Author: Vivekananda J

New IBM configurations designed for flexibility, sustainability and security within the data center

We are excited to collaborate with IBM as the company today unveils its new IBM z16 and LinuxONE Rockhopper 4 single frame and rack mount models available globally on May 17, 2023. Powered by the IBM Telum processor, these new configurations are designed for highly efficient data centers with sustainability in mind. Clients can make more effective use of their data center space while remaining resilient in the midst of ongoing global uncertainty.

Fraud monitoring and prevention is an integral part of banking, needed to protect its customers and business alike. Being compliant to regulatory and market demands is mandatory for banks to function worldwide. With the growing incidence of banking fraud and its societal impact banks have a pivotal role in maintaining the trust of its customers. Globally fraudulent transactions are finding new paths every other day, and banks have to be a step ahead to monitor and prevent them.

Clari5 Enterprise Fraud Risk Management (EFM) solution needs to be responsive in real-time for decisioning. The new IBM z16 and LinuxONE Rockhopper 4 configurations offer scalability on demand with a relatively small footprint. The sytems will support Clari5 to help keep seamless operations running at the bank. Clari5 EFM has to monitor transactions for fraud, and it has to be challenged or stopped in real time. As the volume of business grows or occasional spikes in transaction volumes, the IBM systems provide seven 9s (99.99999%) availability and scalability on demand for Clari5 to continue to monitor and prevent frauds without business disruption.

Clari5’s AI/ML models leverage IBM’s Telum processor to process huge volumes of data to reduce false positives and help in customer onboarding. ML models grow better with growing data elements, and the specialized Telum processor will provide for the much-needed processing power for decisioning in real-time.

Addressing today’s changing IT landscape 

Every day, clients face challenges in delivering integrated digital services. According to IBM’s recent IBM Transformation Index report, security, managing complex environments, and regulatory compliance were cited as challenges to integrating workloads in a hybrid cloud. In today’s evolving IT landscape, it can be difficult for clients to meet business objectives while adhering to environmental regulations and increasing costs.

The new rack mount option is designed with the same reliability standards as all IBM z16 and LinuxONE systems and is for client-owned data center racks and power distribution units. This footprint is architected to let companies co-locate the latest x16 and LinuxONE Rockhopper 4 technology with distributed infrastructure and opens opportunities to include storage, SAN, and switches in one frame, designed to optimize both data center planning and latency for specific computing projects. Installing these systems in the data center can help create a new class of use cases, including data center design, optimized edge computing, and data sovereignty for regulated industries.

Securing data on a highly available system

According to IBM’s Cost of a Data Breach report, conducted independently by Ponemon Institute, and sponsored, analyzed and published by IBM Security, surveyed organizations with a hybrid cloud model had lower average data breach costs, about $3.8 million, compared to public or private cloud models. IBM z16 and LinuxONE systems help support a secured, available hybrid IT environment critical to customer outcomes for essential industries like healthcare, financial services, government, and insurance.

More sophisticated cyber threats require new standards of protection. IBM z16 and LinuxONE  provide high levels of resiliency offering support for mission-critical workloads. These high availability levels help banks maintain access to data from their customers’ bank accounts, transactions and other personal information whenever they need it. IBM z16 and LinuxONE Rockhopper 4 single frame and rack mount systems offer a broad range of security capabilities, including confidential computing, centralized key management, and quantum-safe cryptography.

Optimizing flexibility and sustainability 

IBM z16 and LinuxONE Rockhopper 4 single frame models are built to help maximize flexibility and sustainability in data centers. With a new partition-level power monitoring capability and additional environmental metrics, these single frame systems are dedicated to helping clients reach their sustainability goals, reducing data center space and energy consumption. These key advantages distinguish the platforms for sustainability in the data center, especially when consolidating workloads from x86 servers.

As a part of the IBM Ecosystem, Clari5 is helping companies unlock the value of their infrastructure investments by implementing the tools and technologies designed to help them succeed in a hybrid cloud world. We are excited to be working closely with the IBM Ecosystem to bring new innovations to our clients.

Additional information:

• Read IBM’s press release
• Learn more about Clari5
• Learn more about IBM z16 and LinuxONE 4

(First in the two-part series on improving Customer Lifecycle Management in banks)

Image courtesy: @snowing on Freepik

‘A 1000-mile journey begins with a single step.’
– Lao Tzsu

In a fiercely competitive environment, banks have been striving to generate more revenues while trying to increase customer stickiness and curtail customer attrition. The scenario has compelled the need for a holistic approach for creating strong customer-centricity – the key aim of great Customer Lifecycle Management (CLM).

