ARTICLE CASE STUDY

Bancassurance in
Middle East &
Africa
Powering Sidra
Capital
Agile
FINANCIAL TIMES
September
2013
SOLUTION OVERVIEW
Agilis Investment
Management
Wealth Management
in the Middle East
AGILIS
INSURANCE SUITE
General Insurance
Life Insurance
Pension & Annuities
Takaful
Broking
BancAssurance
Micro Insurance
AGILIS
BANKING SUITE
Agilis Treasury Management
Agilis BancAssurance
Agilis Lending Suite
Loan Crgnaton
Loan Managomont
Loan Cooton
^gs Crodt Montorng
Agilis Bank Agency Management
Agilis Branchless Banking
Agilis BPM Suite (DMS & Workflow)
Agilis BI: 1-Key Agile
AGILIS INVESTMENT
MANAGEMENT SUITE
Wealth Management
Fund Management
^ssot Managomont
1ranslor ^gony
Financial Planning
BancAssurance
AGILIS UNIVERSAL
MICROFINANCE
Customor / Mombor Croup Managomont
Shares & Savings Management
Covornmont onolt Lsbursomont Managomont
Donor Management
Loan Crgnaton, Cooton Managomont
lod Cporatons and Mobo anlng
Treasury Management
Crodt katng and ksl Managomont
Financial Accounting
Jambo!
As we write this issue focused on wealth
management, we hear of the attack on the
Westgate mall in Nairobi, a place we know so
well and visit for that rich cuppa Kenyan
Highlands tea or Mount Kenya coffee.
We want to dedicate this edition to this true
City of Wealth - Nairobi. Yes, Nairobi, that has
trumped the vile forces with its wealth of courage, solidarity and
resilience. Always the melting pot of cultures and ethnicities, it emerges
even stronger as the world pays tribute to its cornucopia of human
values.
Coming to the more empirical side of wealth, we bring you the latest
investment management trends & regulatory changes in the Middle
East, the current global bastion of unitized opulence. A dynamic place
that nipped any hint of recession in the bud and is exploding with a
wealth of ideas, new world order strategies with the right measure of
new regulatory norms.
So Karibu to the new chapter in the management of wealth in myriad
forms - some that feed the belly and some others, that feed the soul.
Asante Sana. Be Agile!
Shefali Khera
Chief Marketing Officer & Business Head
We would love to hear from you on info@agile-ft.com
PS:
Key to the rich Kiswahili lexicon:
Jambo = Hello
Karibu = Welcome
Asante Sana = Thank you very much
CONTENTS
Editors Note
NEWS 4
Global Financial Markets
Update
COVER STORY 6
Wealth Management
in the Middle East
CASE STUDY 10
Powering Sidra Capital
ARTICLE 13
Bancassurance in
Middle East & Africa
SOLUTION OVERVIEW 16
Agilis Investment
Management
September 2013
across the region without registering a separate entity and
getting approvals from another regulator. The East African
Securities Exchanges Association (Easea), which brings
together the regions stock exchanges and Kenyas Central
Depository and Settlements Corporation (CDSC), has
already adopted a back office automated system that is in use
in Kenya, as the standard for all market intermediaries in the
region. After its full adoption, it is expected to facilitate
access to all securities in the region and Internet trading.
Chinese Economic Data Points to End of
Slowdown
Recent economic data from China suggest that the economy
could be stabilizing. Factory output in July rose 9.7 percent
year-on-year, ahead of expectations and up from the
previous months figure of 8.9 percent. Consumer prices
held steady in July, rising 2.7 percent from a year earlier,
matching the rate in June. The government has set a target
of 7.5 percent for 2013, the lowest rate of expansion in
more than two decades. Chinese exports and imports grew
more than expected in July, posing a sharp recovery from the
previous month. Chinese exports rose 5.1 percent compared
with a year earlier while imports gained 10.9 percent.
