...Collaborative Software Platform between Enterprises....

This is a reality in corporate banking space. There are enough "connections" between corporate and banks for payments and now a real time instruction transfer is a reality. I have myself  delivered two such connections for payments and bank statement reconciliations and have been part of various other discussions.

The discussions have now gone beyond with banks wanting to manage the treasury desk at the corporate. When we started broaching this three years ago the interest was mainly in the form of a factory and a shared service centers driven by payments and to some extent cash management. In the last three months after discussing with about half a dozen banks in Asia Pacific, I am convinced of the direction that corporate banking relationship will be taking - that the internal processes of the corporate whether on ERP or otherwise will be integrated to bank's operations.

It could be approval of credits, guarantees, hedging or even providing tax and working capital advisory or for that matter help creating a financial supply chain linking business through a network that they own or work on. The last is an even interesting proposition that will enable collaboration between Business, big, small or mix match for collaboration even without banks involvement - to check stock needs upstream, downstream or so. 

For a starter, the nuts and bolts are already there. The payment connection that is now getting stabilized - either host to host that we did between SAP ERP and bank's network or using networks like SAP FSN and SWIFT SCORE exist - which can be used as the back bone for any further collaboration. SAP ARIBA is another network that allows collaboration between parties. In addition, a big bottleneck to harmonize the language of communication has been addressed in the form of ISO20022 XML messages. The huge body of work that has been incorporated in this standard provides a comprehensive list of data dictionary that can help integration.

What is left to do in the larger scheme of things is actually small. To prioritize offerings and get the data elements for transfer on both ends. I give five years before when the integration will become seamless and also a hygiene requirement for banks. I see this easier to do on the corporate side - all they have to agree to part with the data. The challenge with banks will be to move their large mainframe monsters or even their complex infrastructure to address this new world. An approach they may take could be to separate these services from the core like they did when they moved CRM outside the core till such a time a product or a service is created in the core. Till that time an application would cycle through the stages in a customer relationship module that is accessed across channels. Perhaps these services are best way to get into the cloud world, offering a desk on the cloud for their corporate, out-sourcing infrastructure entirely. 

Banking unlike the ERP world continues to be niche - despite harmonization of process globally. Large Banks continue to have abysmally large IT departments and continue to avoid getting into packaged software - particularly for core operations. Perhaps an experiment into the cloud world offered by many large scale providers can help banks rationalize the cost and get access to the latest technologies.

Which ever way, I can see a new exciting phase for IT. 

My interest has always been for retail customers of the bank. While we speak of banks offering to man treasury desks for corporates, definitely for SME the same can be extended to retail customers. This will spawn a wide variety of software that can be downloaded on various online stores we have - Appstore, playstore or whatever and club it with India's ADHAAR experiment.

We are up for exciting phase, just look at the number of retailers in your town that are not connected but need to. 

...The Light that Shows and the Light that Covers

The scorching sun the pleasant moon

The chilling cold and the soothing warmth

The long days and the cozy nights

A single day in so many ways

That dirty race and here the divine grace

Unknown face that paves the ways

Clear titles knotted in riddles

Unseen lands with hearts clear

Muddy waters where lotus grace

Clear streams with whirlpool maze

The light that shows and the light that covers

Same source but perspectives differs

...The real Banking....Balanced Books Fair and Square

Scales of accounts

Tilted by schemes

Many many views

To write off the dues

New songs abound

The unfinished dropped 

Abandoned words

All time wrapped

Hold up the Sand Grains

but time flows free

Transfer the books 

to the master referee

The elements of time

Recorded in air

In master's books

It is all fair and square

Chavez - Is there a Capitalistic Side Lane?

I have been wanting to write this note about Chavez. He is no more but the impact he made on Venezuela and the politics of Latin America and beyond is considerable. I had a chance to be in Caracas and in Barquisimeto when he was the Presidente and the impact he had made on the society was significant. 

The banking world was distraught, it was not just that the banks had fund Chavez's plans but also had to keep the infrastructure open for the poor and the hitherto "un-banked".

One scheme that was being discussed was the La Politica Habitationes - the housing plan where all "workers" either self employed or employed by others had to contribute a part of income (through another set of regulations and agreements) to ultimately get a housing benefit. The money would go to a government fund and there would be returns. All good so far but the funds would be collected in Bank Accounts (just a store who had to transfer money to the government periodically and report) and the banks had to have a quota of such accounts to fill.

Take this further - these accounts would need to have infrastructure similar to that of a typical customer operative account (at least a savings account).

For those employed at the bank, dealing with those with limited means in itself is beneath dignity but "serving" such a large number is abhorring particularly for such low returns with no liberty to play with these funds. The real estate is expensive and technology can tend to catch up late in this segment where a pass book record is considered a guarantee or proof of funds availability. People would queue up every month may be to just check the balance. Senor Chavez would not take a no for an answer.

