TrustBank Implementation Case Study

AGENDA

Overview of Bank Reasons GDCCB changed their

legacy system Problems GDCCB faced previously Preliminary Business Requirements Scope of Implementation Project Details Transition Approach Implementation Business Model, Business Strategy Infrastructure Management

Post Production Support Banking community Implementation Take-Away Benefits of TrustBank introduction Higher ROI, lower TCO Program Organization Structure Milestones and Phases Summary

OVERVIEW OF BANK

Gadchiroli District Central Coopearative Bank is the class ‘A’ Bank. The Bank is mainly involved in the agricultural financing and government fund distributions. Apart from it bank is also functioning in the area of consumer lending and corporate lending which contributes more than 40% of the bank’s total revenue. It is one of the largest bank in the Region by assets, and by number of locations. As per the earlier guideline through RBI , the bank was restricted to operate within the district. Being a Class A Bank and recent Audit by RBI they are allowed to operate in multiple districts across entire state.

Size of bankAsset Size – over 7.8 Billion INR.Number of branches – 46 branches, 6 Extension CountersATM Terminals – 7, RTGS/NEFT - YESNumber of customers – 5,09,956Number of Accounts – 5,14,050 (of which 39,422 corporate & 4,74,628 retail)

OVERVIEW OF BANK

Products offered by the bank

The full range of products for retail, corporate, treasury, etc. A set of different channels for offering bank’s services & products in “real time” – Cards,

National Payment, internet banking – retail & corporate, SMS/e-mail notifications, Mobile phone banking, Scoring, etc.

Reasons for the implementation

Migration from existing platform due to old legacy system being unable to support the banks rapid expansion (doubled, in asset size, in one year)

Existing platform did not support integration with new channels – internet banking, on-line card authorization, mobile phone payments, etc.

Need for a more robust platform and availability of resources for its support and further development.

Need for quicker time for market – fierce competition in a rapidly expanding financial services market.

The bank’s desire to change the bank’s business and operational model from de-centralized to centralized.

OVERVIEW OF BANK

Historical Note

1998: 5 branches (out of initial 30 branches) given to TSS for Computerization with TBA version VB-5 + 1 to other vendor.

2001: 5+3 Branches shifted to Version VB-6 + 1 branch from other vendor converted to TSS TBA application version VB-6

2004: Additional 7 branches shifted to TBA version 2007: Additional 16 branches order received (VB-6 version) 2009: Conversion into CBS for 32 branches 2011: Rest of the branches added into CBS 2012: The CBS is running Live with all most of the features in use.

PROBLEMS GDCCB FACED PREVIOUSLY

Numerous problems, such as:

Inability to integrate with new electronic channels, scoring systems, etc.

Inability to introduce new competitive products to market, such as flexible mortgage, consumer loans, and various deposits

Inability to process in “Real time” card and internet banking transactions

Inability to produce in short time sophisticated reporting and analysis both for internal and external usage

PRELIMINARY BUSINESS REQUIREMENTS

GDCC bank started in early 1985. Looking for:

Easy integration/interfaces

Depth and breadth of functionality

Quick time to market

Internationally recognized vendor/solution with local presence in India

Scalable and Capable solution to meet their expansion plan.

SCOPE OF IMPLEMENTATION

Lines of business & Back Office Operations

Retail Current Accounts Savings Accounts Term Deposits Retail Loans Structured Deposits Cheques National Payment Network Statutory & Compliance reports HR Management & Payroll Inventory Management Credit Appraisal Budget SMS & Internet Banking

PROJECT DETAILS

Core Solution Stack implemented

Our Role SI involved – TSS Consultants involved (from Bank’s side) – Private Consultants

Appointed

Relationship between , SI, partners and bank – back to back or independent contract Agreement between Trust Systems & Software and GDCCB was made for end to end

solution.

Roles and Responsibilities of different parties Trust Systems & Software – system integrator and implementer, Customization,

technical support and consultancy Private Consultants – Change management, Project monitoring.

