Ex-Decade with IoT

By Pradeep Pavaluru

This is year 2025, the past decade has seen some of the significant disruption in the tech world, and one among many disruptive technologies is the "Next Big Thing", the IoT. This influenced and empowered growth in multiple folds with enterprises that had huge bets over last 10 years.

The IoT started with a hope of changing the M2M (Machine to Machine) communication, and it was taken with a surprise and became most disruptive among things. In many ways, this changed domains and verticals on how to communicate, work and collaborate with insights on analytics, monitoring, mammoth data and data lakes.

The world has witnessed this change, and I was part of this complete tech shift (like the tectonic plates) over last few years. The things, especially in the IoT space have grown in both ways, where devices are getting smaller and smarter with more capable and powerful instances. Following are few fields worth a mention based on my recall cap:

Healthcare: The last decade has seen a significant impact in the human lives and their sustenance. Numerous numbers of IoT devices and applications are helping track minute-to-minute changes in the human body. Along with this, parallel monitoring has also commenced by the respective enrolled hospitals, which give an extended life for about 60 days. In case of an emergency, devices and applications have capabilities to give instant diagnostic references and inform emergency dispatch units.

Financial systems: The concept of e-wallets has changed from my era; no need to carry your mobile as well.

Thanks to HoloLens (from Microsoft) and a host of other vendors for providing solutions on Hologram technologies. Today, we use no more plastic cards. With the help of Hologram technology, your body will act as the approver for your bills, payments, etc.

Utilities and Home: A decade ago, we use to hire maids for cleaning, cooking and house hold activities. But, now, it's been serviced by intelligent devices, controlled by a single tap on my smart screen. With the devices in place (smart metering for utilities), the devices will generate a bill and push for the payments (10 years back, we used to stand in queues or experience heavy website traffic etc.) and also renews automatically.

Counter Terrorism: With Internet of Things, we are able to successfully counter terrorism activities in and around Line of Control (LOC) by the use of:

• SmartDogs help in sniffing the danger and identify trails of scent; it can cover an area of .5 Square Km. In India, for example, there are around 2 million Smart Dogs deployed in and around the country borders, which regularly transmit data for analysis.
• iBeings / iBorgs are planned as another option and currently under Beta testing through the usage of power of device clouds (controlling an army of intelligent devices). Also, these Borgs can be bought to perform riskiest jobs like under-sea exploration, deep jungle scanning, exploring the live volcano, and so on and so forth.

Smart Cities: With many cities being converted to smart ones, India is already registering 12 smart cities - fully functional, having commendable control on security, safety, reliability and economics. People who live in smart cities can control several things with the power of internet with their own devices.

Deep Space Explorators: Those who can afford the advanced SE (Space Explorator - works on any energy source), which has loads of intelligent devices on board, can do so. They can control their exploratory missions on where, when and how. SEs can conduct a complete degree2degreemission on any alien planet.

Future: India has become a one stop place for all the latest trends in disruption and the world is looking up to us for the Next Big Thing. A lot of startups are working towards that "next big idea", and we never know what that next is going to be. Let us hope for a safer and tech savvy future. The days are not far behind, where family / friends can go for an outing / tour anywhere in our galaxy.

Caution: I see you are very excited after reading the blog, before you search for any keywords / topic in this blog, please read my first sentence again.

Business Intelligence in Banking

By Rama Naik

In today's highly competitive technology driven business world, where businesses and technologies change at a rapid pace, there is a need for a strong customer retention program, competitive marketing strategy and enhanced products, with tactic promotion plans. To build the strategy and enable quick decision making, one has to perform continuous analysis, measure, monitor and manage the data. Business intelligence reports play a major role as they are more advanced with the competitors and help with quick decision making.

Why BI in Banking?

As the banks expand their business geographically and grow bigger in size, they capably formed multiple branches across international markets and connected through networks. The data stored by banks in different silos and the volume of data generated became very large. Manual operation in this scenario will be extremely time consuming and has many drawbacks. Also, generic reports may not give complete insights about the business. The lack of a coherent and integrated analytical framework drove the industry on analyzing the data and build a robust intelligent system for rapid decision making.

Therefore, the need is to have the right business intelligence tool to carry out effective business problem analysis and build successful strategies which can speed up decision making to improve and expand the business. To achieve this, one needs to analyze the historical data, understand customer needs and strategize the future requirement.

What can be done through BI?

