In an epoch of increased fight, economic uncertainness, increasing ordinance and planetary convulsion, companies are endeavoring to continually better operational efficiency. Many are looking to information engineering to supply decreases in operating costs and increased efficiency by automatizing and streamlining bing concern procedure. Information engineering trades with the usage of electronic computing machines and computing machine package to change over, shop, protect, procedure, transmit and firmly retrieve information.
Today, the term of information engineering has distended to embrace many facets of calculating and engineering and the footings have become really recognizable. IT professionals execute a assortment of responsibilities that range from put ining applications to planing complex computing machine webs and information databases. Thus information engineering plays an of import function in every concern in the industry including Bankss.
A bank is a fiscal establishment that accepts sedimentations and makes loans. It is licensed by authorities where intended to go around money or to have the money of others ( Mishkin et al, 2006 ) . Bank salvaging histories are a critical portion of everybody ‘s fiscal image, it offers easiness and flexibleness. A bank history enables clients to entree their money rapidly and easy, such as composing cheques and by retreating money from ATM. Along with that bank is the safest topographic point that people can set their money because bank histories are insured against loss by the federal authorities.
Therefore in this assignment, we like to analyse the usage of new information engineerings in one of Bankss in Malaysia called MAYBANK. This paper will give the current usage of IT within the organisations and their effectivity in run intoing the concern ends.
Maybank is a trade name for Malayan Banking Berhad and it is the largest bank and fiscal services in Malaysia. Maybank was founded by Malayan concern baron Khoo Teck Puat. It was incorporated on 31 May 1960 and started its operations on 12 September 1960. The bank was listed on the Kuala Lumpur Stock Exchange on 17 February 1962. Its extended merchandises and services include commercial banking, investing banking, Islamic banking, insurance, legal guardian services, plus direction, stock broking, venture capital and Internet banking.
Maybank offers a full scope of commercials, corporate, and private banking services, with a web of more than 450 subdivision offices and more than 2,500 ATM machines. The Maybank group has offices in 14 states in the universe where most of them are located in Asia. As of December 2008, Maybank boasted group assets deserving RM 301 billion puting it among the top 120 Bankss worldwide. In add-on to its commercial banking web, Maybank operates a figure of specialised subordinates in the insurance, investing banking and assets direction, and finance sectors. The subordinates are Maybank International Limited, Maybank International Islamic banking, Maybank Philippines, Maybank PNG, and PT. Bank Maybank Indocorp ( Maybank, 2009 ) .
Maybank is known as an organisation that focuses on sustainable and superior growing guided by sound fiscal subject and besides operates in the most efficient and effectual mode. Their mission is to be a prima regional fiscal services group by 2015. Following their mission, Maybank strive to accomplish visions where they are seeking to be the top five fiscal services group in South East Asia across all high margin/profitable products/segments, genuinely regional organisations with 40 % of gross loans derived from international operations, acknowledgment for presenting advanced and superior value proposition to clients and go a top quartile employer of endowment in each of their markets.
In order to accomplish these visions and missions, Maybank conduct their concern to the highest possible criterions of unity. In footings of organisation environment, Maybank applies 5 of import nucleus values of their concern. The nucleus values are teamwork, unity, growing, excellence and efficiency and relationship edifice. As a bank leader, Maybank dainty all employees, stakeholders and clients with the extreme regard. They work together as a squad bases on common regard and self-respect. Employees are expected to be honest, professional and ethical in any traffics of company.
Towards this clip, Maybank has led an aggressive thrust to spread out its web in order to maximise their gross. At the same clip, the bank has systematically set new benchmarks in their merchandise and service bringing by accomplishing many number ones in the industry which include the first to present a rural recognition strategy, mobile banking services, cyberspace banking and receivable funding on a non-resource footing.
The common merchandises and services are clients use are Islamic banking and their cyberspace banking system or known as Maybank2U. Maybank Islamic Berhad was incorporated as an Islamic bank and a entirely owned subordinate of Maybank. It is able to run in new countries of Islamic banking and offer a wider scope of Islamic merchandises and services. Otherwise, Maybank cyberspace banking or Maybank2U is an instant online banking services that clients can entree from the desktop or laptop in anytime at anyplace on client ‘s leisure and convenience.
Today, Maybank stands above its equals as Malaysia ‘s flagship fiscal services group in a vibrant, strong and extremely competitory banking and fiscal services landscape. Maybank trough their subordinate such as Maybank Islamic is the taking Islamic bank in the Asia Pacific part and among the universe ‘s top 10 Islamic Financial Institution. The group employs over 39000 Maybankers to function over eight million clients. The group ‘s foundation of strength, consistent record of profitableness and strong balance sheet is testament to the bank ‘s flexibleness in all economic rhythms trough the old ages ( Maybank, 2009 ) .
BUSINESS ENVIRONMENT ANALYSIS
Competition Environment Analysis
The chief rivals of Maybank are RHB Bank Bhd, Public Bank Bhd, CIMB Bhd, Bumiputra-Commerce Bank Bhd, Hong Leong Bank Bhd, HSBS Bank Malaysia Bhd e.t.c. It is obvious that the banking industry in developing economic systems has been sing a cardinal alteration in its market construction since the Asian fiscal crisis. One of the chief implicit in factors behind such a moving ridge of fiscal consolidation may be the ferocious competition among Bankss triggered by fiscal deregulating and fiscal globalisation, ensuing in a crisp addition in fiscal direction hazard.