Be it transaction banking or wholesale banking or cash management services, customers continue to generate significant fee-based revenue for banks. So a robust CLM is vital for serving corporate, institutional, or individual customers. And given the intense competition to win customer loyalty, especially with increasing mergers and acquisitions, banks are now investing much more in transforming their CLM processes.

Let’s take a look at step 1 in the CLM journey – Onboarding

Regulatory supervisors around the world are increasingly recognizing the importance of ensuring that banks have adequate controls and procedures in place, so that they know the customers with whom they are dealing. Adequate due diligence on new and existing customers is a key part of these controls. Without this, banks become vulnerable to reputational, operational, legal and concentration risks, which can have significant financial impact.

On the other hand, customers expect convenience, speed + quality of service delivery and personalized service. An efficient Onboarding process reinforces the bank’s customer-centricity while taking care of critical operational risk mitigation procedures such as KYC, Due Diligence, Beneficial Ownership Verification, etc.

KYC is a critical component in the Onboarding process to help establish the customer’s identity prior to Onboarding and Customer Due Diligence (CDD) is a regulatory norm as part of the KYC process. A bank is required to ascertain the identity of the customer and confirm that funds in the customer account come from legitimate sources.

The first part in a KYC program is a bank’s Customer Identification Program (CIP) which requires collecting and documenting a customer’s name, date of birth, address and identification presented.

The second is Customer Due Diligence (CDD) which requires obtaining information to verify the customer’s identity and assess the risk. If the CDD inquiry leads to a high-risk determination, the bank has to conduct an Enhanced Due Diligence (EDD).

In the US, FinCEN’s CDD rule clarifies and strengthens CDD requirements and requires banks to verify the identity of beneficial owners of legal entity customers.

So, while focusing on delivering a great Onboarding experience, banks must simultaneously ensure and enforce CDD.

CDD helps gauging money laundering risks with a better identification mechanism and mitigates customer-related risks. CRC or Customer Risk Categorization is a risk scoring framework that uses parameters like demographic profiles, geographic, product subscriptions and watch list matches to provide a risk score.

These risk scores are assigned to customers’ profiles during Onboarding and updated along with their journey. Even something as mundane as critical documents expiry updates and notifications, if not handled accurately and on time, can cost banks heavily for non-compliance. In fact, the risk exposure increases when critical information is not updated.

Technology is a key enabler for effective client lifecycle management. There are advanced solutions now available that help banks streamline the complete customer lifecycle assessment and re-assessment of customer risk as part of KYC applicant Onboarding and ongoing CDD processes.

These solutions help streamline money laundering risk assessment, improve understanding of the customer in order to identify, manage and mitigate customer related risks better.

So, what must a bank look for in a good CDD-enabling technology solution?

• Integration with the Onboarding system – The solution should be able to seamlessly integrate with any form of existing Onboarding system to capture customer information.
• A comprehensive risk scoring mechanism for new customers.
• Interactive and dynamic forms & configurable questionnaires based on the customer’s risk score.
• The solution should be able to capture and maintain multiple Beneficial Owner Information for New Accounts.
• Enabled to check against various List / Sanction Screening against Customer and Beneficial Owner information, which supports –
  • External private company data providers
  • Comprehensive List Management that supports various list providers and custom internal lists
  • Intuitive user interface for List Rule Configuration
  • Advanced Identity Resolution Analytics Engine that supports fuzzy and exact match algorithm for fields
•  An integrated case management system for case creation and reporting.

To determine the relevant risks, 10 key customer information points that banks must collect are:

1. Nature of business
2. Purpose of account
3. Expected pattern of activity (volume, nature of transactions and amounts)
4. Origination and destination of funds
5. Basic business documentation
6. Business customer’s customers (e.g., international customers or banks)
7. Nominal and beneficial owners of the account
8. Business reputation and references
9. Other business and personal business interests
10. Location of business in relation to bank

This is not exhaustive, and banks may need additional information depending on specific facts, but its good enough to start with.

These insights, together with a strong CDD-enabling real-time, cross-channel technology solution can help banks streamline the Onboarding experience as a first step towards a great customer lifecycle journey.

To know how to manage the journey ahead and improve Customer Lifecycle Management in banks, stay tuned for the upcoming part 2 on ‘Enriching the Journey Ahead with Exceptional Customer Lifecycle Management’.

Enriching the Journey Ahead with Exceptional Customer Lifecycle Management