Absa, Barclays Africa Deal Approved
Absa Groups acquisition of Barclays African business has
been approved by regulators. The deal will come into effect
on July 31 and will see Barclays holding 62.3% of the newly
renamed Barclays Africa through the issue of 129.5-million
ordinary shares by Absa, with a value of R18.3 bn (USD
Western Union Launches Mobile Money Service
in Nigeria
Western Union has partnered with an African payment
processing specialist, eTranzact, to launch a mobile money
service in Nigeria, with the objective of boosting financial
inclusion and provide a more convenient means of money
transfer for Nigerians, and the entire Africa. Nigeria mobile
phone penetration rate stands at 70.64 percent, as of June
2013, according to figures provided by Informas World
Cellular Information Service. In contrast, just 21 percent of
the countrys population has a bank account, according to
the World Bank. The financial service company hopes to
bridge this divide by providing users with a mobile platform
to pay bills, purchase merchandizes online, top up mobile
credit and make third party transfers.
East African Stock Markets Push for Multi-
currency IPOs
Securities and stock market intermediaries across the five-
member East African Community are now planning to
introduce multi-currency denominated initial public
offerings (IPO) and single licences for stockbrokers and
investment banks as reforms to integrate the regions capital
markets begin. This will ensure investor protection against
high exchange rates. The Nairobi Securities Exchange
(NSE), Uganda Securities Exchange (USE), Dar es Salaam
Stock Exchange (DSE), Rwanda Stock Exchange (RSE) and
Kenyas CDSC have also put forth a proposal for a single
stockbroker licence. The licence will allow market
intermediaries from any country to source for business
4
NEWS
Global
Financial
Markets
Update
A Round-up of Recent Happenings
1.86 bn). Absa will be renamed as Barclays Africa starting
August 2 in the rest of Africa except in South Africa where
it will remain Absa. The deal, first announced in 2012, was
delayed by the complexities of regulatory approval in
Botswana, Ghana, Kenya, Mauritius, the Seychelles, South
Africa, Tanzania, Uganda and Zambia.
Abraaj Group Sells Investment in Ghanas HFC
Bank
Dubai-based Abraaj Group has sold its stake in Ghanas
HFC Bank Limited to Republic Bank Limited (RepBank), an
independent Caribbean bank. The Abraaj Group, through
one of its funds, acquired its initial stake in HFC in 2010 and
made an additional investment in 2012. During Abraajs
investment, HFC has become one of the leading domestic
banks in Ghana and remained strongly capitalised.
According to a statement by the Abraaj Group, the bank
currently has 27 branches across Ghana, and is working to
open additional branches.
Dubai Group Exits Bank Islam
Dubai Group has sold its 30.5 percent stake in Malaysias
Bank Islam to BIMB Holdings Bhd for USD 550 million.
BIMB Holdings, which currently owns 49 percent of Bank
Islam will pay USD 884 million towards full control of
Malaysias oldest and largest standalone Islamic bank, in a
deal that will help it expand in a rapidly growing sector.
Dubai Group had acquired a 40 percent stake in Bank Islam
for USD 224 million in October 2006 but the stake was
diluted to 30.5 percent in 2009 after a capital increase that
the group did not participate in.
Kenyas CBA Launches Suites for Premium
Banking Market
Commercial Bank of Africa (CBA) has launched an
exclusive premier banking suites that targets wealthy citizens.
The move, which is a bid to gain grounds in the Kenyan
premium banking market, targets salaried individuals with a
net income of Sh300,000 (USD 3,400) and those running
current accounts with a minimum balance of Sh1 million
(USD 11,000). It will provide customers will longer banking
hours as well as multi-currency credit cards. Customers will
also enjoy discounts at selected retail outlets, while having
access to executive airport lounges around the world.
Mutual & Federal Buys Agricolas Insurance
Book
Mutual & Federal, the short-term insurance firm owned by
Old Mutual Group has acquired the insurance book of
specialised crop underwriting manager Agricola for an
undisclosed amount.The deal will see Mutual & Federal rank
in the top three when it comes to providing insurance to
farmers in South Africa. Santam and Absa are the other two
top insurers in crop farming.