TRANSITION APPROACH

Implementation approach

Phase wise approach with extensive stress testing and three full mock conversions.

The bank was already running on one system and splitting into branches was difficult, splitting of national settlement, central bank reporting, reconciliation and consolidation would have been very difficult and resource hungry.

The same would have prolonged the time for implementation and contradict the bank’s desire for full conversion and re-organization within 6 months.

IMPLEMENTATION

High level time lines for different phases PWT – 1 week – done by TSS GAP analysis – 2 weeks – done by TSS System initial set-up and parameterization – 4 weeks – done by TSS HW sizing and procurement (in parallel) – 2 weeks – done by TSS and IBM IT infrastructure and comm. lines upgrade and set-up (in parallel) – 6 weeks –

done by GDCC Bank System’s parameter and products testing – 2 weeks – done by TSS and bank Additional set-up and parameterization – 1 week – done by TSS Systems Integration testing (incl. parameters and products) – 2 weeks – done by

TSS and GDCC bank Train the trainers (in parallel) – 2 weeks – done by TSS Mock migrations and stress testing – 3 weeks – done by TSS and GDCC bank End user training (in parallel) – 4 weeks – done by TSS and GDCC bank Post Go-live support – 4 weeks – done by TSS

IMPLEMENTATION

For each phase Deliverables of the phase – Documents and sign offs for each of the above phases Resources (from TSS as well as bank) involved – numbers, types (technical, functional, PM,

testers, SME etc) TSS Sr. technical – 10 man months TSS – 30 man months TSS functional – 40 man months TSS PM – 6 man months GDCCB PM – 6 man months GDCC bank full time project team – 18 man months GDCC bank part time project team – 40 man months Oversight management strategies used Project sponsors (bank’s CEO and COO) introduced and Private Consultants appointed Project Steering Committee meeting fortnightly PRINCE II methodology followed Any bank specific step Compliance with RBI/ NABARD standards and Guidelines

IMPLEMENTATION

Data Migration

High level steps involved – strategy, data mapping, utility preparation, extraction from legacy to flat file, file to TrustBank, mock runs, testing, etc.

Data migration strategy developed by TSS, approved by GDCC bank

Data mapping conducted by TSS and approved by bank

Data uploads to TrustBank conducted by TSS, verified and approved by GDCC bank

Complete data is migrated to TrustBank

Challenges faced – data enrichment, data cleansing etc

Extensive and constant data cleansing, verification and reconciliation conducted together with GDCC bank

BUSINESS MODEL, BUSINESS STRATEGY

Program Organization was set up in the bank with precise milestones defined with project teams and responsible parties.

Before implementation bank was totally decentralized- each branch was like a subsidiary bank- admin functions, IT, all separate.

Defined a new business model and branch model, restructuring and centralizing important functions. Restructuring of all functions were going in parallel for 1-2 months.

INFRASTRUCTURE MANAGEMENT

Low-Mid (Expandable) level production hardware layoutType of machines used

IBM X3850 series Windows 2008 Server OS, SQL Server 2005 for database – Quad Core CPU for production with 64GB RAM,

IBM X3650 M3, Windows Server 2008 OS, TrustBank HOST SIX Core CPU 32GB RAM , Same Configuration for Backup System (for Database Server and Application Server)

Location of different machines

All HW located in GDCC bank Production data center with extra servers for SMS Banking, Internet Banking and ATM Interface

Network details

An Optic Fiber Network for all locations connected to main data center with bandwidth ranging from 128Kbps to 1Mbps depending on number of users in each location

INFRASTRUCTURE MANAGEMENT

Responsibilities for infrastructure

Hardware Sizing – TSS and IBM Procurement – GDCC bank and TSS(an IBM authorized reseller) Setup – IBM and TSS Maintenance – IBM and TSS Support – IBM and TSS

