Information Technology Trend in Development Banks Alberto Rosati – Latin America Banking Business Development

Prelude The dramatic events ushering in the new centuryfrom globalization and a final, major wave of consolidation to regulatory changes and technology breakthroughsare compelling development banks[DB] to turn their focus toward efficiency and country relationship development.* 2 *Goliath Industry and Market Reports on Bank Systems and Technology

Is real IT transformation likely to take place? Three converging forces appear to make it unavoidable: DBs spreading across geographies Financial transactions are commoditized Regulatory demands are unprecedented. 3

Drivers to IT transformation The next 10 years will be defined by: Accelerated expansion Process efficiency Greater Country sophistication More intense regulatory demands Opening up markets in existing and new member countries 4

Challenges Faced By Development Banks DBs require real time system control on their operations DBs are unable to effectively track the development results The credibility of the financial reports becomes questionable Systematic Development Bank-wide management of data Risk measurement and management is becoming increasingly complex 5

Advantage IT An effective IT Solution provide: Operational effectiveness, internal efficiency Collaborative tools to help create, cultivate, and disseminate knowledge. Accessibility to data, information, and knowledge. The ability to easily search across and retrieve relevant information A project management system based on complete project lifecycle A resource management system which improve linkages 6

Plan for 21 st Century IT Transformation Focus on improving the internal efficiency and Country centricity Go horizontal… Make the transition from banking operations in silos to an integrated organization. Balance objectives in IT strategy… Balance the use of technology resources to support revenue growth Focus on governance… IT to align with business strategy to improve returns on IT spending. Strategies addressing enterprise architecture, process automation and member analytics 7

Need of the Hour The information systems and technology infrastructure must be improved to: support the results-based agenda and Align the systems with the new organizational structure. And to support DBs three major information systems initiatives: Knowledge management Project processing and portfolio management Program resource management 8 Latest Facts: World Bank IT strategy took the approach of building up integrated systems for sharing of information with member countries IFC has provided the user interfaces to access existing information, while gradually replacing the older mainframe systems IDB has developed facilities using portal technology to provide access to many disparate systems. IADB is planning for implementation of Integrated IT Roadmap to synchronizes their ORG structure ADBs initial portal applications are designed to provide access to knowledge management applications Source- ADBs information Technology Strategy and Capital Expenditure Requirements: 2004–2009 and IADB website

Identify the IT Role … 9 IT enhances the capacity to review project processing and portfolio performance IT monitors performance against Millennium Development Goals IT facilitate tracking of activities and investments under development Initiatives IT systems provide the tools to report on project performance at each stage IT supports improved planning, management, and reporting on resource management IT supports documentation on study reports for evaluation and record lessons learned

Hot Solutions for DBs A comprehensive solution should synchronize with business operations. Some of the latest solutions are: Lending Solutions with an eye and ear to the ground Innovative Knowledge Management Solution A comprehensive IFRS solution An effective development outcome tracking system Creation of Central Repository -Operational Data Store(ODS) Setting up of an extension of DBs IT Department in a cost effective professional atmosphere-Offshore Development Centers(ODC) 10 Source-IFC Capital Budget 2008

11 Financial Database Controllers Data Warehouse Loan Database Other Systems Loan Kiosk LAS WEB, LTS,Loan System Loan Data Warehouse Loan Database Client Connection Loan WEB, Loan Tracking System, Loan Administration System [LAS] Loan Administration Database Integrated Loan Administration Platform e-Loan System

12 Identify Knowledge Discovery Tools Data Mining Test Retrieval/Mining Identify Knowledge Discovery Tools Data Mining Test Retrieval/Mining Create Thinking Aids Conceptual Mapping Create Thinking Aids Conceptual Mapping Diffuse/Use Decision Support Groupware Video Conferencing Diffuse/Use Decision Support Groupware Video Conferencing Knowledge Database Document Depositories (Data Warehouse) Knowledge Database Document Depositories (Data Warehouse) Collect/Codify Information Feeds Intelligent Agents Collect/Codify Information Feeds Intelligent Agents Infrastructure: Networks-Internet ; Intranet Knowledge Management(KM) Latest Facts: ADB A KM-framework was created in 2002.In June 2004 IT strategy was implemented. AFDB The Banks knowledge management capabilities have been upgraded through the introduction of an Integrated Knowledge Management System via intranet and internet sites. Source-Knowledge Management for Development Journal, Vol 1, No 2 (2005) and AfDB Annual Report 2005

ODS Overview ODS is a central repository for corporate-wide data sharing Data from transaction systems is loaded in the ODS Stores historic data from transaction systems Provides view for other systems for their central reference ODS-design establish an efficient mechanism to store and retrieve valuable business information. 13

Advantage ODC Infrastructure, Security as per clients Office Standards Savings in capital expenditure Retention of Knowledge - Business and Processes Accountability for Productivity and Quality of Deliverables Resources 100% dedicated to Program at a blended rate ODC operating in a different time zone speed up development time Flexible Pricing model (T&M, Fixed Price, Hybrid) 14

Takeaways … Information on how IT mitigate DBs business challenges The universal high level IT roadmap Information on comprehensive IT Strategy Sharing of IT experience in developing solutions for Development Banks 15

16 Alberto Rosati – Latin America Banking Business Development