Credit Squeeze in Asia Worst Since Financial
Crisis
Bank lending conditions in emerging Asian nations have
tightened the most since the global financial crisis, according
to the latest survey from the Institute of International
Finance (IIF). The report shows the region`s headline index
falling to a reading of 45.7, below the key 50-level that
divides easing and tightening territory and its lowest level
since the beginning of the survey in 2009. Asia also showed
the tightest lending conditions of global emerging regions.
The report cites three principal factors for Asia`s strained
credit conditions: deteriorating domestic funding conditions,
high non-performing loans as well as declining loan demand.
The survey questioned 133 banks across Latin America,
Europe, Asia and the Middle East- Africa region and Asia`s
headline figure of 45.7 was the lowest. Latin America was
second-worst at 47.6 while Africa and the Middle East had
the best result at 52.9.
Bermuda Signs AIFMD Cooperation Agreement
with European Member States
The Bermuda Monetary Authority has signed the co-
operation agreement with European Union (EU) Member
States in relation to the Alternative Investment Funds
Managers Directive (AIFMD). This means that new and
existing Bermuda-based funds and fund managers can
continue to seamlessly conduct business with the European
market.
Dubai Launches New Centre for Islamic
Banking
Sheikh Hamdan Bin Mohammed bin Rashid Al Maktoum,
Crown Prince of Dubai and chairman of Dubai Executive
Council, has launched the Dubai Centre for Islamic Banking
and Finance as a first step to establishing Dubai as the
worlds capital for Islamic economy, in collaboration with
the Hamdan Bin Mohammed e-University. The new centre
will provide support to the initiative through three academic
programmes on human resources development, scientific
research and community service. The centre will also play a
vital role in widening access to Islamic banking and finance
education to the wider community.
5
NEWS
6
Global Cues Support Growth from Developing Markets
The World Wealth Report 2013 pegs aggregate global investable wealth at USD
46.2 trillion in 2012, an increase of 10 percent over 2011. This suggests a revival
trend, after the tarnishing effects of the financial crisis. In the next few years,
wealth creation is expected to be led by fast growing developing nations on
account of high savings and GDP growth. Asia Pacific (excluding Japan) is
expected to surpass North America as the largest wealth market.
Globally, common themes emerge for companies providing wealth management
that include among others an ever increasing regulatory burden; a complex
operating environment; varied customer expectations, especially with regards to
wealth preservation vs. growth; and changing demographics across the world.
Effectively, these are setting the stage for greater risk management and more
tailored solutions. The pressure on profitability is inevitable even as cost control
is a priority for firms.
The Middle-East Wealth Management Landscape
The Middle East has often been regarded as a region for long term growth as
prosperity continues to rise on the back of high oil prices. Close to two percent
The Middle East is becoming
an increasingly competitive
market for wealth management
as both regional and
international banks are
expanding their suite of
offerings, while tackling unique
and evolving regulatory
challenges. The creation of a
distinctive value proposition for
customers will be an imperative
in the competitive market in
future, and investing in the right
technology and infrastructure
will play a very strong role in
creating that differentiation.
Wealth
Management in
the Middle East
7
COVER STORY
of the global HNWI investable wealth is held in the Middle East and this is
expected to increase 6.8 percent annually up to 2015. The High Net Worth
Income (HNWI) population grew by 8.1 percent in the Middle East region
over the previous year.
Though regarded as one region, the Middle East is a diverse market with Saudi
Arabia accounting for about 40 percent of the total wealth pool, followed by
the UAE, Kuwait and Qatar with close to 22, 15 and 12 percent share of
HNWI wealth, respectively.
Offshore Over Onshore
Statistics suggest that currently about two-thirds of the assets in the Middle
East are still booked offshore. This is among the highest in terms of
proportion among developing regions globally, suggesting relatively low
sophistication in terms of onshore investment options. Sovereign Wealth
Funds (SWFs) account for 88 percent of existing investable assets and 74
percent of new assets in the Middle East.