Banks can use Business Intelligence tools to analyze the historical data for strategizing and planning future growth. BI also helps in understanding the customer in a better way with their transaction patterns, their interests and satisfaction level. Historical data analysis will assist in improved budgeting, marketing, sales promotion, product insights, designing new products, customer retention programs design, customer relationship management (CRM), risk management, and meet regulatory compliance.

Customers, customer details and their transactions-related data are the key asset information to all banks. Banks have shifted their focus into Customer Relationship Management (CRM) to assess the KPIs.

One way to build good relationship with the customer is to provide accurate and precise data on time. This in turn helps in building credibility, trust and also increases business growth.

Customer analytics will provide panoramic view of customer data with more insights to:

• Understand the landscape of the market in terms of customer group, demography, transaction pattern, choice of products and their opinions.
• Identify customer relationships and promote additional products to existing customers
• Know the trends, design new products, offerings.
• Predict customer behavior and plan for customer retention and loyalty programs.
• Use customer sentiment analysis to understand the feedback and opinions on products or offerings.

Major benefits of BI

• Better understanding of customers' needs, transaction patterns and satisfaction levels
• Improve the credibility and trust with customer
• Reduce operational cost
• Achieve regulatory compliance
• Align and improve the sales and marketing programs
• Increase the sales with tactic promotion plans
• Help with quantitative data for quick and optimal decision making
• Strategies as a part of the future plan

Conclusion

The need of the market is to have global Data Model framework to supports data from all markets, channels, including digital, mobile and social media.

Now, it is time to ensure that maximum benefits are derived by analyzing the data through the right BI tool and appropriate reports to design new strategies, quick and precise decision making.

Microsoft Dynamics AX ERP

By Shekmydheen

Microsoft Dynamics AX ERP

Microsoft Dynamics AX is a new generation ERP solution which is easy to learn and use. Users can deliver benchmarked solution faster for multi-site, international business. It helps in streamlining business processes by using better technology to gain a competitive advantage.

Learn the Latest on Dynamics AX ERP

Microsoft Dynamics (MSD) AX has enormous capabilities for business operations as well as financial operations in addition to the industry benchmarked capabilities – Retail, Finance, Manufacturing, HR and Public Sector organizations. MSD provides agility to expand business opportunities and enhance processes to bring innovative drive across the organization.

​Discover Industry Specific Solutions with Dynamics' Intelligence​

Dynamics AX ERP Solution Advancement Features 

For manufacturing, SCM, retail, WMS, TMS and BI, MSD AX has following advanced features:

• Warehousing & Transportation Management is fine-tuned for ease of use
• Mobile POS / modern POS has made customer advancement on Retail Solutions flexible
• Omni channel connect for empowering retailers to engage in a customer-centric world
• Streamlined process flow for Finance and Bank management for improved usage
• R2/R3 version enabled with "Global Instance" to reduce Base System Build and Compilation
• Data Partition and Country Specific functionality fine-tuned and made available across Suctioning
• Business intelligence reporting is shipped with additional cubes to help customer
• Lifecycle services simplifies maintenance and enriches customer experience

New Aspects of MS Dynamics AX

ERP solutions are becoming an important part of many organizations. They enable organizations to serve their customer better and run their business faster. Often they are shipped with a series of role and process based systems; which may create series of issues when we try to sync business software solutions with other software products or upgrade to newer advanced versions. Such issues faced by any organization should be addressed immediately to avoid a breakdown.

Microsoft enables customer and partners with Dynamics AX 2012, which speeds-up business processes and adopts changes in business processes to advance solution to run improved business needs.

Joining all existing IT solutions to a single solution is a better option for improving business processes. With current ERP trends, adjusting and flexibility in adopting this will be more difficult. This may cause retard their own business growth due to the wrong selection of enterprise solutions.

The recent release of Dynamics AX 2012 R3 systems adopted service and task-oriented architecture combined with a strewn computing environment, which brings a high degree of portability and reusability between apps, systems and platforms. With these features, business logic's load will be tremendously reduced which in turn will enable system to produce faster and reliable solution.

