenecks" in performance of business processes, prompt and centralized implementing of changes.

NBJ: It means that the speed of one's consideration over the clients' credit applications rises too, and accordingly the bank gets a chance to intensify its loan portfolio and does at quite a great pace. Does this unified front office system make it possible to minimize the bank's credit risks?

A. MAKEEV: Definitely. Just because that it enables the reduction of credit risks, the risk divisions of the banks are the supporters of the unified front office. Minimization of risks is gained due to a close integration of the front office system with adjacent systems such as ABS, scoring systems, credit history bureau, bank's internal black list. Thus, all the details about the borrower, his credit history, current condition of other products, about his credit applications being under parallel examination, are available for decision-making - both automatic and in cooperation with an expert - the risk controller. As well the front office system makes it possible to trace the links between the customers and ascertain the potential borrower's inclusion into a group of related persons, to take into account the detailed information when making the decision over a particular borrower and for the group as a whole.

NBJ: Let us speak about more technical things. How long does it take to implement the front office system, and what do you think is the optimal period to implement it?

A. MAKEEV: The most wide-spread approach to implementation is based on stages. Such approach enables to get the first results already 3-5 months after the launch of implementation, and then enables to increase the scope of processes and operations to be executed by forces of the front office. It is highly important to form the composition of stages in terms of interests of all the bank's units that take part in the project. When determining the frames of stages the product approach can be applied: firstly they shift, for example, credit cards into the unified front office system, then cash credits, thereafter the mortgage, investment products, etc. Certainly the order of the products' shift into the system depends on the bank's business priorities.

NBJ: As far as I understand, ideally all the products rendered by the bank to its customers shall be united within the framework of the common front office system, shan't they?

A. MAKEEV: Yes. Such unification will help the bank to obtain the synergic effect: all the information about the products and customers will be contained in a common system, opening great chances to hold marketing campaigns and carry out extra sales. "Breakdown" by products is just one of the potential approaches to implementation of the unified front office system. Another quite spread approach is to "break down" by processes and roles: for instance, firstly the processes to sell the bank products are transferred into the unified "front", then they transfer the process to support existing products. A combination of the by-product and by-process approaches is also possible.

NBJ: Which of the approaches you have mentioned is the most popular among the Russian banks?

A. MAKEEV: Subject to our experience both the approaches are applied, everything here depends on the priorities as specified by the customer bank. As a rule, the first implementation stage includes the creation of a unified customer's profile letting the identification of the client and reception of full and acute information about him, along with the automation of the chosen business processes.

NBJ: It is obvious that such process as the implementation of the unified front office system demands a certain level of maturity from the IT unite. Please tell us about the level and the things that are necessary to be accounted by the bank preparing to deploy the system.

A. MAKEEV: Deployment of the front office system is the complex project that requires preparation both by IT units and by the business unites. Whereas the key constituent for such project lies in integrity of the front office system into the bank's IT landscape, the target IT-architecture must be worked out prior to the project's start. As a rule, while we are implementing the front office system, the burden on adjacent systems (ABS and scoring systems) is increasing due to the appearance of new integration operations, a higher intensity of calls from integration interfaces. We need to be sure that the existing IT-architecture has no "bottlenecks" and it is ready to support the front office system's work.

Moreover, as a rule we face the issue where to locate the "master system on clientele data" (purified against duplicates and incorrect data, complete and acute information about the bank's clients) within the front office implementation process. Depending on the approach as selected by the bank, the "master" can be built either on basis of the front office system or on basis of the specialized MDM-solution, or subject to the platform of the back office system. Anyway either prior the project starts or while the unified front office is under implementation one has to solve the task to ensure the quality of the existing information about clients.

It is important not only to ensure the quality of clientele data at the start of the project, but to make sure that after the launch there will be no data misalignments between the front office and back office systems. One of the most wide-spread reasons for misalignment is that the possibility to modify the clientele data and execute the operations which are transferred into the front office system is not blocked after the front office has been launched. It is required to take into account the necessity of the aforesaid blocking when one maps out the launch and the necessity of transformation period of the project on deployment of the front office.

NBJ: The problem of data misalignments when one deploys the new front office system is, in my opinion, very challenging. Which of the following should detect the facts of such misalignment: employees of the bank's IT departments or participants of the team from the side of integrator?