The appetite for onshore investments is improving, as markets open up and
newer instruments are getting added. Onshore investments provide a great
opportunity for local and international banks alike. A good example is that of
Shariah funds, which have the potential for strong performance due to a
shortage of mainstream investment products in the region.
Evolving Regulatory Environment
The post-crisis world has seen a large number of new regulations coupled with
strengthening of existing ones, such as the Markets in Financial Instruments
Derivative II and Undertakings for Collective Instruments in Transferable
Securities IV and V. In addition to changes from standard international
financial regulation, most financial institutions in the Middle East have to deal
with sanction regimes of individual countries, especially relating to anti money
laundering (AML/CFT).
Furthermore, taxation and corruption initiatives such as the US Foreign
Account Tax Control Act (FATCA), the US Foreign Corrupt Practices Act and
the UK Bribery Act transcend boundaries and have to be complied with in
offshore transactions. Such legislations have inevitably become a part of firms
risk management and client on-boarding processes.
Customer Expectations
Cultural dynamics play an important role in private banking in the region, as
entrepreneurs and family business owners dominate non-oil GDP in the
Middle East. The needs of this class of investors are more complex, i.e.
revolving around family and business ownerships, as opposed to
straightforward cash or credit based products. Moreover, as the younger
generation takes over family businesses, their demands centre around
digitalization, greater transparency and a larger bouquet of offerings. The
younger generation is also more digital-savvy and has a higher tendency to
resort to social networking and other digital media for investment comparisons
and related advice.
A survey published as a part of the World Wealth Report reveals that a larger
percentage of HNWIs in the Middle East, as compared to the global average,
would pay more to do business with a firm with a solid reputation.
Potential
opportunities in
the Middle East
region stem from
an evolving
landscape and
changing customer
requirements.
Opening up of
markets in a
number of
economies is
allowing more
instruments for
investment as well
as bringing in
overseas
investments.
The Road Ahead
Potential opportunities in the Middle East region stem from
an evolving landscape and changing customer requirements.
Opening up of markets in a number of economies is
allowing more instruments for investment as well as
bringing in overseas investments. For example in Bahrain,
recent guidelines have made it possible to offer overseas
domiciled funds to investors in Bahrain, subject to necessary
approvals. In Saudi Arabia, a gradual opening up of the
market is expected soon, which will likely bring in foreign
funds beyond equity swaps and ETFs.
As customers become more demanding and business is less
sticky, full service providers have a clear advantage in future
by targeting a higher wallet share from each individual
customer. Both local/regional and international firms are
starting to build capabilities towards providing the entire
range of wealth management services to clients through a
single window, whether as producers or as distributors.
Moreover, it is increasingly being recognized that a single
window may not mean a single relationship manager, but
rather a team of professionals who can take care of all the
needs of the customer.
Automation by way of deploying a comprehensive
8
COVER STORY
Flavour of Recent Changes and Evolving Opportunities Within Some Countries in the Region
9
COVER STORY
investment management software that would encompass CRM, front, mid and
back office capabilities including financial planning, portfolio management and
performance measurement would allow wealth managers to achieve greater
consistency and eliminate inefficiencies, giving them more time to focus on
their clients.
Business dynamics in the Middle East are driving investments in people,
processes and technology. The McKinsey Report on Private Banking shows
large productivity differences between relationship managers in the GCC
region. According to the study, the top performing relationship managers in
the GCC region are on an average four times more productive than those in
the bottom quartile of performance, based on parameters of net new money
and revenue per manager.
Consistent productivity improvements mandate a highly integrated effort
including a healthy infusion of resources, infrastructure and technology. A
large number of local/regional firms in the Middle East have been undertaking
middle and back-office transformations that will enable significant cost savings
in future.
Larger firms are also investing in technology optimization in the customer
interface that will allow better communication with the client. Digitalization
can improve communication and empower a customer with more information
and decision making capabilities. It also meets the demand for greater
transparency. Cost per transaction can reduce significantly, with the relation
manager intervening only for advice and trouble-shooting. However
automation will not eliminate the need for talent. Hiring experienced wealth
managers and providing effective training to all levels of staff will still be
mandatory to success.