However to continue a sustainable competitory advantage Maybank must execute its value activities in a manner hard to retroflex or be imitated by their rivals. In footings of scheme, scheme that they use presently is unfastened for concern scheme where they are traveling back to fundamental of merchandiser banking which is to supply fiscal solutions for companies. It is used to remaining off from the complex structured merchandises section that caused the prostration of a few banking giants in the US ( Min Hun, 2009 ) .
In footings of menace of new entrants Maybank is in a safe place since the mean individual could non come along and get down up a bank. The person does n’t present much of a menace to the banking industry, but one major factor impacting the consumers are comparatively high shift costs. If a individual hasa mortgage, auto loan, recognition card, look intoing history and common financess with one peculiar bank, it canbe highly tough for that personto switch to another bank. In an effort to enticement in clients, Bankss try to take down the monetary value of shift, but many people would still instead stick with their current bank.
In footings of replacements, there are plentifulness of replacements in the banking industry besides other Bankss itself. Banks offer a suite of services over and above taking sedimentations and imparting money, but whether it is insurance, common financess or fixed income securities, opportunities are there is a non-banking fiscal services companythat can offer similar services. On the lending side of the concern, Bankss are seeing competition rise from unconventional companies such as Sony, General Motors and Microsoft that offers preferable funding to clients ( Scholtens, 2009 ) . For case, auto companies are offering 0 % funding while clients will acquire a auto loan from the bank and pay 5-10 % involvement.
The banking industry is extremely competitory. The fiscal services industry has been around for 100s of old ages and merely about everyone who needs banking services already has them. Because of this, Bankss must try to entice clients off from competitor Bankss. They do this by offering lower funding, preferred rates and investing services. The banking sector is in a race to see who can offer both the best and fastest services, but this besides causes Bankss to see a lower return of assets. They so have an inducement to takeon bad undertakings. In the long tally, we ‘re likely to see more consolidation in the banking industry. Bigger Bankss would prefer to take over or unify with another bank instead than pass the money to market and publicize to people.
In decision, despite all these competition a natural synergism develops between Maybank and their subordinates through this concern theoretical account which unite to supply the optimum trade for the client. Maybank is now client oriented, intending that it advises and caters to the demands of the client.
Product and Service Analysis
As mentioned before the common merchandises and services of Maybank that client employs are Internet Banking or known as Maybank2U and Islamic banking. Since we talked about the usage of IT, we merely focused on Internet Banking of Maybank in how information engineering helps Maybank accomplishing their ends.
As the Internet market in Malaysia continues to turn and amount of clip the mean Malayan spends online. The growing in the Internet is supplying new chances for sellers to capture the attending of their audience and new chances for concerns to interact with their clients. Understanding the demographic composing of these clients, their on-line behaviours and other competitory intelligence will enable these concerns to use effectual digital selling schemes and to surpass the competition.
Based on study of Nasdaq 2009, it was revealed that Maybank2U.com led as the most visited local site with more than 1 million visitants, making about 12 per centum of all Malaysians online. Maybank2u.com is Malaysia ‘s most popular Internet banking finish and local site. Therefore, the on-line channel continues to play a important function in Maybank scheme as they strive to supply clients with the best online banking solutions and engineerings to heighten their on-line experience and increase convenience.
Maybank2u.com merchandiser plan is one of the best plans available locally in Malaysia. It is a strategic confederation system that gives client the chance to sell their merchandises and collects payments from clients on-line anytime and anyplace. The services that Maybank offers are on-line banking, online shopping, and recognition cards payment, insurance payment and others. Customers can go Maybank ‘s payee corporations under on-line measure payment and/or online shopping. Online shopping payee corporations can even have their merchandises in Maybank2U.com
Maybank being the largest bank in Malaysia with immense clients ‘ base will be the most compelling grounds for clients to take portion in the plan. Maybank2U.com on-line banking already boosted more than 2 million registered users. Bing featured on the web site will convey clients high quality traffic which is both internet and e-banking which represent the targeted group of people who will most likely to purchase from online.
This fiscal portal site provides a suite of online banking installations and services. For illustration, Maybank joined with MSN to beef up its trade name and image every bit good as addition traffic and subscription to their site. Partnering with MSN ‘s digital selling expertness meant that the bank would acquire seeable presence on MSN adventurer, the latest cyberspace browser, every bit good as sponsorship chances widening Maybank ‘s visibleness and services to a wider clients reach. The mark market of this system is traditional ‘non-internet ‘ Maybank clients and non-Maybank clients. To guarantee safety and confidentiality of minutess, all payments are done in a secured environment. Maybank has employed the latest Internet security engineering and assorted security patterns in its portal ( Maybank Press Release, 2002 ) .
Not merely did Maybank desire to beef up the consciousness of its esteemed trade name and increase site traffic, but a cardinal end of the fiscal establishment was to change over traditional banking clients to utilize the online services. This was a major challenge as one out of every five Malaysians is a Maybank client, intending that it was a big client base to change over. It therefore Maybank signed a strategic confederations with MSN since Maybank wanted a spouse with the digital selling and industry leading to assist the company accomplish its ends.
With similar ends, the partnership and strategic confederation between MSN and Maybank is another illustration of the successful purpose in conveying the cyberspace and its web services to enable concerns to increase profitableness and stigmatization and foremost for consumers to acquire more out of life through the Web.