A. MAKEEV: Within our projects it is always a collaborative work of the bank's IT experts and integrator's specialists. The bank's internal IT service has the expertise on the systems existing in it  and sources of clientele information and our specialists know the typical problems that may arise while implementing and the ways to solve them.

NBJ: Have AT Consulting experienced the situations when "bottlenecks" were exposed not at the preparatory stage but already while the unified front office was being implemented?

A. MAKEEV: No, we have not. As a rule IT services of banks are profoundly prepared to realization of such projects, therefore we have never encountered global "surprises" preventing the project's implementation. Still within all the front office projects the objectives to build up the integrity and to obtain the high quality clientele data require the most intent attention by both the integrator and the customer bank.

NBJ: Your company, as far as I know, has deployed a number of projects regarding the full automation of the front office system. Please tell us about the most interesting of them, in your opinion.

A. MAKEEV: As an example let me tell you about the project on implementation of Oracle Siebel CRM in OTP Bank. This project is interesting due to the amounts: more than 50 thousand users work in the system at every time belt of our country. The system is a front office for execution and maintenance of all the credit products as offered by the bank. Also within this project Oracle Siebel CRM plays a leading role in management over a huge partnership network: it is liable for the partners' connection automation and provides them with an interface to execute OTP Bank's products.

When one launches the projects of the above scope it is highly important to have a correct approach to organization of training and support of the front line users. Great resources both from the bank and from the integrator were applied for training within the OTP Bank project. The process to disseminate the guide books and test tasks was arranged across the whole bank's network, mechanisms to monitor the execution of test tasks and to inform the top-managers about the performance were adjusted.

Great attention was paid at the launch stage to support of end users. Our team perfectly understood that despite the conducted training the first line would face an avalanche of questions and inquiries and ordinary staff would not be able to cope with them. Generally we recommend our customers to reinforce the first support line through additional employees at the stage for launch and stabilization of business processes.

The Project on full automation of the front office covers all the channels through which the banks and customers interact with each other. Alongside it makes no difference whether the customers are the ones existing for the banks or potential: both the attraction of new consumers for bank services and service of the existing customers are carried out within the bounds of a unified front office system.

NBJ: Shall these specialists be employed with the same bank, or can we speak about a kind of a team from the integrator?

A. MAKEEV: If we go back to the Oracle Siebel CRM system's implementation in OTP Bank, the AT Consulting team of advisors played the role of the expanded first support line. Since the system operates in the mode 24 hours a day 7 days a week, the expanded support was rendered 24 hours long by three shifts of advisors. In total more than 20 persons were engaged by the first support line, the expanded support lasted for a fortnight. The experience has shown that during the two weeks the situation became quite stable, the users understood how to apply the new instruments. Moreover, they were personally convinced that the new system made it possible not only to get all the essential information about clients fast, but to modify the products easily adjusting them for the market's realia. As a result the amounts of sale started growing and the watchful attitude towards the new instruments disappeared. The support moved to the normal mode of operation without involvement of additional resources.

NBJ: Are there any other projects remarkable for you?

A. MAKEEV: The project with TRUST bank is very interesting. The process to deploy the unified front office system is currently in full swing there. Points of sale and contact centre are already operating within the front office system; the pilot running is coming to end in the bank's branches. Early in June we started to develop the system for use by all the additional offices of TRUST. It is planned that during the month all the users in the bank's additional offices will switch in their work to the unified front office solution.

Finalizing the story about the deployed projects and the ones that are under implementation I would like also to mention our cooperation with Nordea Bank. This financial-lending entity has quite ambitious plans as for development of retailing, and it is contemplating over the implementation of the unified front office system as one of the steps to the direction in question.

NBJ: To conclude our conversation I would like to ask a question that probably is of interest for your customers and partners: What are the payback periods for such front office systems?

A. MAKEEV: It's hard to state any unified, commonly recognized figure: the terms vary depending on a particular bank according to the extent of activity that the financial-lending entities exert towards the implemented solutions. However our experience shows that such projects can be repaid quite rapidly: for example, the implementation of Oracle Siebel CRM system in OTP Bank has been repaid within a year. When such tool is handed to the bank's business units, they start quickly understanding that using the tool allows gaining more money through expansion of the product line, attraction of new customers, rise of the service quality for the existing ones, etc.

NBJ: So one year is an ideal payback period if I am not mistaking. And what can you tell us about the average period?

A. MAKEEV: We think normal period to be from one year to three years.