Overall, the dynamic business drivers mandate building an increasingly agile
organization that can be responsive to business demands and client
requirements.
As the younger
generation takes
over family
businesses, their
demands centre
around
digitalization,
greater
transparency and a
larger bouquet of
offerings; they are
also more digital-
savvy and have a
higher tendency to
resort to social
networking and
other digital media
for investment
comparisons and
related advice.
10
CASE STUDY
Based in Dubai International Financial Centre (DIFC) and
regulated by Dubai Financial Services Authority (DFSA), the
company provides bespoke solutions with the core objective
to accumulate, preserve and enhance clients wealth, both
personal and corporate.
The companys services include:
Dealing in Investment as Agent
Advising on Investments, Financial Products or Credit
Arranging Credit or Deals in Investments
Arranging Custody
Project Background
While most other companies in the DIFC operate as either
referral or representative agents, Sidra Capital planned to
embark on a relatively new omnibus model. Through this
model, the clients wealth management requirements would
be met through a single bank account and a single custody
account. All individual customer accounts would be
segregated from this one central account.
Sidra Capital naturally had some unique expectations from
any end-to-end technology platform that they would select.
Sidra needed a solution that was flexible and reliable and
that would take care of all functions starting from client
on-boarding to reporting.
The solution was critical to demonstrate the capability to
win the license from DFSA in a strictly regulated
environment.
Powering
Sidra Capital
Read why Agile FT was chosen as the
preferred technology partner...
Sidra Capital (DIFC) Limited is
a fully owned subsidiary of
Group Sidra LLC - a
conglomerate having focus in
socio-economic developments of
value enhancing in the private
arena in the MENA region.
11
CASE STUDY
Supplier Selection
Sidra Capital conducted a thorough due diligence on a dozen
leading software solutions in the investment technology
space, using stringent evaluation criteria across front, mid
and back-office functions including the ability for the
software to manage investments across various asset classes
including equities, money markets, debt, derivatives and
structured instruments.
Sidra Capital chose Agile FTs Agilis Investment
Management Suite (IMS) for what CEO Ajay Arora calls its
Double S edge of Service and Security. It was a perfect
match as service and security are of paramount importance
to Sidra Capital and we need to ensure the highest levels for
our customers and regulators. We found that Agile FT stood
by the same values in its organization and its software
solutions, says Arora.
Agilis IMS, the solution by Agile was selected based on its
capabilities to deliver on Sidras unique requirements. Agile
was competitive on the cost parameters and also scored
highly on Sidras other requirements of service and security.
Implementation
The entire implementation was done in just six weeks owing
to the clarity in objectives of the Sidra Capital Core Team
Can you give us an overview of Sidra Capitals
business model?
Sidra Capital was established around a year back and
received its license in March 2013 as a Category-3
DFSA-regulated entity. Being a relatively new entrant,
we had to ensure that our business model was different
from that adopted by other players. The most prevalent
business model are the referral model (in which the
client has to register with multiple financial services
providers with the attendant burden of multiple KYC
compliance instances) and the representative office
model (in which the assets are held through the main
office overseas and only the customer acquisition and
management process takes place at the client location).
Our business model, which incidentally was a first for
the DFSA, is an omnibus model wherein for each
customer we have one bank account and one custodian
account. This custodian account is funded by the client
based on the advice given by Sidra Capital and the
resultant mutual agreement, and is then used to execute
a variety of deals based on the mandate. The technology
that we have deployed from Agile Financial
Technologies allows us to manage multiple asset classes
for a single client, and give a segregated real-time view
of the portfolio to the client. This business model
ensures minimum operational efforts for the client, a
high degree of granularity in terms of portfolio
visibility and the ability to get a true single view of our
client. The technology allows us to handle the entire
process ourselves, right from client on-boarding to
accounting and reporting. At a startup level, I believe we
are the first in the region to have this kind of business
model.
What services does Sidra Capital provide?
We have three business verticals - investment banking,
family office and corporate finance. While investment
banking and corporate finance are services needed by
companies, our family office services are needed by
individuals.
