Sainsbury: What are the most critical technology issues facing wholesale banking for the next 12 months?

Warathe: That’s an interesting question. As we all know, the banking industry is witnessing a period of tremendous change – probably more than it has ever faced in its entire history. This change demands not only new business propositions but also careful repositioning of traditional banking products and services.

Adapting to new regulatory requirements and competing with speed and agility while maintaining stability of the underlying infrastructure are just some of the critical technology issues facing the bank right now.

We are also seeing faster adoption of technology in emerging markets. In the transaction banking space, emerging markets are making massive upgrades and improvements in underlying clearing and settlement infrastructure. In order to meet our clients’ demands in the dynamic environment in which we operate, our infrastructure must also have in-built flexibility. These are just some of the changes we need to adopt to remain competitive and, therefore, relevant to our clients, regulators and investors.

Sainsbury: Explain the cash transformation project that Standard Chartered has kicked off.

Warathe: At Standard Chartered’s Transaction Banking business, we have two major revenue engines – Trade Finance and Cash Management. We recently completed the infrastructure transformation of our Trade Finance business with the roll out of Trade Port which has decreased operational costs, created greater scale and added a complete suite of product capabilities for our trade finance business.

We have now embarked on the infrastructure and capability transformation of the second engine of Transaction Banking, Cash Management. This is done through an investment in our payments and collections platforms.

Our payment systems provide over 100 payment clearing connections for the clearing of 46 currencies in our cash management markets. The new platform enables faster payments within our footprint – a unique and much sought after value proposition for our clients when compared with the levels of service currently on offer by our competitors.

In addition to faster transactions, we will deliver to our clients a more comprehensive range of end-to-end solutions for liquidity management, increased transparency around their payments and collections information, advanced receivables management capabilities as well as new working capital solutions that can help our clients become more efficient.

As our clients benefit from the implementation of our new capabilities, the bank is able to realise efficiencies from greater automation which, in turn, results in the reduction of cost per transaction. With technology enabling more automation, I believe we would start seeing cash shops moving away from pure processing to focusing on value-added services for their clients.

Our new platforms represent a more efficient, scalable and flexible infrastructure in a very competitive and ever-evolving business landscape where you will see emerging e-commerce or mobile wallets including the likes of Paypal, Google and Amazon more aggressively competing in the financial services ecosystem.

Sainsbury: What other opportunities do you see for application development to impact on the wholesale banking side of Standard Chartered’s business?

Warathe: The future lies in the keywords “speed of execution”. Of course, along with speed, security and accuracy are equally important. And this again goes back to the role of technology especially in the context of the cash management business. One can never over-emphasise the importance of technology in providing a competitive edge.

In relation to your question, we are focusing on the integration of business processes on an end-to-end basis through the further alignment of systems to provide better straight through processing.

Sainsbury: What opportunities do you see for further back-end systems investment?

Warathe: We’re one of the few banks with a standard core banking infrastructure in over 40 countries. Having come a long way in the standardisation of our platforms in wholesale banking, we are able to bring consistent and comprehensive product offerings to all our geographies.

Apart from optimising cost per transaction, we are also ensuring our clients receive the best user experience as we implement an infrastructure scalable for growth. Our next phase of investments will be focused on data analytics to generate more insightful business intelligence.

In cash management and trade finance, we continue to invest to provide faster domestic and cross-border payments execution to support trade flows in Asia, Africa and the Middle East. Our technology investment plans are focused on the automation and integration of our Trade, Payments and FX infrastructure for straight through processing.

Sainsbury: With retail banking, customer-facing applications are a common focus area of investment. Do you see opportunity for customer engagement solutions in wholesale banking as well?

Warathe: Absolutely, there is a huge opportunity here. The increased ‘consumerisation’ of financial services is driving our clients’ expectations for wholesale banking channels. Although this impacts the transactional realm more than traditional consumer applications, our channels team plays an integral part in shaping our client’s experience with, and impressions of, the bank. Our client needs are constantly evolving as technology drives efficiencies in their business and therefore changes the way they work – so there are definitely opportunities to leverage our capabilities to position our channels as business enablers and increase client engagement. 

Sainsbury: How do you see regulation impacting on wholesale banking technology investment over the next year?

