The document discusses digital banking and the challenges facing established banks. It describes how digital transformation through initiatives like the Hewlett Packard Enterprise Digital Banking Framework can help banks address these challenges by improving efficiency, agility, control, and quality. The framework utilizes technologies like robotic process automation, workflow management, and self-service portals to streamline processes, reduce costs, and improve the customer experience. When implemented correctly, the framework can potentially increase a bank's productivity by up to 46%.

1. FSI Key Propositions
Digital Banking
Brochure

2. Banks are facing significant challenges: the emergence of FinTech companies, mergers and integration activities,
low interest rates and their impact on financial results, new ways of communicating with customers, increasing
regulatory requirements, and more. Organizational changes are necessary to address new threats and exploit
new opportunities, bringing each business to a “new style of banking” – one that is more closely aligned with IT,
able to react quickly to the changing business landscape, and even anticipate its evolution.
Moving to the new style is complex, especially for
established banks. They have to run an already complex
business based on standards and process consolidated
across decades of experience; they must manage efficiently
a wide variety of platforms, often including mainframes and
legacy systems; and they have to satisfy increasingly strict
compliance requirements. How can banks both innovate
and manage today’s business effectively?
The answer often lies in a transformational approach.
Organizations need to reconsider their mission and
operational model, and redefine some of the fundamental
aspects of their business, which may result in stopping
some “traditional” services and starting new ones. Digital
banking is often the key enabler for this. By bringing
a simplified, transparent and flexible “IT utility”, which
can follow the changing business rules, digitalization
improves today’s efficiency and allows gains to be
reinvested in innovation and agility (“change-budget”).
Many banks across the world are announcing significant
IT transformation initiatives. Such initiatives are based on
long-term plans aimed at making access to IT more agile,
and they are often based on a strategic partnership with an
IT leader that can advise, contribute proven experiences,
share the transformation risk, and provide or broker the
desired technologies and skills.
Digital banking, as a key enabler to the new style of
banking, must bring tangible advantages. Banks and
strategic IT partners can agree on a transformation agenda
and on a set of key performance indicators (KPIs), often
related to business metrics (e.g., time decrease for bank
operations, reduction in TMO, and improved customer
satisfaction) allowing all parties to monitor the impact of IT
transformation efforts.
For the banking sector, these expected business outcomes
provide evident benefits; they can be grouped into some
main categories:
The digital transformation of a bank, in brief, is the combination of the digitalization of the different channels along
with the automation of the operating models. This ultimately produces better, cheaper, customized products, with
faster services, and an improved customer experience:
Digital
Channels
Digital
Transformation
Better, cheaper,
customized products,
faster service and
an improved customer
experience
Operating
models
automation
Digital Banking Transformation Journey
Definition of Digital Transformation
1. Address new customer expectations -
Banks used to have direct human contact, in branches
and offices, as the primary way to engage and interact
with users. But today customer expectations are
changing. Customers are becoming more demanding
in terms of time response and quality, so face-to-face
activities are increasingly being replaced by online
transaction systems, mobile applications, social
networks, and virtual human contact via chat or video
conference. Banks need to offer virtualized, always-
on, mobile services to a growing population of digital
users. These organizations also need to leverage new
information channels, like social media, to communicate
and understand customer needs.
2. Improve Regulatory Compliance – Following
the global financial crisis, governments and industry
organizations are demanding greater transparency,
more information, and comprehensive audit reports.
3. Gain competitive agility – New players, such as
fully online and agile startups, are entering sectors
such as electronic payments and virtual money, and
taking away a significant portion of end users from
traditional service providers. Moreover, companies
outside the financial sector, such as large telecom
operators and retail stores, are also increasingly
offering competitive banking services.
4.AchieveIT costtransparency–remove silos
The banking sector is today the most “IT siloed” of
all industries, as a result of numerous mergers and
acquisitions, and historical operating procedures that
strictly separate some business processes. Platforms are
also not homogeneous, with a concentration of legacy
systems with cost and integration issues. The resulting
IT landscape is very fragmented, and costs are difficult
to estimate and therefore difficult to control.