Which is your target customer segment?
Our target audience is primarily entrepreneurs, who
have corporate needs to scale up their business to
greater heights, and who will, at some point, need our
family office services to manage and grow their personal
wealth. While we have not kept any particular
restrictions on geographical focus, the majority of our
customers are from the Middle East & Africa (MENA)
region, especially in the sub-USD 50 million bracket.
Our wider attempt in the near future will be to promote
the growth of a vibrant capital market specifically for
small and medium enterprises who can then tap those
resources as their business grows rather than relying
solely on debt funding. I believe that any country which
wants to do well economically has to ensure a strong
capital market in which there is active participation by
small and medium enterprises.
In conversation with
Ajay Arora, CEO, Sidra Capital.
12
CASE STUDY
together with the robustness and flexibility of the Agilis IMS system. Moreover
the complete deployment process was carried out remotely by Agile FTs
strong Development Centre in India. The implementation time of six weeks
also includes training which was entirely completed in just four days, again
remotely with Agiles team situated in India.
Kalpesh Desai, CEO, Agile FT adds, Sidra Capitals leadership team is
extremely focused and were clear on what they wanted to accomplish from
both a go-to-market and from a regulatory compliance process. The
implementation process which was completed in record time is an example of
exemplary teamwork across both enterprises.
Business Benefits
It was only after the project was implemented that Sidra was able to
demonstrate the capabilities required to win a license from the DFSA. Agiles
solution Agilis IMS helped Sidra comply with all the requirements laid down
by auditors, compliance and regulatory bodies and therefore acquire the license
to start its operations.
The deployment of Agilis IMS at Sidra Capital lays down a strong technology
platform that enables Sidra Capital to pursue the omnibus business model in
relation to the advisory provided to family offices for both Wealth Creation
and Wealth Preservation. It also fulfils Investment Banking, Corporate Finance
as well as Family Office needs of both corporates and entrepreneurs.
Agilis IMS has automated the entire end-to-end operations in Sidra Capital,
from, client onboarding, KYC, wealth management, security controls,
compliance, and reporting to accounting.
Conclusion
Sidra Capital seeks to offer a hassle-free alternative to investors to tap capital
markets. Agilis IMS has empowered Sidra Capital to ensure exemplary service
levels and security to its clients, whilst enabling it to meet the stringent
compliance and audit requirements of DFSA.
The technology
platform from
Agile FT was
instrumental in
preparing us for
our regulatory
license approval
from the Dubai
Financial Services
Authority.
- Ajay Arora,
CEO, Sidra Capital
(L-R) Ajay Arora, CEO, Sidra Capital (DIFC) Limited; Shefali Khera, Chief Marketing Officer &
Business Head, Agile FT; Kalpesh Desai, CEO, Agile FT.
13
ARTICLE
Bancassurance
in Middle East
& Africa
Business imperatives to consider while
deploying technology
The bancassurance model is capable of bringing huge
benefits not only to banks and insurance companies but also
to customers through lower costs and greater credibility
typically attached to banks.
In the Middle East and Africa too, bancassurance is picking
up as a cost-effective channel for reaching out to the mass
market as well as to cross sell insurance products to the high-
income segments.
The traditional drivers for increasing insurance penetration
through bancassurance are in place -
rising GDP and income levels driving demand for
insurance products;
developing insurance sector in the mass market as well as
high income segments;
rising penetration of compulsory insurance such as
motor and health;
growth of Takaful or Shariah compliant insurance.
Besides these drivers, there are strong economic and
financial sector cues that support the growth of
bancassurance as a strong channel for insurance distribution
in the region in the near future:
Evolving Regulatory Frameworks
The growth of bancassurance requires a regulatory
environment conducive to fostering investments and
protecting consumer interests. As governments and
regulatory agencies in several countries are now taking
Developing countries all over
the world have been
experiencing strong growth in
bancassurance, a model in which
a bank distributes the products
of an insurance company. The
biggest reason for this is that
insurance penetration is lower
than the banking penetration,
which presents a distribution
opportunity to tap previously
uncovered customer segments.
cognizance of the opportunity provided by bancassurance,
there is likely to be significant traction in the coming years.
