Banks To Be Watchful Of Risks, Compliance

by Sohini Bagchi    Jan 28, 2015

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In the complex and dynamic business environment, banks and financial organizations are increasingly looking for solutions that drive better profitability, compliance adherence and customer experience. In an exclusive interaction with CXOtoday, Virender Jeet , Senior VP Technology –Newgen Software explains the key issues affecting banking CIOs, how banks can be highly responsive to customers changing needs, and at the same time be watchful of the risks and compliance. Excerpt.

What according to you are the top issues affecting banking CIOs?

Compliance and Risk Management have always featured amongst the top priorities of banks and financial institutions. In the Indian context, the Reserve Bank of India has been working relentlessly to create a regulatory statute which is flawless, pushing banks and financial enterprises to spare some serious consideration to adherence to statutory requirements.  To a certain extent, when compliance is taken care of, risk is automatically mitigated. It is therefore, incumbent upon banks to identify the risks they are exposed to, and institute a systematic approach to control them. Newgen helps banks and financial institutions in meeting this incumbency and devise a systematic strategy for risk mitigation. We also provide banks end-to-end process monitoring and real-time reporting that bankers can leverage to identify risky transactions and reduce credit frauds drastically.

With many countries coming up with stringent regulations like FATCA on reporting mandates for eliminating credit and tax frauds, how is Newgen facilitating financial institutions to abide by such stringent mandates and avoid penalties/loss of business due to non-compliance?

Abiding to regulations like FATCA is complex. Financial Institutions are required to make substantial changes in processes such as client on-boarding, documentation, reporting and withholding. These acts are comprehensive n nature and highly dynamic. This greatly impacts the readiness which financial institutions have to adhere to such acts. What makes thing more complicated is the fact that governments are making adherence mandatory to these acts.

Newgen is perhaps among the very few technological firms which has an inclusive mapping to an act like FATCA. We have owned up a mix of business and technological consulting approach to help financial institutions to develop the ability to respond to acts like FATCA. We have in fact established a dedicated Centre of Excellence on FATCA. The CoE is a dedicated team of resources who work to understand the act, how it impacts enterprises, an enterprises readiness to handle the compliance and thereafter working with respective teams to deploy Newgen’s FATCA solutions. Newgen offers FATCA compliance software for both Foreign Financial Institutions (FFIs) and US Financial Institutions (USFIs). We have witnessed some major traction in the US and the Caribbean market for our FATCA solutions.

How do you see Financial Inclusion mandate in India? Does your offerings support this Financial Inclusion initiative?

A large section of our population is still deprived of basic financial services, hampering overall productivity of the nation and bringing down the human development index to a dismal figure. It is also a huge let-down for our global image and acts as a serious impediment to global enterprises’ planning to venture into India. Financial inclusion must therefore be the top agenda for authorities in today’s day and age for restoring faith of global investors and improving economic health of the country. Financial Inclusion holds great promise to scale down the poverty levels and restore parity in wealth distribution.

However, in a country as diverse as India, achieving 100% Financial Inclusion is an uphill task. Newgen thoroughly empathizes with challenges faced by governments and financial institutions to implement the mandates of citizen-centric financial inclusion. To assist governments and financial institutions in delivering basic financial services to the unbanked, we have come up with a range of innovative products to catalyze Financial Inclusion like never before.

For example, we have an application called ZapIn, a multi-platform mobile application, especially designed for field executives to capture information and initiate its processing, in real time, at the point of customer contact. It facilitates Business Correspondents and Field Agents to reach upto the frontiers and introduce benefits of financial inclusion to the deprived. Our OmniDocs on Cloud is another to accomplish absolute financial inclusion. The collation of a robust document management system with cloud computing has resulted in conception of an omnipresent platform which can be used to create, capture, manage, deliver and archive large volumes of documents. We have also come up with Cheque Truncation System (CTS) extends the doctrine of paperless office to processing of physical cheques. Payment and Settlement process is critical to ensuring efficiency of financial inclusion.