Bangalore: Banks around the globe are reprioritizing their technology investments considering the ongoing European financial crisis and overall economic downturn which has brought a sense of urgency to optimize operations. ?Large banks that operate globally with employees, customers and vendors spread across the globe can optimize operations by improving their efficiency across multiple markets on a global scale and incorporating flexibility to bring in innovation and offer valuable products to local customers reports Olivia LaBerre in banktech.com

Judd Holroyde, SVP and head of global product management and delivery at San Francisco-based Wells Fargo, says that to become a successful global bank, organizations need to practically approach, identify and implement technology while maintaining consistent customer experience. In addition Holroyde says that the key point to be successful depends on evolving the overall operating model. "I don't think any banks are completely there today," he says. "But do I think they are heading there quickly? Yes."

1. Strive for Standardization with Flexibility

According to Likhit Wagle, GBS banking leader at Armonk, N.Y.-based, it is not feasible for financial institutions to support very complicated, complex operations and platforms in today?s global environment. Explaining further he says "That sort of complexity makes it very difficult to manage the business and bring new products to the market, and it's more expensive" hence a more streamlined approach across the globe would be more beneficial to banks.

Fiaz Sindu, an executive with New York-based Accenture's core banking services group says that a bank?s operating model can be simplified through the standardization of technology, products and processes which is nothing but the phenomena of industrialization. Key to industrialization is "ensuring that the manufacturing, fulfillment and servicing that go with a bank's products are centralized across multiple segments," he explains. "Whether it's retail banking or wholesale banking, there needs to be a common engine underneath that supports those segments."

Jose Olalla, technology and operations director at BBVA says "This strategy (standardization) has yielded good results, and we are now taking further steps to integrate, taking full advantage of our global scale."

Olalla says BBVA approach to standardization is through automation which has proved to be beneficial to the organization "Our processes are automated and we have a paperless global workflow," he reports. "We have real-time posting and validation processes and have implemented a compliance/fraud-prevention proactive and reactive system."

Experts say that a bank can achieve global success through standardization but this also depends on maintaining enough flexibility.

2. Traditional IT Outsourcing Not Recommended

Bill Huber, partner at Stamford, Conn.-based Information Services Group (ISG), an independent sourcing data and advisory firm says that outsourcing is often taken as a clich?d topic but it still plays a significant role in the global financial scene. "We continue to see companies looking for ways to restructure for long-term competitiveness, especially in finding ways to reduce their cost structure while retaining core capabilities," he says.

According to ISGs ?2Q11 Global TPI Index? which was released at the beginning of 2012, the year 2011 was the busiest year ever in terms of outsourcing contracts wherein commercial outsourcing contracts around the world valued at $25 million or more. The index also reveals that the financial services sector signed more large outsourcing deals in 2011 than ever before. "Talented leadership that can lead and manage transformational outsourcing arrangements remains a relatively rare commodity" says Huber.

Considering the trend of IT outsourcing Holroyde says that Wells Fargo has a "build" rather than "buy" attitude. "We really try to build talent there instead of relying on other talent. We get high-caliber IT folks and invest in them," he says. "Otherwise, IT operations can become too separate from business operations."

3. Maintain Good Customer Experience

An established global bank should put in efforts and always attempt to maintain consistency in the client interface so that customers can unconditionally rely on the brand and have the same quality and pleasant experience everywhere, regardless of what is happening in IT and operations on the back end, points out Accenture?s Sindhu. "There's a client-facing distribution function that services a specific segment of the market," he says of the ideal global bank operation. "There's a wholesale banking line of business, there's a retail banking line of business, and it's fully integrated in terms of all the products that they're trying to sell to their client base because it's built around the clients and not around the products."