Banks are now forced to cut their budgets on the implementation of various IT projects. The price of every error becomes particularly high, and sometimes even critical. OTR Vice President and Director of the Applied Solutions Practices Department Alexei GAZIZOV and Head of ECM Solutions Department Kirill KOLDASHEV shared their recommendations on how to choose the right IT projects, and what criteria should be taken into account.

NBJ: According to your observations, what is the meaning of the the right IT-strategy for the banks?

A. GAZIZOV: Given the current situation in the banking sector, we should specify what we mean by “correct IT strategy” and what criteria it should meet. In my opinion, the main necessary thing is its variability. The conditions under which the bank has to work can change under the influence of external and internal factors, business units can get new goals and objectives. The IT industry should not wait for the “business” to come pleading; it should have a variable strategy at its disposal and engage one of the scenarios in such moments.

NBJ: Do we speak about the proactive approach?

A. GAZIZOV: Yes. Moreover, this is as well because in challenging times the situation is changing much faster than in good times, and therefore one can not be guided by the monolithic strategy. The level of professionalism in banking IT also grows, and this means that the specialized experts in banks are willing to participate in the development of variable IT strategies and to implement them.

NBJ: Could you please give a specific example of cooperation between the OTR and a bank in the development of a variable IT strategy?

A. GAZIZOV: Yes, there is an example. Credit Ural Bank contacted us with the request to conduct an audit of their IT infrastructure. We carried out not only the audit, that is we revealed “narrow places” of the IT landscape of this bank, but we offered them recommendations on how to address these “narrow places”, and we also developed a variable IT strategy together with the team of this bank.

NBJ: Ok, it’s all clear with the IT strategy, but banks often complain that it is sometimes difficult to choose an IT project, which, if implemented, would bring the expected results, would meet the deadlines, and would not require any additional costs. What would you recommend them in this case?

K. KOLDASHEV: The choice of IT project should be collective, and the bank itself should make it. This is one of the main success factors. That is, business units should formulate their wishes, and then, IT departments should consolidate and formalize them, as well as clearly outline the options for the project implementation both in terms of platform and in terms of preferred contractors that could participate in the implementation process.

A. GAZIZOV: It is very important not to skimp on the team during the selection and implementation of the project. We very often face the fact that the customer expects the supplier to make it all. Of course, sometimes the bank unambiguously tells that it will provide a minimum number of experts. However, another situation is more common – the customer does not warn the contractor, and the latter is then faced with the necessity do everything themselves without much help from the team of the bank.

There is another recommendation: to be not afraid of changes in requirements during the project implementation. Of course, the desire to reduce the number of changes to a minimum is understandable, and thus we strive to provide optimal results. For example, in the course of cooperation with one of the largest private banks, we have agreed that the number of changes should not exceed 25%, and we managed to stay below this threshold. Within another project with the same bank, we indicated 10% as a standard; I think this is an achievable goal.

NBJ: Now, probably, banks refrain from financing large-scale projects. Nevertheless, bankers admit that IT infrastructure has to be in constant development. It cannot be “preserved” and left unchanged. Keeping this in mind, I would like to ask you which IT solutions, based on your experience, are currently the most demanded by credit institutions?

K. KOLDASHEV: Banks are clearly interested in solutions aimed at organizing a quick exchange of documents by client trades. This is quite natural. As competition becomes tougher and credit institutions seek to ensure customer loyalty. This can be achieved, among other things, by reducing the client’s waiting time in the course of application for a service.

We offer such technology: a comprehensive solution based on EMC Documetum, which allows establishing a centralized document flow between the front-office, middle-office and back-office departments. When a client comes, his or her documents are immediately fed into the system, and the department staff immediately gets access to the information they need to make a decision. It leads to a significant reduction of service time.

A. GAZIZOV: I have to say that we work on the whole IT landscape of the customer. And because of that, I would formulate the key current requirements of banks in the following way. First – they ask for solutions, which would allow them to “know their client”, that is to have all at the available information about the client at their disposal. It is an objective necessity, because the rapid growth of the customer base is already in the past, and banks tend to “lead” their customers along their lifecycle, providing them both with classic banking services, and with insurance services, leasing, counseling, etc. In March 2014, to meet this need, we implemented Data Master Management on Oracle for Life Financial Group. It allowed consolidating the information about all the clients of the Group, to classify them, and to develop a more targeted approach to each of them.

The second requirement is related to the stringent requirements for bank statements imposed by the Central Bank. Thus, it is not surprising that the banks are seeking to improve the quality of information provided to the regulator, as well as to Rosfinmonitoring, the Deposit Insurance Agency, etc.

NBJ: That is, we are talking about solutions that organize the process of collection, verification and processing of the data?

A. GAZIZOV: Yes. The third requirement is the development of tariffs and products catalog. From our own experience, we can say that banks have many products that fairly differ from each other. At the same time, the product catalog is kept in different systems, it is not unified, and this creates certain risks for banks. Of course, the credit institutions – those leading various rankings – are extremely interested in the classification and consolidation of their product range.

NBJ: As far as we know, you offer banks the solutions developed based on systems of western vendors – Oracle, IBM and others. Are there any risks associated with the sanctions against Russia?

K. KOLDASHEV: Such risks exist, and we try to minimize them for our customers. For example, as the most pessimistic scenario we offer them migrating to the open source software. There are necessary proven and applicable solutions for the implementation of existing objectives. But so far, I have to say, the banks are not ready for such a drastic step, and their motives are obvious – there is no wide scale open source software usage today, and financial and credit institutions do not want to take risks associated with that use.