Third party software is maintained and supported by the respective software vendor in accordance with the GDCC bank internal rules and procedures

Trust Systems & Software (all in compliance with GDCC bank internal IT policy, rules and procedures) Setup – TSS Maintenance – TSS Support – TSS

POST PRODUCTION SUPPORT

Type of Support Local

Tools used Help desk system and Team Viewer is being used for issue tracking and resolution

Standard support methodology used

Support infrastructure Temporary access to the Production Environment is granted only for applying patches

and new functionalities

Permanent access to Test & Dev. Environments incl. at site and remote

Access to data – only access to Test & Dev environment data

Data patches – TSS was responsible; with temporary access being granted on a “need to have” basis

POST PRODUCTION SUPPORT

Methodology used for moving a fix to production – apply to pre-production, test and move

A fix or new functionality is first applied in Dev. Environment and tested by us

The fix or functionality is then applied in Test Environment by us and tested by the bank

After bank’s approval a temporary access to production environment is granted to us for applying the fix/functionality

BANKING COMMUNITY

Show cases and visits

Since “Go-live” there has been several site visits made by the other banks from india and other countries.

GDCC Development bank and its management are quite happy with hosting such visits

Success Story of GDCC Bank is appreciated by NABARD/ RBI auditors. The bank received Grade A and received permission to operate in other districts with the facility of NEFT and RTGS. The bank also planned to launch Mobile Banking and integration with NFS and internet banking.

IMPLEMENTATION TAKE-AWAY

What did we do right?

Close tracking Preventing scope creep Regular visibility to all stake holders Daily discussion of issues A wider consultancy on operational issues and processes and ways to optimize them A wider support and consultancy for issues outside the project scope but relevant for the

overall implementation – IT infrastructure, network set-up, IT processes and procedures

What could we have done differently?

Did not insist on the creation of full time dedicated bank implementation team from the start of the project. The subsequent hand-over of responsibility from us to the bank was longer than desired.

Following from the above, it also took longer for the bank personnel to get accustomed to the new processes and applications

BENEFITS OF TRUSTBANK INTRODUCTION

Interfacing with Multiple Delivery Channels

Domestic Payments enabled staff reductions and faster and more reliable services to customers

An on-line and timely reporting enabled all levels of management for easy analysis and fast response to market trends and customer’s needs

A range of new products have been introduced and new customer growth rate increased, from 15% to 35%, on a yearly basis

A range of new services introduced such as ATM, SMS banking, internet banking, and reporting

Customer scoring system interfaced to TrustBank reduced the average time for decision making from 2.5 days to 6 Hours

HIGHER ROI, LOWER TCO

The bank’s IT department head count was reduced by 42%

The bank’s back office operations department was completely centralized and head count reduced by over 50%

The bank’s front office personnel was relieved from back office duties and entirely focused on sales and customer services

Customer’s information gathered, stored and analyzed has increased by over 70% for retail customers and over 50% for corporate ones

ROLES AND RESPONSIBILITIES

Role Responsibilities

Steering Committee

• Approving and changing the scope of the Program according to the master plan and budget.• Reviewing the regular Program status reports and proposing solutions regarding tasks

implementation required by the Director. • Tracking task implementation at the regular Steering Committee meeting where the Director

presents the Program progress and the necessary solutions. (incl. proposing solutions)• Making final decision regarding the Program

Program Director

• Preparing implementation plan (with the Project managers if necessary)• Distributing tasks to the responsible persons• Tracking task implementation during the meetings of the Program• Coordinating different tasks with counterparties, consultants and other external resources• Coordinating obligations and responsibilities with Project Managers• Preparing the Program regular status reports for Steering Committee• Presenting Program status and informing Steering Committee for necessary solutions• Collecting budget status report from line management

Project Managers

• Preparing implementation plan (with Project team if necessary)• Distributing tasks to the responsible persons• Tracking Project task implementation • Presenting Project status report at the regular Program meetings• Responsible for the approval of all Project products• Presenting all requirements for project changes to the Program Office• Reporting all issues which could not be resolved within the Project• Informing Program Director about all delays of the initial plan deadlines