Customers are the pillars of Maybank ‘s strength and they will stay committed non merely to keeping first-class service criterions but besides anticipate client demands and enterprise to carry through them. Target consumers of Maybank is unlimited so they have been continually ambitious and endeavoring to widen the scope of possibilities in footings of service handiness, merchandises and services every bit good as operational efficiency.
In order to spread out their consumers, Maybank has been put to deathing a scheme of regional enlargement on 2008. Maybank acquired some of Bankss in foreign state such as An Binh Bank in Vietnam, MCB Bank in Pakistan and command for Majority interest in Bank International Indonesia in Indonesia. These coup d’etats are conducted to accomplish a competitory advantage non merely in domestic market but every bit good in foreign market.
The success of concern theoretical account and the effectivity of their scheme afforded the chance for a wider range of seller confederation between Maybank and several globally known fiscal establishments. For Maybank ‘s clients, these coup d’etats brought to them an extended portfolio of high value merchandises and services with convenience. More significantly, clients had the added assurance of cognizing they were covering with an establishment which they already had an established relationship and a repute for fiscal strength.
Maybank topographic points high precedence to guarantee that the right engineering is used to heighten client experience. Maybank believes that engineering offers alone entree, velocity, convenience and greater security. It is besides non to lose the component of a personal touch in chase of online banking excellence.
Presently, Maybank is the constituted market leader in on-line banking in Malaysia with the largest user base of 3.8 million clients and the highest figure of web based merchandise offerings online. Maybank intends to leverage on its strengths in practical banking to make a comprehensive scope of terminal to stop fiscal solutions. In the close hereafter, Maybank expects that the consumers can hold the option to carry on their banking either via Maybank2U.com or through their call Centre.
Maybank leverages on its leading in electronic channels to present a scope of services via the largest electronic web of more than 4.568 self service terminuss. During the twelvemonth, 13 new subdivisions were opened with a dedicated e-kawanku service zone offering an array of electronic self-service terminuss including ATM ‘s every bit good as hard currency and cheque sedimentation machines. In add-on, 91 off bank ATM ‘s were besides installed at locations such as petrol mercantile establishments and shopping promenades to function the consumers. In its abroad office, Maybank opened new subdivisions in Cambodia and Vietnam supplying ATM installations to enable the company to enlarge their regional nexus. In line with the regional scheme, Maybank besides plan to associate the ATM web and over the antagonistic minutess across the part for seamless connectivity and entree are afoot peculiarly in Indonesia, Singapore and Malaysia.
MAYBANK ‘S INFORMATION TECHNOLOGY STRATEGIES
Maybank ‘s Information and Communications Technology ( ICT ) sector is focused on upgrading and transforming bing capablenesss to present new engineerings every bit good as to pull off procedures to better operational effectivity, cost efficiencies and service excellence [ 1 ] . The group during the twelvemonth reaffirmed their committedness towards heightening the ICT substructure given that it is a strategic enabler to the organisation ‘s concern operations.
During the ambitious period of the planetary economic downswing in the past twelvemonth, major enterprises that revolved around endeavor procedures and cutting-edge engineering were undertaken to back up the group ‘s regionalisation, and in the longer term, globalization schemes [ 2 ] . As one of the nucleus competences of the group, inventions by ICT are based on the people, procedure, and engineering synergism which speed up the execution of the group ‘s programs to make value-revenue coevals and construct competitory advantage to better productiveness, public presentation and guarantee cost decrease. There were besides attempts to guarantee engineering investings were aligned to the group ‘s transmutation scheme and their ICT systems achieve economic systems of graduated table.
On the engineering forepart, accent was placed on heightening endeavor web and substructure capablenesss by supplying greater web stableness and handiness, while at the same clip accomplishing cost efficiencies ( Maybank, 2009 ) . This was made possible with the transmutation of Maybank ‘s frame relay web to IPVPN engineering which resulted in significant cost nest eggs and public presentation betterments. In traveling towards superior web capablenesss, ICT besides implemented the metro-ethernet web engineering which caters chiefly for the high velocity bandwidth demands of subdivisions with minimum bandwidth constellation of 2MB. Furthermore, in response to the demands of practical banking concern continuity, the group implemented the Disaster Recovery model for the practical banking cyberspace web topology. Additionally, in the practical banking infinite, Maybank2u.com was revamped to let greater client personalisation by guaranting that the right content is delivered to the client at the right clip. They besides set up the platform for the future extension of Maybank2u.com services to other devices such as booths, PDAs and nomadic devices.
A cardinal fiscal transmutation enterprise which the group embarked on was the development of the Enterprise General Ledger for double-entry book-keeping every bit good as enhanced coverage, multi-dimensional positions and analysis to run into today ‘s fiscal and regulative coverage demands and timelines [ 3 ] .
In the country of concern intelligence, ICT is heightening the adulthood of the MIS substructure by concentrating on information handiness, unity and truth with the development of a robust MIS architecture to manage increasing demands. However, there is a demand for the enablement of informations integrating from a centralized database and seamless substructure, which allows for informations excavation and heuristic analysis. Once it is developed it will be farther refined to present state-of-the-art direction information capablenesss to back up concern demands for more accurate, seasonably and concise information.