3. Digital transformation helps to achieve the following customer goals:
The main concepts used to achieve a complete digital
transformation are:
a. Straight Through Processing (STP) On
average, more than 50 percent of banks’ costs relate
to staffing – the sheer number of people necessary
to process customer transactions. This is mainly due
to incomplete automation of the service processes.
Therefore, STP is about paring back to an absolute
minimum the human input required to process
transactions with substantial error reduction and
quality improvement. For example, if a customer
creates a standing order online, with STP the whole
process is automated from start to finish; no human
input is required. Banks should identify their STP
throughput rates and try to dramatically increase
them. Also, with less cost per operation, this allows
banks to expend less run-budget and expand their
change-budget.
The Hewlett Packard Enterprise (HPE) Digital Banking Framework is an HPE-built industrialized digital factory-like
framework for banking processes which enables business process automation and improves operational excellence. In
addition, it enhances business process services with back office transformation; by increasing scalability and flexibility,
banks can absorb additional services and volumes at a flat or marginal cost increase while maintaining EGM.
Hewlett Packard Enterprise
Digital Banking Framework
b. Self-service channel usage By giving
customers more power and responsibility for carrying
out their own banking activities, there will be less need
for human input from the bank, with obvious cost
implications. However, banks should remember that
moving a process to a self-service channel without
adequate planning risks inadvertently increasing the
cost. Inviting customers to bank online increases the
number of transactions carried out. If you don’t automate
these processes, eventually you will need more people
simply to handle the increased number of transactions.
c. First-time resolution (FTR) This means that
processes are resolved immediately at the first point of
contact with the customer, whether this is in a branch
or a contact center. For example, if a customer wants to
open an account, they are able to do it there and then in
one go, without needing multiple contacts with a bank
employee or contact center to complete the transaction.
This contrasts with the current centralized model in
which the vast majority of transactions end up in central
operations. FTR will only work effectively and cut costs
if the underlying transactions abide by STP principles.
Savings
• Budget reductions /
incremental activity
absorption with decreasing
marginal costs
Agility
• Accelerated accommodation
of regulatory changes
• Reduced time-to-market
Control
• Operational risk and
variance reduction
• Traceability of states and
activity levels
Quality
• Error decrease
• Cost decrease
• Less run-budget
• More change-budget
Supported by advanced technology architecture, a powerful
BPM integration tool, a comprehensive document management and
processing system, and an SOA service layer
Integrates with existing legacy and core banking systems
It’s a transformation framework for financial business processes
Leverages 43 technology components capable of automating key
steps in business processes
Designed by HP to transform financial operating models
HPE Digital Banking Framework enables
banks to define processes and redefine
and assign in-house staffing resources
in accordance with complex operational
requirements.
In addition, in terms of quality and
monitoring, banks are better able to manage
based on KPIs and SLAs, increase the STP
rate, reduce manual processes, standardize
processes, minimize exceptions, and make
continuous process improvements in terms
of efficiency and quality.
This framework also allows for a certain
degree of scalability through tactical
application tools. It also provides service
platform definition and design, and
supports service platform implementation.

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Packard Enterprise products and services are set forth in the express warranty statements accompanying such products and services. Nothing herein should be
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Implementation of the HPE Digital Banking Framework produces the following achievements:
Work allocation: Automatic work allocation to appropriately skilled workers; pushes work ítems and automatically tracks
time/motion; work is delivered by SLA priority, FIFO, or supervisor override and integrated workforce management
Image viewing: Automatically presents an image with each work ítem and an auto index for created documents
Customer information: Systematic pre-validation and seamless user interface (UI) integration of comments.
Primary Application: Common process-oriented UI front-ending for multiple applications and presents a highly-efficient
process-oriented user interface.
Customer notification: Automatically produce documents and rules based determination of paragraphs, copies, etc.
Comments and work entry: Automatic and integrated tracking, and seamless update of operational statistics.
The HPE Digital Banking Framework produces a series of productivity gains that could be up to 46% depending on the
initial maturity level of the processes. The different levers used to obtain the efficiencies are:
1. 5% - Best-practice BPS processes deployed across regions
2. 10% - Global Operating model: Global policies, common processes, and standard operating procedures, process
driven delivery organization, standardization of data, and streamlined reporting and resource planning
management (iWom)
3. 14%-Robotics process automation: Business process re-engineering aligned with artefacts deployment (data
capture robotics, automated file classification, desktop activity capture, logical treatment of lists, text pattern
recognition and others), digital-enabled technology such as e-Forms, workflow and case management, and
reduction in exceptions/increased straight-through processing.
4. 15% - Consolidation to best-shore model, staff pyramid resizing and regrading
5. 30% - Extensive use of self-service: Portal for customer queries and access to reporting tools
6. 46% - Overall productivity and gain