Warathe: That’s a good question and extremely relevant in today’s context. As I mentioned earlier, the regulatory environments in which we operate are challenging. Regulators are increasingly scrutinising aspects such as business continuity and disaster recovery capabilities. They are also looking into the robustness of the overall infrastructure both in terms of existing capabilities as well as our preparedness in the event of an emergency or crisis.

So how does this impact us in an increasingly virtual world? I think the answer lies in people, processes and systems. While technology is a key driver of business competitiveness, equally important are investments in ensuring we have the right people on board and processes that would enable us to best leverage our technology systems.

Sainsbury: What are the most effective ways to manage big data challenges from a wholesale banking perspective?

Warathe: While a more digitised operating environment has its own obvious advantages, it also brings challenges. The management of data is one such issue. The main challenges include effective cost management for the data, maintaining its integrity, ensuring timely retrieval with safeguards attached while ensuring client confidentiality.

At the enterprise architecture level, there are three most important mantras that guide us – firstly, keeping master data (reference data) at enterprise level, secondly, minimising application interfaces, and thirdly, avoiding replication of data as it raises consistency and integrity challenges.

To manage data effectively we are aligning our approach to hardware, middleware (mainly database and application servers) and application selection. The solution is quite complex and requires interdisciplinary considerations and knowledge of the business problem definition, enterprise architecture, data centre management as well as hardware and middleware capabilities.

Sainsbury: How do you encourage a culture of innovation within your team?

Warathe: The most important aspect here is to give a “free hand”.  Before I discuss innovation, let me mention that innovation is like the icing on top of a cake. First, we must have the fundamentals right like secure and reliable transaction processing systems. We prioritise these basics before adding on new, innovative services.

We drive innovation to differentiate our services and to ensure the bank is building a sustainable advantage. Innovation tends to be organic at Standard Chartered. We encourage our people to have a creative approach to solving business issues for our clients and the ideation is usually spawned on the ground instead of centrally.

Centrally, we provide seed funding to bring those ideas to market. We believe that centralised innovation doesn’t really work and tends to be a bit forced. We let the best ideas generate on the ground and nurture those through to a working product or service. Having said that, for every idea that blossoms, the ones which do not work are retired quickly. Discipline and balance are key to a good innovation culture. And once an idea does comes to life, we quickly assess its value elsewhere in our footprint and deploy it fast. This organic approach works very well here at Standard Chartered.

One thing we must never forget is that we are a bank, not a retailer or a technology company. So we do everything to earn and retain our customers’ trust so security and reliability are paramount in all that we offer.

Sainsbury: What are some of the most inspiring applications of technology that you have seen?

Warathe: In my opinion, solutions centered around inventory management and product marketing have been fantastic examples of innovation. I am referring to the ubiquitous barcode and the evolution of mobile technology.

For example, when you walk into any big retail store and when you pick up items of clothing, you will find security tags physically attached to these items of clothing. These tags play a big role in inventory management.

When you buy an item of clothing and check out of the store, a barcode scanner reads this item and records it into the system. This system is also linked to the inventory management database wherein this item gets ‘checked’ out.

Based on the items checked out, the store knows how many more items to re-stock. This is just one example. The barcode also helps in many other ways including the tracking of price movements, recording the number of items received against a purchase order as well as managing payments.

The barcode can help in product marketing when it converges with mobile technology. Some retailers are putting more purchasing power into the hands of their shoppers by integrating the barcode with a mobile phone’s location-based services, web access and mobile payments capability. This is making it possible for shoppers to locate products within a department store, get more information about the item, make price comparisons and pay for items from the convenience of their mobile phone.

The reason I find these solutions particularly inspiring is that they are simple solutions which have a very powerful impact. In fact, they are revolutionalising the way retailers operate!

Sainsbury: Every leader, particularly at your level, has a legacy they wish to be remembered for. What is yours?

Warathe: Standard Chartered is one of the world’s leading trade finance banks. Leading a multi-disciplinary and talented technology team in such a bank has been an enormous privilege and a career highlight for me. My team and I look forward to helping our bank deepen our relationship with our clients by continuing to add value and grow their business as a result of the innovative services we deliver to them on a day-to-day basis.