A clear example of the correlation between a nurturing
environment and bancassurance development can be seen in
Morocco, where there has been significant growth after
bancassurance in life insurance was formally allowed in
2005. Banks in Morocco are seeking to become one-stop
providers of retail financial services and bancassurance plays
a critical role in that strategy. An estimated 25 percent of
premiums are accounted through bancassurance, a
proportion that has seen a huge rise since the government
opened doors in 2005.
Variety of Operating Models Being Explored
Though bancassurance as a concept started in Europe with
the full integration model, there have since been several
different kinds of approaches to bancassurance.
In the Middle East and Africa, local and regional banks are
often owned by large financial consortiums that also own
insurance companies. This structure makes it possible to
create fully integrated bancassurance operations which allow
insurance companies complete control over the channel and
also a high deal of flexibility to introduce products
customized to various customer segments of the banks.
With several banks looking to become one-stop providers of
financial products in the Middle East and Africa, the
distribution arrangement is also gaining popularity. In this
operating model, the bank ties up with one or more
insurance companies to simply act as an intermediary and
earn commissions on the sale of insurance products. Some
advantages of the fully integrated or joint venture driven
bancassurance may be lost in this type of a partnership
especially in a non exclusive tie-up. However, it entails
relatively lower time-to-market and much lower capital
requirements.
Customer Segmentation and Focus on
Distribution
On the one hand, the insurance companys mandate is to be
able to provide customized, flexible products that are closely
integrated with the banks business. On the other hand, the
growth potential for banks lies in cross-selling the range of
insurance products to different customers across retail,
corporate and private banking segments.
For leveraging the channel effectively, banks need to focus
on two aspects: a variety of distribution methods from over
the counter sales by front line managers to specialist
advisors that deal with specific customer segments with
more advanced needs. This calls for strong customer
segmentation capabilities so as to target the right products at
the right segment. For example, simple mass-market
insurance products linked to banking accounts can be sold
over the counter. However, in the case of more complex
products associated with high net worth (HNW) individuals,
the lead would most likely be transferred to a specialist
advisor trained to deal with HNW customers.
Product Distribution Trends
So far, the Bancassurance channel in the region has been by
and large more popular for life insurance products. Non-life
products have been limited to motor or travel insurance so
14
ARTICLE
Bancassurance Related Regulation in Some of the MENA Countries
far. However, banks have been slowly integrating general
insurance products into the bancassurance distribution as
well.
Distributing Islamic banking or Takaful products (often
called BancaTakaful) is gaining popularity in the Middle East
as banks may tie up with providers of Takaful products
instead of conventional insurance products. HSBC Bank
and EmiratesNBD have been setting up subsidiaries for
Takaful products and have been leading this trend.
Region-specific products such as funeral insurance and
microinsurance through bancassurance are also picking up.
At Standard Chartered, Africa, for example, 60 percent of
individual life insurance sales are made up of funeral
insurance covers.
Strategies for Bancassurance Success
Leveraging bancassurance will require a thorough
understanding of the processing requirements and
challenges from various operating models. Automation in
the value chain will derive from this operating model and in
turn mandate what technologies need to be deployed.
These challenges and requirements will also differ based on
what products are likely to be distributed through the
arrangement.
For example, life and pension products often require greater
compliance and customer information compared to motor
or theft insurance. The bancassurance architecture will have
to take this into consideration.
Customer expectations from retail banking have seen a huge
rise in recent years. When the same customers buy insurance
from banks, they are bound to apply similar standards to
insurance products sold through the same banks.
Front end technologies which offer the customer greater
control, bring transparency and convenient access will have
to be implemented along with the bancassurance strategy.
Incorporating point-of-sales service through integration
with banking functions can be one way in which to achieve
this.
Currently, technology is being applied mainly to direct sales.