Another of import enterprise for ICT was the planning of the new nucleus banking system solution to replace the current bequest system [ 4 ] . Given new engineering promotions and progressively sophisticated client demands, the new system enables the transmutation of subdivision banking, service quality, nomadic capablenesss and capacity for shorter clip to market.
To accomplish better administration of IT undertakings and ROI, ICT together with the LEAP30 transmutation squad embarked on a programme to optimize and reprioritise IT undertakings. At the terminal of the first stage of the programme, the group successfully achieved a cost turning away in surplus of RM100 million in IT outgo. This was mostly owed to the attempts of the squad working closely with the concern sectors in reexamining undertakings for the full Maybank Group.
In footings of bettering consumer concern gross coevals, the LEAP30 enterprise called Tactical Gross saless Stimulation ( TSS ) was successfully supported by ICT. Through the enablement of the bing substructure for loan inception with distant entree, Consumer Banking was able to better call up its gross revenues forces to locations outside the subdivision and closer to clients ( Maybank, 2009 ) .
Hazard direction at Maybank encompasses recognition, market and operational hazards direction. The Group adopts an incorporate attack towards the effectual direction of enterprise-wide hazards. This has been made possible by working towards conformity with Basel II demands under the Internal Ratings Based Approach ( IRB ) . ICT has successfully delivered the Basel II system such as the Integrated Retail Scoring Solution ( IRSS ) , Credit Risk Rating System ( CRRS ) , Group Collateral Management System ( GCMS ) and Risk Data Management Solution ( RDMS ) ( Maybank, 2009 ) . The followers is a more elaborate representation of the hazard direction solutions mentioned:
Recognition Risk Management
Recognition hazard arises as a consequence of clients ‘ or counterparties ‘ failure or involuntariness to carry through their fiscal and contractual duties as and when they arise. These duties arise from the Bank ‘s direct loaning operations, trade finance and its support, investing and trading activities undertaken by the Bank.
Management of Credit Risk
Corporate and institutional recognition hazards are assessed by concern units and approved by an independent party ( Group Credit Management ) where each client is assigned a recognition evaluation based on the appraisal of relevant factors including client ‘s fiscal place, types of installations and securities offered. Reappraisals are conducted at least one time a twelvemonth on a client ‘s fiscal place, market place, industry and economic status and history behavior. Corrective actions are taken when the histories show marks of recognition impairment.
Recognition Risk Management Framework ( CRM )
The CRM model includes comprehensive recognition hazard policies for direction of recognition hazard every bit good as methodological analysiss and theoretical accounts to quantify these hazards on a consistent footing. Components of the CRM model constitute: –
- Strong accent in making and heightening recognition hazard consciousness.
- Comprehensive choice and preparation of loaning forces in the direction of recognition hazard.
- Leveraging on cognition sharing tools including e-learning classs to heighten recognition accomplishments within the Group.
The Group ‘s recognition O.K.ing process encompasses pre-approval rating, blessing and post-approval rating. The CRM sub-sector is responsible for developing, heightening and pass oning an effectual and consistent recognition hazard direction model across the Group. This ensures appropriate recognition policies are in topographic point to place, step, control and proctor such hazards.
Recognition Risk Models and Tools
Recognition Hazard Rating System ( CRRS )
The Maybank Group has adopted the Foundation Internal Rating Based ( FIRB ) attack under Basel II for its corporate portfolio. This allows the Group to utilize its ain internal estimations of Probability of Default ( PD ) to find an plus hazard burdening. The development of CRRS for Maybank ( including Singapore Operations ) and Maybank Investment Bank allows the Bank to place, buttocks and step corporate and commercial borrowers ‘ recognition hazard.
CRRS is a statistical default anticipation theoretical account. This theoretical account was developed and recalibrated to accommodate the Group ‘s banking environment utilizing internal informations from 1985 to 2000. The theoretical account development procedure was conducted and documented in line with specific standards for theoretical account development in conformity to Basel II. The Expected Loss ( EL ) model employed by the Group enables the computation of expected loss utilizing Probability of Default estimation facilitated by the CRRS and Loss Given Default and Exposure at Default. The internal hazard evaluation theoretical accounts comprises two constituents, i.e. the Borrower Risk Rating ( BRR ) and Facility Risk Rating ( FRR ) . The BRR is a borrower-specific evaluation constituent that provides an appraisal on the likeliness of the borrower traveling into default over the following 12 months. The BRR estimates the borrower hazard and is independent of the type/nature of installations and collaterals offered. The FIRB attack under the Basel II requires the usage of the most recent five twelvemonth informations to drive the PD parametric quantity. In line with Maybank ‘s application for FIRB attack under Basel II, the bing CRRS Scorecards were enhanced and recalibrated ( Maybank, 2009 ) .
Bank Risk Rating Scorecard ( BRRS )
In add-on to quantifying the hazard of corporate borrowers, the Bank ‘s internal squad has developed a Bank Risk Rating Scorecard ( BRRS ) to put on the line rate the Bank ‘s counterparties and Bankss as borrowers based on the FIRB attack [ 5 ] . Two separate scorecards were developed, viz. :
- BRRS – Developed Countries Models.
- BRRS- Emerging Countries Models.
