Intelligent Banking

Vivek Subramanyam, CEO, iCreate

Have you ever been annoyed with banking telesales executives trying to sell you a credit card, a home or a personal loan, when you already have these products from the bank? They are doing their job of marketing their products, no doubt. But it appears to be a disorganised way of developing business. Today, a lot of strategic importance is being given to business intelligence (BI) and analytics by corporates, especially banks, to make decisions based on facts, rather than just data for smarter business development and better customer centricity. And this has resulted in a strong market potential for companies that market for BI software in India. In fact, Gartner, the global information technology research and advisory company, forecasts that the market for BI software in India will reach revenues of US $65.4 million in 2011, up 15.7 per cent over 2010. The worldwide BI software market revenue is forecast to grow 9.7 per cent to reach US $10.8 billion in 2011.

“The RBI wants every bank in India, in an automated manner, to submit reports to it. There are more than 200 reports that banks have to submit at different frequencies to the RBI on liquidity, capital adequacy, risk and so on. And this is a huge growth driver for us now.”

Operating in the BI space since 2006 is iCreate Software (iCreate), whose vision is to be the partner of choice for BI, analytics and performance management solutions for progressive banks in India and across the globe. Vivek Subramanyam, chief executive officer, iCreate says, “There are many technology tools available in the market in the BI sector where once you get the data, they help build reports faster and make meaningful dashboards. But there is no inbuilt solution targeted at the banking sector. And we are trying to give this readymade option with our technology tools to help integrate banking data better.”

Founded by a team of members with banking and banking technology backgrounds, iCreate’s focus is on the emerging markets of Asia Pacific, Africa, Middle East and Europe. The company has seen a triple-digit year-on-year growth since inception and has a client base of 10 banks across the globe. The company is currently working towards being among the top five BI players in the global banking space by 2014. And to reach there, it is looking at entering new geographies and is investing in increasing its sales and distribution network. It raised Rs. 15 crore from IDG Ventures in 2010 to take its value proposition across the world.

Building banking into business intelligence

iCreate has three levels of competencies – the banking domain, understanding the transactional systems in banking and the focus on BI, analytics and performance management solutions. With this approach, the company has been able to provide banks with a lower risk and faster turnaround solution to their enterprise-wide intelligence needs, such as identifying threats, weakness and opportunities. Through its product Biz$core, it caters to the BI needs of all functions within banking like credit cards, retail banking and corporate banking. It enables a 360 degree view from within the core of the bank’s organisation. It offers growth solutions that impact the top-line, bottom-line, cross-selling and sales effectiveness. It enables the generation of strategies leading to efficiency or productivity improvement within the bank in areas such as profitability and central bank reporting.

Snap Shot

Founder: Anup Pai
Year: 2006
City: Bangalore
Industry: Business Intelligence, analytics and performance management solutions
Investment: Series A funding of Rs. 15 crore from IDG Ventures India.

To cite a few examples, it is a well-established fact that higher the number of products per customer the bank has, the greater its profitability. And to achieve this, you need to build intelligence within systems and processes, to be able to identify the right consumer and accordingly match the products. “Our solution helps a bank identify the right customer for the right product,” says Subramanyam. iCreate’s solution also helps with information democratisation within the bank. “Currently, the branch manager knows his top performing customers. Our solution equips him with information on a category of potential top performing customers that he can focus on, which is not available readily,” adds Subramanyam. The company’s product also helps manage the rate of customer delinquency better.

However, the need for a BI solution is something that has to be driven by the management, feels Subramanyam. The management has to understand that they can take informed business decisions by using BI solutions that will reflect on their performance.

Growth drivers

Leading banks worldwide have invested in BI and analytics and have seen better business performance parameters in terms of profitability, increase in customers, fee income generated and much more. And Subramanyam is confident that banks will eventually invest in this area and reap benefits. Normally, when it comes to banking technology, there are three areas that banks invest in, the first being innovation. “This will help them come up with new products and services that will help differentiate themselves from competitors,” says Subramanyam. The second is on improving productivity and efficiency, while the third is to help them with compliance and regulatory factors. And iCreate’s Biz$core is capable of catering to all these requirements.

In India, less than 10 per cent of medium to large banks (around 80) have invested in this area. “Around 60 to 70 banks do not have a BI, analytics and Management Information Systems in place and that’s a huge opportunity,” shares Subramanyam. Investments will start with larger foreign and private sector banks and then go on to public sector and cooperative banks, he says. This is approximately a US $ 400 million market including the investment made in product, technology, hardware and implementation. Banks across emerging markets like Africa, the Middle East and the Southeast Asia are also under-invested in this space.

In India, the recent area of opportunity is where the Reserve Bank of India (RBI) has mandated an automated data flow (ADF) requirement for all banks. Subramanyam says, “The RBI wants every bank in India, in an automated manner, to submit reports to it. There are more than 200 reports that banks have to submit at different frequencies to the RBI on liquidity, capital adequacy, risk and so on. And this is a huge growth driver for us now,” says Subramanyam. He also notes, “The ADF requirement is only the first step towards urging banks to take up BI and analytics solutions, which is only going to help in improving their efficiency.”

The company launched its ADF product six months back and acquired Dhanlaxmi Bank as its first client in this space.

Besides this, the International Financial Reporting Standards (IFRS) compliance is also another global opportunity because the product already has in-built banking content and the requisite reporting/compliance solution framework.

Overcoming challenges

Just like any other startup, iCreate also faced the challenge of proving credibility. It managed to offset this by achieving external validations like NASSCOM Emerge 50, Deloitte Fast 500 Asia and Red Herring Asia 100 as a product company. “All of these are endorsements that we are doing the right thing and helped us alleviate any misconceptions that banks might have,” says Subramanyam, while adding, “We are also funded by an international venture capital firm and that led to a sense of stability about the company.”

For iCreate, BI is a philosophy. “Our focus is on providing a banking oriented solution at the least possible cost and lead time, and high effectiveness,” says Subramanyam. The company believes that by applying intelligence, one can come up with relevant solutions that will help solve banking problems creatively. With its differentiated value proposition and the market potential, iCreate aims to work with at least 50 strategic clients generating annual revenue of Rs. 250 crore by 2014.

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