In addition, recent trends place a very big role in the market as mobility solutioning - Microsoft Dynamics AX 2012 R3 supports ERP usability on mobile. Microsoft has developed various ERP mobile applications to help customer with the value additions:

• Live business insights on-the-go
• Record and reconcile the time and projects
• Solutions for on-the-move e-procurement, expense reports, budget planning, etc.
• Seamless Data transfer between Remote devices with on-site ERP systems

Benefits of MS Dynamics AX

• Improve productivity: Ease of use allows customer to take decision easily, at the right time.
• Change management & growth: Adapt process easily
• Compete globally: Centralized ERP management gives global visibility
• Simplify compliance: Simplified Organization administration and business initiatives
• Localization pack: Global presence made available for countries with multilingual operation​

Growth of Regional Rural Banks (RRBs) in India

By Madhuri D B

Regional Rural Banks are operating at the bottom rung of banking organizations in India. They have been set-up with the basic objective of providing credit facilities to the rural population, who had very limited access to the formal credit system. The area of operation of RRBs is confined to what Government of India had notified, to include one or many districts in a State.

The RRBs came into existence to facilitate the poor section of people, called as the "Target Group". In 1975, during the regime of former Prime Minister of India, Indira Gandhi, the Narasimham Working Group recommended to set up RRBs, as the major portion of the society – about 70% – in India comprised of rural areas. The RRBs are owned by the Governments at the center and the states and the Sponsor Banks.

Branch Expansion

The Government initiated to open more branches in rural unbanked areas. In the year 2001-02, banks were also allowed to transform their branches which were incurring losses into mobile / satellite offices. This was permitted only if did not affect their performance in the service areas.

Deposit Mobilization

Deposit mobilization is an important banking variable determining the path of growth of a financial institution. It depends upon the saving capacity and saving habit of the people in the area in which the bank is operating. Another factor determining the size of deposits is the rate of interest. If the rate of interest is high, the number of deposit accounts would be more. Deposits mobilized by the RRBs play a key role not only as an important source of funds but also as an instrument for promoting savings and banking habits among the rural people.

Credit Deployment

Credit deployment is another essential component of growth for any banking institution. This is important to those banking institutions which have been established to meet the credit requirements of untapped sector in the country. RRBs grant direct advances in the form of crop loans, agricultural loans, loans for allied activities, loans for rural artisans, village and cottage industries, self-employed persons and consumption loans. RRBs also make indirect advances which are routed through agencies such as farmers' service societies, farmers' clubs, primary agricultural societies, self-help groups, etc.

Growth of RRBs

RRBs proved instrumental in achieving the target of inclusive and sustainable economic growth. The number of RRBs' branches have increased to 16,170 during 2011-12 from 14,468 during 2000-01 i.e. an increase of 1.1 times. The number of districts covered also increased to 620 during 2011-12 from 482 during 2000-01 i.e. an increase of 1.3 times. The linear and compound growth rates of it account for 0.212% and 0.208% which indicates an insignificant growth of bank branches of Regional Rural Banks in India. However, there is a 65% increase in the Credit-Deposit ratio during the same period, which indicates the willingness of Target Group to invest in RRBs.

Conclusion

Although the growth rate of RRBs is very low, the Deposits and Credits are significantly high. Credit-Deposit ratio has increased over the period of time, leading to sufficient mobilization of funds in the regional areas.

Strategic Importance of Reverse Logistics

By Manjunatha N

​In, today's competitive environment, the concept of product return from a customer is a challenge for the entire supply chain community. So Reverse Logistics capability, powered with technology, has drawn attention of the entire logistics community. They are working towards solving the complexity and other concerns in this ecosystem.

The dramatic changes in the retail business, mainly due to the growth of Internet and e-commerce over the past few years, is forcing retailers to handle Reverse Logistics. Consumers are expecting flexibility and promptness while buying a product and are expecting the same promptness and flexibility for product returns.

This is a perfect time for developing a return policy and should be considered as a top priority by all retailers. Faster problem resolution and implementing other methods to provide a smooth flow of products returns from omni-channel and multi-channel for curtailing deception and misappropriation should be the main agenda.

Many retail organizations have put in place best-in-class transportation and logistics systems and processes, but have not considered that Reverse Logistics could be a bottleneck in the future. As it is a crucial area, the retail organizations should strategize and restructure for Reverse Logistics.

The results of "National Retail Federation (NRF) 2014 Return Fraud Survey" from the "2014Consumer Returns in the Retail Industry" report are an eye-opener. It shows that there is a steep increase in percentage of estimated amount of fraudulent returns, by around 20%, from $9.1 billion in 2013 to $10.8 billion in 2014. Retailers and manufacturers should take a note of it.