The aims of edifice this scorecard were to develop and implement a Undertaking Finance evaluation templet based on and mapped to Basel II/BNM Supervisory Slotting Approach to accomplish an IRB conformity ; to ease better pricing of borrowers based on hazard category ; and to heighten recognition hazard direction processes to accomplish: –
- Consistency in recognition hazard appraisal and concern direction for undertaking finance portfolios and
- Improvement in turnaround clip.
Risk Data Management Solution ( RDMS )
RDMS improves hazard direction patterns and enables the Bank to follow more comprehensive and accurate steps of hazard every bit good as more effectual procedures for commanding exposures to hazard.
In add-on to guaranting recognition hazard regulative conformity for the Group, RDMS is the cardinal solution to supply regulative and Pillar III coverage capablenesss. RDMS supports the Bank in its theoretical account creative activity, care and proof procedure by historising relevant concern informations. It besides provides the foundation for the creative activity of cardinal concern constituents like Risk Based Pricing and Risk Adjusted Performance Measures in the average term ( Maybank, 2009 ) .
NPL Data Management
The NPL Data Management work watercourse gaining controls informations related to defaults, commissariats, recoveries aggregation and cost of recoveries. Its primary purpose is to do available the beginnings or Fieldss that the Bank purposes to roll up to do its ain estimations on Loss Given Default ( LGD ) and to further verify the parametric quantities used in finding the same by manner of back testing ( Maybank, 2009 ) . Prompt and detailed NPL informations information besides serve as a cardinal factor towards bespeaking countries for betterment in the direction of assets therefore maximizing resources and bettering efficiency [ 6 ] .
Group Collateral Management System ( GCMS )
The GCMS undertaking is a cardinal collateral direction system for Maybank Group where collateral informations, related functionalities including a consistent system reappraisal allows eligible collaterals under both SA and IRB attacks to be used towards decrease in regulative capital. Collateral informations are exported to the Data Warehouse for RDMS extraction into the capital reckoner ( Maybank, 2009 ) .
Market Risk Management
Market hazard is defined as the hazard of possible losingss in net incomes originating from motion in market monetary values and their several correlativities and volatilities. The major market hazard categories are monetary value hazard and liquidness hazard.
Monetary value hazard is the hazard to net incomes as a consequence of inauspicious alterations in the market factors such as foreign exchange rates, involvement rates, trade good monetary values and equity.
Liquidity hazard arises when the Group is unable to obtain financess to run into its fiscal duties at a sensible cost due to the inauspicious market motion, which hinders the ability of the Group to retreat or to fudge its places ( Maybank, 2009 ) .
Management of Market Risk
Market Risk Management ( MRM ) is the independent hazard control unit responsible to guarantee efficient execution of market hazard direction models and equal hazard controls are in topographic point to back up the concern growing. Its primary aim is to ease risk/return determinations, cut down volatility in net incomes, highlight transparent market hazard and liquidness hazard profile to senior direction, Asset and Liability Management Committee ( ALCO ) , Risk Management Committee ( RMC ) , Board of Directors ( BOD ) and regulators [ 7 ] .
The degree of hazard tolerance by the Group is chiefly controlled through a series of sanctioned bounds and policies. Policy and Documentation is responsible to develop and explicate comprehensive market hazard direction models, policies and hazard bounds methodological analysiss for all exchequer activities and certification criterions for regulated fiscal market understandings associating to treasury operations.
Market Risk Management Framework
The Market Risk Management Framework covers cardinal hazard direction activities of designation, measuring, monitoring, control and coverage of the market hazard exposures, which are benchmarked against industry best patterns and regulative demands. The rules mentioned under the model are intended for general application across all exchequer and nucleus banking products/instruments, capable to the several units ‘ hazard appetency, resources and capablenesss.
The Group ‘s policies, procedures and controls are designed to accomplish a balance between working trading chances and pull offing net incomes volatility within a model of sound and prudent patterns. Trading activity hazards are capable to bounds which are established by currency, instrument, place and adulthoods. All places are Marked-to-Market day-to-day and the ratings are reviewed on a regular footing ( Maybank, 2009 ) .
Several medium-term undertakings have been initiated to heighten the capablenesss of the exchequer system substructure ; amongst others are the Treasury Risk Management System ( TRMS ) and Internal Models Approach ( IMA ) .
Treasury Risk Management System ( TRMS )
The TRMS purposes to heighten the bing hazard monitoring for Treasury Front Office, Middle Office and Back Office on a existent clip footing [ 8 ] . The benefits are to heighten the operational efficiency of the exchequer procedures and to supply more comprehensive exposure studies. The activities involved in the TRMS are the sweetening of exchequer system, streamlining / integrated work flows and procedures for all exchequer merchandises.
Internal Models Approach ( IMA )
The IMA facilitates planetary hazard monitoring and capturing ; increasing the capableness of Maybank to execute efficient allotment of market hazard capital for exchequer concern and to farther enhance hazard direction processes. There are two work watercourses under the IMA undertaking, i.e. concern demands which involve IMA enfranchisement and the proficient demands which involve informations integrating from abroad units ( Maybank, 2009 ) .
The IMA proficient work watercourse interfaces data/exposures from all entities ( including abroad subdivisions and subordinates ) to the hazard engine at Head Office. This enables Maybank to proactively aggregate and pull off the planetary hazard exposures for all merchandises.
The Group is besides heightening the prevailing hazard measuring methodological analysis, market hazard models and procedures to obtain enfranchisement from BNM on IMA preparedness. With the execution of IMA, the Maybank Group will be on par with other planetary Bankss for the advanced and efficient direction of capital charge.