ROLES AND RESPONSIBILITIES

Role Responsibilities

• Proposing ideas and expert opinions• Working on tasks defined by Project Manager• Preparing the necessary documents and analysis connected with the Project products

Project Management Office

• Information Center for all questions regarding the Program• Archiving and renewing Program master plan• Managing processes for task solution, change requests, approval for Project products• Archiving and renewing central registers and documentation regarding issues, change requests,

approvals of Project products• Preparing and renewing Project participation list• Reviewing project status reports and preparing Program status report• Organizing and taking minutes at Program and Steering Committee meeting • Providing on time accurate information for forthcoming changes for all employees of the Bank,

organizing meetings and preparing newsletters

Investment Control

• Supporting Program Management with new ideas and proposals for issue solutions and problems

• Controlling quality and professional preparation of all Program products• Reviewing the results and products of the Program and proposing approvals

Project Members

MILESTONES AND PHASES INTRODUCTION OF TRUSTBANK

Milestones Deliverable

Planning of deliverables connected with introduction of bank- information platform of TB “GDCCB”. Developing detail plans of the project plans for tests, migration, training and adoption.

A plan for PWT ***A plan for key users’ training*

(PWT) The bank’s team is introduced to the basic functionalities and the architecture of TrustBank

A protocol for completion approved by the leader of the team

Analysis of the existing bank products and defining their place in the functionality of the bank- information platform (product fitment).

A product catalog of the present products in GDCCB**A product catalog of the future products in TrustBank*

Parameterization and Product set-up of TrustBank A protocol for completed parameterization of the products from the Product catalog

Preparing data base for System Integration and UserAcceptance tests

A protocol for completed installation of the data base and TrustBank application

UserAcceptance test - plan, preparation and accomplishment

Making up test scripts***A protocol for correctness of the test scripts results

MILESTONES AND PHASES INTRODUCTION OF TRUSTBANK

Milestones DeliverablePreparing the formats for data migration Making up tables for data migration*

Data migration from the existing systems in TrustBank.

A protocol for correctness/ faithfulness of the migrated data

System Integration test plan, preparation and accomplishment

A plan for System Integration test*A protocol for correctly completed System Integration test

Trial conversion and stress testing A protocol for trial conversion

Train the trainers A protocol for completed training the important/key users

Go-live – big bang A protocol for successful putting into operation for every single branch

Support and optimization (tuning).

MILESTONES AND PHASESDEVELOPMENT OF INTERFACES TO THE BASIC BANKSYSTEM

Milestones Deliverable

Analysis of the requirements to the interfaces Interface Requirement Specification Document**

Design, functional specification of the design and architecture

Interface Functional Specification Document*

Development and introduction Documentation

System Integration test plan, preparation and implementation/ fulfillment

A system integration test plan*A protocol for correctly completed system integration test

Documentation Technical, System and Architecture interface documentation*

MILESTONES AND PHASESEXPLOITATION OF CENTRALIZED REPORT SYSTEM

Milestones Deliverable

Analysis of the requirements to the Centralized report system

Application Requirement Specification Document**

Design, functional specification of the design and architecture

Application Functional Specification Document*

Development and introduction A protocol for introducing the application/system/product

System Integration test plan, preparation and fulfillment/ accomplishment

System integration test plan*A protocol for correctly completed system integration test

Documentation Technical, System and Architecture interface documentation of the application/system/product*

Support and tuning ---------------

IN SUMMARY

This was the first project of its kind, considering its scope and functionality covered. The implementation was done by TSS and successfully completed within six months.

ANY QUESTIONS ?

Contacts:Trust Systems & Software (I) Pvt. Ltd.11/4 I.T. Park, Gayatri Nagar,Nagpur, INDIAInfo@softtrust.com

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