In the competitive world it is difficult to understand how returns and return fraud can reduce total sales and add to the inventory shrink. A good experience for a customer begins with the right communication of policies, terms, conditions and access to information about the return policies. Eventually it leads to implementing the right solution. Combined with training, it boosts thorough check at the store level where item issue occurs, which leads to lesser returns, lower inventory shrink, increase in net sales, increase in profits and improved customer relationship and gratification.
​

Conclusion:

• Returns vary according to the industry and it poses huge challenges and barriers
• Current industry practices and future market trends reveal upgradation of systems and technologies
• Retailers concentrating on reverse logistics should not view it as just a cost center
• Companies should focus on a comprehensive and strategic Reverse Logistics solution which will add business value and a concrete market advantage
• With a well-defined methodology and KPI's for Reverse Logistics, retailers and manufacturers can derive valuable analytics which will provide a definitive ROI with lower TCO

Remote Deposit Capture: A Customer-Centric Banking Technology

By Sailaja B

Remote Deposit Capture (RDC) is termed the most important technology, the American banking sector has seen. Most of the top banks in the USA have rolled-out RDC for their customers. Fast paced life of people who want to spend less time at bank branches, ever evolving technology and the increased usage of digital banking channels (smartphones in particular) have forced banks to rethink their channel-banking strategies. The next generation customers definitely expect seamless experience across depository channels.

What is RDC?

Remote Deposit Capture is a system that allows a customer to scan a cheque and transmit the cheque’s image to a bank for deposit by using an encrypted Internet connection – all from the comfort of home, office or any other location. As soon as the bank receives the image of the cheque from the customer, it deposits the “cleared” cheque amount to the customer's account.

Why RDC?

Banks are looking-up at RDC because it facilitates the automation of deposits at branch tellers, branch back-office, image-enabled ATMs and merchant and consumer locations of varying volumes and value. For banks, the RDC technology helps in cutting down the paper costs and ATM cheque-drop box pickups as well as avoids physical transportation of the cheques to a Clearing House which reduces processing costs and speeds up the cheque clearing process.

Risks Associated with RDC

The complexity of the risk varies depending on the scope of RDC implementation. Implementing RDC in the institution's back-office operations may be less risky than setting up RDC at remote locations, such as customers' business premises or homes, which are not under the control of the institution. Customers’ account information could be stolen when an unencrypted Internet connection is used to transmit the cheque image. There is also a possibility that the cheque which is already presented may be re-presented, leading to duplication. Hence financial institutions should have risk management solutions to protect its own IT systems as well as those of its third-party service providers and its RDC customers.

RDC in the near Future

The advantages of RDC far outweigh the risks associated with it. Success with digital channels are driving changes in Channel Banking Strategies. The Federal Bank of USA states that mobile cheque deposit ranks fourth among the most commonly used feature, as 51% of mobile banking customers used mobile phone cameras for depositing cheques during 2014. Mobile RDC is truly revolutionizing banking.

RDC in India

The cheque clearing system in India has moved from purely paper based clearing to the exchange of electronic MICR information. Reserve Bank of India has introduced “Cheque Truncation System” which stops the flow of physical cheques using image-based cheque clearing system online. In this process, the MICR (Magnetic Ink Character Recognition) data and cheque images are captured by the collecting bank branch and further transmitted electronically. A RDC pilot run was done at New Delhi recently. RBI may further test RDC at other important Clearing Centers in the country.

In the distant future, paper based cheque payments would be redundant. Financial institutions are gearing up for customer-centric banking technologies.

Legacy Portfolio Analysis

By Vishal Purohit

Consider a typical organizational scenario. The legacy systems are in place for more than half a decade. As business needs grew these applications were added, updated and integrated with new systems. To stay in the race of advancement, businesses are putting efforts to modernize legacy systems. Since legacy applications are deeply embedded in their surrounding technology infrastructure they are very difficult to modernize.

Modernize - Migration or Integration?

How do we decide on the modernization technique to be adopted for a particular legacy application?
There are many modernization techniques, but we will limit our discussion to two techniques:

• Migration: If the application is of simple or medium complexity, having very less interdependency with other applications, then generally Migration of the application is considered as the best approach.
• Integration: If the application falls under very complex category, having a lot of interdependent applications, then generally Integration of the application is considered as the best approach.

How do we evaluate complexity of an application?

Different people have their own perception of complexity as shown below. Let us consider an example of Payroll processing application:

• Application Programmer: The application programmer may judge the application based on the lines of code, and may rate the application as “Medium Complex”
• Database Administrator: The DBA may judge the application based on the number of tables and queries being used in the application, and may rate the same application as “Complex”
• Business Analyst: The business analyst may judge the application based on business rules and may rate the same application as “Simple”

So how do we measure complexity of a program, which is the universally accepted software metric?