Operational Risk Management
Operational hazard is defined as the hazard of loss ensuing from inadequate or failed internal procedures, people and systems or from external events. This definition includes legal hazard, but excludes strategic and reputational hazard.
Management of Operational Risk
The Operational Risk Management Unit ( ORM ) is responsible for the preparation and execution of operational hazard model within the Group, which encompasses the operational hazard direction scheme and administration construction. Another cardinal map is the development and execution of the operational hazard direction tools and methodological analysiss to place, step, proctor and command operational hazards.
Hazard taking units ( Business/Support Sectors ) constitute an built-in portion of the operational hazard direction model and are chiefly responsible for the daily direction of operational hazard. They are responsible for keeping their several operational manuals and guaranting that activities undertaken by them follow with the Group ‘s operational hazard direction model.
Operational Risk Management Framework
Maybank Group ‘s Operational Risk Management Framework focuses on the five causal factors of operational hazard i.e. internal procedures, people, systems, external events and legal systems ( Maybank, 2009 ) . The Group has automated the operational hazard capital charge computation procedure for the Basic Indicator Approach ( BIA ) and The Standardized Approach ( TSA ) . The mechanization was initiated to bring forth accurate and dependable figures for Operational Risk capital charge across the Maybank Group.
Operational Risk Management Methodology and Tools
A assortment of methodological analysiss and tools have been implemented to efficaciously place, buttocks, step and study operational hazard exposures on a timely footing, thereby functioning as tools to ease decision-making and heighten the operational hazard direction procedure. Risk designation is the acknowledgment of operational hazard scenarios that may give rise to operational losingss. For illustration, under the Group ‘s merchandise blessing programme, all hazards inherent in new products/financing bundles and related concern activities are identified prior to the launch of the product/financing bundle, with hazard extenuation steps emplaced [ 9 ] .
Risk-profiling and self-assessment exercisings are besides conducted as portion of the operational hazard direction procedure.
The above exercises enable hazard taking units to place built-in operational hazards specific to their environment and help them in measuring the effectivity of controls in topographic point. Hazard Mitigation tools and techniques are used to understate hazard to an acceptable degree and are focused on diminishing the likeliness of an unwanted event occurring ; and diminishing the impact on the concern, should it happen.
The control tools and techniques to extenuate operational hazard are as follows:
Business Continuity Management ( BCM )
The Maybank Group BCM Programme which commenced in August 2004 purposes at guaranting concern continuity and people safety in the event of breaks and or catastrophe. Under BCM execution, Business Continuity Plans ( BCP ) has been developed for all critical sectors, including subordinates and abroad subdivisions. To organize the crisis escalation processs and recovery attempts, the group established the BCM Command Centre and Recovery Centres ( Maybank, 2009 ) . The Key Benefits of the BCM Programme:
- Ensure continuity of critical concern maps and indispensable services within a specified clip frame in the event of disruptions/disaster.
- Minimise impact of the incident to the Group.
- Inculcate BCM civilization.
- Promote client assurance.
- Conformity with BNM demands.
By holding a proper BCM Programme in topographic point, the group is able to react efficaciously and in a structured mode in the event of disruptions/disaster, therefore guaranting concern continuity.
Fraud/Anti-Money Laundering Detection System ( FADS )
Harmonizing to the one-year study, the Bank has implemented the FADS which analyses tendencies and behavioral forms of banking minutess. Key Benefits include:
- Provide automated tracking and describing procedure for the sensing of most likely fraudulent and unnatural minutess.
- Facilitate monitoring of such sensings to extenuate possible pecuniary losingss on likely deceitful incidents perpetrated by fraudsters.
- Provide seasonably and effectual early sensing for immediate actions.
The system facilitates sensing of unnatural behavior in histories thereby enabling prompt action to be taken to restrict possible losingss.
Looking in front, in order to back up the group ‘s regional aspirations, ICT substructure must be able to confront the challenges, demands and rapid growing of the concern in a hard planetary economic system. ICT has already commenced restructuring activities to streamline all IT and its related activities, procedures and services under a individual cohesive control for better administration and superior quality service. Although the bank presently has different systems implemented to cover with the different types of hazard, a better and more efficient solution would be a individual system that is made to cover with all the different hazards.
The banking industry is invariably saturated in new regulative, market, and operational demands that demand greater concern transparence and penetration. Banks must now unwrap more information and manage more cardinal public presentation indexs to turn to new hazard and conformity issues efficaciously. These challenges have made the banking IT environment much more complex and dearly-won to keep. Many Bankss, including Maybank, normally manage multiple information silos for single lines of concern and use immense attempt and cost to accommodate the information from those silos. This is characterized by excess interfaces and informations that is inconsistent, inaccurate, or both.
All excessively frequently, Bankss do non hold the timely control they need over their concern processes or the quality of their offerings. Leading Bankss have found that they can cut down costs and significantly increase the quality of their information by incorporating the architecture for finance and hazard direction. This manner, they are able to make a “ individual version of the truth ” for information direction that addresses the concern and operational challenges that face the industry today.