As in many such matters there can be a huge polarization of opinions and it is not fair to ask an external observer to make an opinion. Apart from the typical social, economic and political issue that needed resolution there was a technology issue that was there to be resolved - to keep the cost low and provide a wider access.

I remember there were talk of stored value cards (will they be Visa, Maestro, Master - imaging somebody who you thought otherwise would be carrying the Visa power) that are accessible on Multiple channels (to leverage among others shared networks) - ATMs and Mobiles were actively discussed. The talk of kiosks that are not attached to the physical branch perhaps in locations closer to the location of the customers. There was mention about selling store value cards available in street side shops (in a slightly unrelated context).

There was no middle path the banks had to fall in line. Both the source of funds and the application of funds and the ultimate use of the fund were pre-defined.

In India, there are these Aadhar cards and MNREGA scheme. This a new source of revenue for consultants to solve another problem. 

One may say, if there is an open mind socialism is the best financier for capitalism - it is just that somebody has to figure it out. Like somebody told me the other day one should not be bogged down by jargon. The result of successful socialism is individual wealth and money makes money - does that sound like capitalism. I don't know of any society that has bucked this trend. Charity is also if you have money, individual charity is capitalism not socialism. 

All old things are better of in museums and as ruins for tourist places. Let the new flow and it need not always wrapped in a gift paper with a ribbon.

A little rhetoric this one ...but none the less RIP Senor Chavez.

Bank Statements - Clean up the Mess

I am tired of Bank Statements which are not easily available in importable formats. First of all it is difficult to get an excel format, if there is then an export to excel is not clean due to the nature of data in the statements and historical data is more often than not available in a consolidated formats.

The transaction list that the bank provides is required for savings, current, loans, credit card, Demat and name it and one has to spend hours transforming it and uploading them into the database.

There are indeed good tech enabled banks - ICICI seems to stand out in technology innovation at times better than international banks - but one does not bank exclusively due to technology.

It is not that there are no standards. ISO20022 has acceptable formats and XML can be easily imported into Excel. It requires some discipline and regulation and not to penalize customers to buy applications that negotiate with banks to get the statements formatted and display.

It is time RBI considered this. A bank may go head over heal to create custom formats for corporates for retail customers it requires regulation.A simplified and standardized statements help many people in the financial supply chain, CA, Income Tax Department least of all and indeed will save the bank many expenses downstream.

People and Power - The Last Sentence so to say.

Dr Manmohan Singh is an Economist, has a greater experience as a bureaucrat than as a politician and even as a politician is elected to the upper house of Parliament. Mr. IK Gujral, the former PM of India was an acclaimed diplomat, some of the most visible ministers in the cabinet today and many of today's leading spokesmen are well acclaimed lawyers of supreme court of India and elsewhere. Mr. Shinde's qualification for the post of home minister of India is his previous job (however little)as a policeman. Some in the government are well known industrialists. A similar situation exists in opposition parties. In short, many are in politics today (small today but growing) due to their past experience and many cannot get elected on their own, infact many are in the Rajya Sabha - the indirectly elected house. If you look at the people who participants of the Indian freedom strugggle a bulk of them were students of law and political science. They were in politics because they had experience of a lifetime in some or the other form of professional occupation.

Let us come to Indian Democracy - The PM and the cabinet are part of the legislature and not the executive. All the better, because they need to represent people's views to legislate. But then, when one is in Rajya Sabha they are not directly elected - Mr. Nitish Kumar, the popular and well acclaimed mass leader and Chief Minister of Bihar is also from the upper house.

Now, look at the real popular people - The Gandhi's don't want power, they believe in sacrificing, the late Mr. Balasaheb Thakerey preferred a remote control to an office and like him the RSS leadership does not even want to contest elections. There are king makers in the states that control the central government without sitting in either houses of parliament. Mr. Ahmed Patel is not a member of either house, Mr. Deve Gowda will never want to become the Chief Minister while he awaits ashes to rise. All these people want to rule through their people. Power can have many titles and powerful titles many not satisfy all egos.  Some may call this power without responsibility and others statesmanship, altruism or sacrifice.

What ever it is - I think we have to grant every body their wish. The cabinet can be assigned to the upper house and strict qualifications can be defined for entering that house in terms of qualification and experience in public service or profession. The necessary requirement is that they have to be elected by directly elected bodies. Well, call them indirectly elected representatives.

This way the intellectuals can have the satisfaction of governing and the mass leaders the satisfaction of power. The common person will have qualified people governing (not ruling) and mass leaders and their ego tempering the government with public opinion.

The Americans do this in a good way with college professors and fat moneyed capitalists in the cabinet.

If only the Chinese get a Lower House.

Last but not the least compare this to an organization. Where do you fit people managers and project managers :). This was the last sentence that I wanted to make.