Back in the 1970s, Maurice Howard Halstead put in efforts to evaluate complexity by applying Mathematical rules to the programs. A basic fundamental behind this approach is – “Every Statement in the program can be represented in terms of Operators and Operands”. With this information we can calculate the volume of the program.

V = N * log2 n bits

where,
V -> Halstead Volume,
N -> (Total Operands + Total Operators),
n -> (Unique Operands + Unique Operators)

Another dimension for looking at the program is by analyzing the number of decisions taken in the program by counting various branching instructions included within the program. This approach was introduced by Thomas J. McCabe, Sr. and is referred to as McCabe Cyclomatic Complexity.

V(G) = a – s + 2

where,
V(G)-> McCabe Cyclomatic Complexity,
a-> Total number of branches,
s-> Number of unconditional termination of program execution

Oman and Hagemeister combined the information from Halstead Complexity and McCabe’s Cyclomatic Complexity thus giving us the complete coverage of the program – Maintainability Index

MI = 171 – 5.2*log(V) – 0.23*V(G) –16.2* log(LOC)

where,
MI -> Maintainability Index,
V -> Halstead Volume,
V(G)-> McCabe Cyclomatic Complexity,
LOC -> Lines of Code

Let us consider two applications - Accounts and Credit / Debit Cards. Below is the graphical representation of Maintainability Index of the two applications as derived from legacy portfolio analysis:



In the Accounts application, 60% of programs fall under “Medium” complexity thus making this application an ideal candidate for Migration.

In Credit / Debit Cards application, 60% of programs fall under “Very complex” category, thus making this application an ideal candidate for Integration.

We can also perform the following tasks during legacy portfolio analysis.

• Application Summary: Overall summary of the applications will help in understanding the application depth from a high level perspective. 

• Call Tree: Provides a graphical representation of functional flow of the application. Call tree assists in understanding system interaction to modularize the business functions.

• Business Rules Extraction: Extracts important intellectual business logic from packaged or legacy software applications in the form of Business Rules, and stores them for further investigation in a source rule repository. 

Conclusion

​Whenever we talk about Legacy Modernization options, the first step is to analyze the underlying application. Legacy portfolio analysis plays an important role in unearthing the complexity hidden in the legacy applications and guides us in making a correct decision on modernization technique to be adopted.

Fraud Prevention with Mobile Location Confirmation (MLC)

By Saranya Haridass

Bank card holders use their cards at various locations, while traveling from one place to another. During this period, banks have to take measures to prevent fraud which is a difficult task, as the card holder has to be authenticated. To ensure fraud prevention, banks can avoid false positives - by tracking a card holder’s mobile if the card is linked to a mobile phone number.

Fraud systems decline some of the transactions at different locations if they do not follow the pattern of past transactions made by the customer. This leads to the increased false-positive ratio. It then becomes the banks’ responsibility to ensure necessary actions are taken to reduce the false-positive ratio in order to gain the customers’ confidence. e.g. When a person transacts using the card in an urban center and then transacts in another city while traveling, the system detects this as an unusual pattern. Then it declines the transaction or blocks the card.

Secured Card Transactions During Travel

Banks gives customers an option to inform the bank before traveling, so they can update the cardholders’ card details in exceptions (hot-listing cards list). Such cards will not be considered for filtering.

Sometimes, if a customer forgets to inform about the travel, there is a chance that transactions could be declined. As part of the fraud prevention measures, financial institutions spend considerable resources in managing the operation costs and in analysis of declined transactions. Visa has come up with a new service called Mobile Location Confirmation (MLC) to solve this problem.

Benefits of MLC

• Secure payment experience for travelers 
• Preventing declining of valid transaction as suspicious or fraud 
• Preventing the blocking of cards by fraud detection system 
• Takes less than a millisecond to identify and match the location 
• Can be activated / deactivated at any time by the customer 
• Attaining customer satisfaction by safe payment option

How it works

• Install the issuing banks mobile app 
• Agreement with the network to access the geo-location 
• Activate the mobile internet or Wi-Fi during travel 
• On swiping the card anywhere during travel, Visa will access the geo-location of mobile and then compare it with the swipe location 

o   If the location matches, it sends the request to issuing bank authorization

o   If the location doesn’t match, the transaction could be declined

Conclusion

We need a solution, which filters transactions based on the rules. The system should also be integrated with the mobile network thereby identifying the fraud with the help of geo-location.