Maybank ‘s demand for the enablement of informations integrating from a centralized database and seamless substructure, which allows for informations excavation and analysis is rather ambitious. However, there exists a system that provides a solution to the job stated. Analytic solutions from SAP can assist Bankss construct a centralised beginning of accurate, up-to-date information and do that information available throughout their establishments. The solutions provide support for concern intelligence and fiscal public presentation direction every bit good as for the direction of administration, hazard, and conformity. A to the full incorporate architecture for finance and hazard direction helps Bankss more efficaciously handle ratings for a broad scope of fiscal instruments and step success and hazard across their value ironss. The SAP solution for banking would hence be the best for Maybank.
SAP Solution for Banking
As mentioned earlier, in order to do concern determinations that are both timely and appropriate today, a bank must be able to incorporate, analyze, and study on ever-increasing volumes of information every bit rapidly as possible. Once you have used this information to plan your cardinal concern schemes, you must aline those schemes across your establishment and guarantee that they are to the full supported by concern procedures throughout the bank.
In add-on to the coverage and dashboard maps of concern intelligence package, the analytical banking solutions from SAP will give Maybank greater real-time control of cardinal procedures for closed-loop optimisation of concern public presentation – from scheme to executing and back once more.
Specifically, SAP® BusinessObjects™ solutions deliver the functionality to aggregate, cleanse, manage, and visualise informations at the velocity of concern. It can verify and incorporate informations, increase organisational transparence, and better the apprehension of hazards across the endeavor. With accurate, up-to-date information, the organisation can weigh and pull off hazard factors to happen new ways to cut costs while traveling with legerity to acknowledge and capitalise on chances and crush the competition.
Maybank ‘s Business Challenges
The obvious challenges faced by Maybank include:
- Connecting separate procedures and silos of informations to better transparence and better understand endeavor hazard.
- Assessing and pull offing hazard to enable plus rating, prevent fraud, and optimise conformity.
- Leverage big volumes of concern informations, frequently isolated in staccato silos
- Comply with a host of ordinances and criterions
Although the bank presently has steps in topographic point to cover with the mentioned challenges, the greatest job is that each solution is separate i.e. different systems are used to cover with the different countries of hazard direction. This therefore means that at the terminal of the twenty-four hours this information still has to be consolidated.
Key Features of the Solution
The SAP solution has the following cardinal characteristics:
- Data integrating – Gathers, integrates, and manages informations to supply a individual version of the truth and better visibleness
- Conformity and transparence – Enables and demonstrates conformity with province, national, and international ordinances
- Market hazard direction – Increases visibleness into market hazards
- Credit hazard control – Centralize procedures for recognition hazard administration and provides consistent, farinaceous informations. It besides enables conformity with recognition hazard criterions and ordinances
- Operational hazard control – Takes a incorporate, flexible, extensile attack to put on the line direction, scheme development, and regulative conformity
- Access and procedure control – Automatically identifies and controls entree misdemeanors and controls for cardinal hazards
Business Benefits Expected
The chief benefits include:
- Predicting, preventing, and pull offing hazard with a foundation of trusted, integrated informations
- Reduced costs and loads of conformity by alining risk-based procedures with schemes and monitoring controls
- Increased competitory advantage by aggregating, apprehension, and extenuating hazard factors in item
- Improved efficiency with fast, enterprise-wide entree to critical information
SAP Software Features in Detail
To pull off hazard decently, Maybank should consolidate and incorporate informations to make a individual version of the truth. SAP BusinessObjects solutions allow you accomplish that aim by enabling informations integrating, informations quality, and the direction of maestro informations, metadata, and unstructured informations. It can normalise different types of informations utilizing your metadata theoretical account, graduated table hazard processes to function the full endeavor, and keep all stakeholders accountable to the same conformity and hazard criterions.
The solutions include powerful functionality to back up informations cleansing, life-cycle direction, security, rapprochement, and standardisation procedures. SAP BusinessObjects solutions can be deployed on an enterprise-wide graduated table to to the full complect informations and procedures, or it can be implemented on modular constituents to accommodate concern demands and budget restraints. Regardless of the deployment attack you choose, SAP BusinessObjects solutions provide sophisticated functionality delivered with a user-friendly, role-based interface to cipher and aggregate market, recognition, and operational hazards.
Pull offing Market Risks
SAP BusinessObjects solutions provide informations direction functionality that allows the bank to increase visibleness into market hazards and aggregate them accurately. With powerful visual image and coverage functionality, you can break understand and portion informations. The solutions enable big fiscal organisations to incorporate proprietary theoretical accounts into endeavor hazard direction solutions.
Controling Credit Risks
The analytical functionality in the SAP for banking solution portfolio centralizes procedures for credit-risk administration and provides consistent, extremely farinaceous informations. This enables conformity with complex credit-risk criterions and ordinances, such as Basel II agreements. By complecting with this analytical functionality and other nucleus banking engines, SAP BusinessObjects solutions let you find the minimal capital demand for recognition hazard by ciphering hazard weighted assets. SAP for banking solutions besides facilitate supervisory reappraisal with audit functionality and promotes market subject with a flexible coverage construction.
The support for Basel II conformity within SAP includes bound and recognition portfolio direction related to regulative and capital demands. You can integrate regulative demands into internal hazard schemes to supply a sound footing for pull offing all countries of recognition hazard. SAP BusinessObjects solutions besides leverage the analytical functionality of the SAP for banking solution portfolio to better the coarseness of your recognition underwriting. This is done by adding the ability to read and analyse unstructured informations from multiple beginnings via automated informations aggregation and organisation functionality.
Minimize Operational Risks
With traditional hazard direction patterns, fiscal services houses can merely categorise losingss due to employee or external fraud, systems failure, or regulative mulcts at a really general degree. SAP BusinessObjects solutions provide the visibleness into endeavor informations to quantify the impact of different types of losingss specifically and accurately, so that one can adequately implement and document regulative conformity.
SAP BusinessObjects solutions enable a incorporate, flexible, extensile attack to put on the line direction, scheme development, and regulative conformity. You can advance concern viability by uniting corporate scheme with operational enterprises and loss extenuation patterns across the drawn-out endeavor. With better information visibleness, you can carry on sophisticated predictability and public presentation analytics. This incorporate attack is made possible by the SAP NetWeaver® engineering platform, which extends the full functionality of SAP BusinessObjects solutions across the endeavor and beyond.
The solutions support a procedure attack to identifying, valuing, and extenuating hazard. As a consequence, they allow uninterrupted control to assist pull off concern procedure and public presentation hazard across cardinal fiscal activities and conformity enterprises. One can supervise the overall hazard portfolio and instantly watchful direction when high-impact and high-probability hazards exceed company-specific thresholds.
Enable Process Control
The bank can implement machine-controlled controls for cardinal hazards with control monitoring, manual control trials, and self-assessment functionality. It can besides command libraries and supervise critical constellations, concern minutess, and IT controls across applications. By enabling procedure control, SAP BusinessObjects solutions help you increase efficiency, cut down costs, and velocity clip to value.
You can use and incorporate SAP spouse solutions to pull off the filtering of sensitive informations through routers and corporate firewalls, protecting societal security Numberss, recognition card Numberss, and other sensitive informations from exposure. This enables them to pull off the complete life rhythm of client informations and supply secure, trusty service to your clients. SAP BusinessObjects solutions besides include process engine functionality to assist design and automate extenuation schemes to heighten your legerity in reacting to concern hazards and chances.
Analyze and Distribute Key Information
SAP BusinessObjects solutions give the endeavor greater visibleness into accurate, integrated informations. A individual can bore down into implicit in hazard Numberss for farinaceous penetration and perform sophisticated analysis with ad hoc question and intelligent hunt functionality. Powerful visual image and user-friendly, role-based splashboards give stakeholders across your organisation entree to the information they need when they need it.
PROPOSED SAP IMPLEMENTATION Plan
Since Maybank already uses assorted systems, it can be assumed that the group used updated computing machine engineering ; hence computing machines may non be a job. The chief challenge is hence how to ease the integrating of the different hazard direction maps into one centralised database.
It is of import that the top direction and information engineering officers of the bank get involved in the undertaking execution program right from the start to the terminal. This is because they need to guarantee that the solution meets the specific demands of Maybank, and to do certain that whatever they had envisioned for the company solution is really implemented.
The proposed stages are a measure by measure attack and they run from the start to the terminal. They take a period of at most five old ages.
Phase 1: Undertaking Analysis and Design
At this phase of the undertaking, the of import thing is to analyze the bing construction of the systems in usage and to plan a vision program for the hereafter of the bank. This will do it possible to plan a model that will enable the debut of SAP into the bank without interfering with the already existing databases. Since the systems in usage are different, this means that there exist silos of databases. Hence it would be necessary to analyze the databases and design a manner through which all the information from the different databases can be integrated into one i.e. into SAP. At this phase, information engineering officers from the different subdivisions of the bank besides need to hold meetings where they compare and portion thoughts. This is to guarantee that the undertaking is carried out the same manner in all parties involved.
Phase 2: Construction and Testing
Once the information has been analysed and a model has been designed, the package developers so come in to map SAP into the availed designs, while at the same clip proving the different functionalities that are expected. This is done to guarantee that any misconceptions, mistakes and skips are corrected in good clip. At this phase, the undertaking besides becomes more existent since through testing, the direction and forces involved can prove out and experiment the different functionalities of SAP.
At this phase, a clear differentiation can be seen between how activities were carried out antecedently and how the activities will be carried out with the execution of the new SAP solution. Through this procedure, the bank forces can get down stating the benefits of the new solution on their ain.
Another of import factor at this phase is the development of a catastrophe recovery scheme, to cover with any complications that may originate during the existent undertaking execution e.g. guaranting all the database is backed up.
Phase 3: Execution and Training
During this stage, the existent execution takes topographic point. Since the testing has already taken topographic point, precautional steps have been taken e.g. guaranting the databases are backed up before really implementing the package.
Once the execution is complete, the bank forces need to be taken through preparation to heighten alteration direction. Since they were antecedently utilizing a different system, they need to be familiarized to the new SAP system characteristics and functionalities.
This will further guarantee accurate informations is input by the forces hence the records that are finally availed to the direction for analysis and determination devising will be accurate, up-to-date and dependable.
Phase 4: Sap Goes Live
Finally, after the execution has taken topographic point and the forces have been trained, the SAP system will finally travel live. This means that the bank will halt utilizing its old systems wholly and will merely depend on SAP. At the same clip, forces will be available to offer support to Maybank in instance demand arises.
We believe that through the execution of the SAP solution, Maybank will be better placed in the market since it will hold a centralised hazard direction solution. This will enable it to hold an even greater competitory advantage than in presently has.