However, not many banks are interfacing directly with the
insurance company to sell policies using the insurance
companys web platforms. Pre-underwritten products sold
through such platforms would bring significant ease to the
process. Tele-underwriting or linking to the insurance
companys underwriting systems can enable printing of
policies directly at the bank.
Finally, technology should allow the necessary flexibility to
support a value chain that will be able to leverage resources
from both the bancassurance partners. Customers will gain
the most when their demands are kept at the forefront of
such strategies.
15
ARTICLE
Operating Models for Bancassurance
Focus Areas for Bancassurance Success
Underwriting
Sales support
Lead generation
Training
Technology
Agilis
Investment
Management
A proven and robust end-to-end
technology platform.
16
SOLUTION OVERVIEW
With decreasing margins and increasing customer demands,
investment managers are being forced to think of new
service and distribution models to overcome these
challenges, and it is imperative for them to have access to the
best technology possible.
The Agilis Investment Management Solution is an
integrated suite of products which provide a seamless
technology experience across financial planning, wealth
management, fund management (including asset
management and transfer agency operations), pension funds
administration and custody, bancassurance, and capital
markets.
The solution enables institutions to manage the wealth of its
clients and in the process create more wealth for them.
With a deep understanding that financial institutions need to
go the extra mile to enhance client relationships, the Agilis
Investment Management Solution provides a unique
platform that gives a 360 view of each investor to enable
superior management. There is a strong focus on
relationship management features as well as those related to
regulatory compliance, especially know your customer
(KYC) norms.
Asset management companies and investment managers
need a multi-currency, integrated asset management solution
that is pre-designed to automate the complete investment
management operations. The Agilis Investment
Management Solution manages and controls all asset classes
ranging from Equity, Fixed Income (including Sukuks),
Money Market, Derivatives, Real Estate and Alternative
Though the global financial
crisis resides firmly in the past,
the investment management
industry is still feeling its impact
and continues to be faced with
significant challenges. These
challenges may be attributed to
increasing instability on the
political front globally, combined
with a slew of new and complex
regulatory requirements and
depletion in customer
confidence.
17
SOLUTION OVERVIEW
Investments among others. It automates the complete
process right from pre-deal analytics, order management,
deal capture, position management, valuation, bank account
management, reconciliation, accounting to NAV generation.
The software is intuitive, interactive and provides real-time
information.
The solution also has a powerful risk management module
for maintaining limits and tracking exposure for regulatory
and internal compliance. It is designed to monitor and
administer all portfolios on investment allocation rules as
per regulatory as well as internal investment guidelines. In
case of Islamic investment, adherence to Shariah principles
is provided for. The limit checks are configured as online or
offline, hard or soft based on user requirements. Built in
security alerts warn fund managers, risk managers and other
users in advance in case of any event that is beyond set
parameters. The solution enables asset managers to
innovate, scale up operations and deliver superior
performance through the robust, flexible and powerful tools
available.
Sophisticated analytical tools are available for fund managers
to perform Simulation and Security-level analysis (duration,
convexity and yield to put/call) at the touch of a button.
These analytics equip the users with powerful information
even before the deal takes place (that is at the Pre-Deal
stage). The manager can thus take informed decisions.
Simulation enables the users to view the impact of their
proposed trades on each of their portfolios, the underlying
limits and predicted performance vis--vis a benchmark or a
model portfolio.
The solution has built-in flexibility to cater to specific
workflows of an organization for instance where an order
mandate can originate from a fund managers desk and flow
direct to the dealing room or where a chief dealer may want
a single-step order processing or where complete STP with
the broker may be desired.
All post-deal functions such as Corporate Actions,
Valuation, Banking, Settlement, Accounting and NAV
calculation is taken care of in the solution. The solution is
intuitively built to cater to various types of asset classes in
multiple currencies. The system is able to offer calculations
in both WAC as well as in the First in First Out [FIFO]
method. It also provides for accurate accrual calculations on
both a fixed and floating basis. Another key feature of the
system is the ability to define portfolio level policy for
straight line and constant yield. The software is capable of
comparing the positions as they exist with the funds
custodian and reporting any exceptions.
Portfolio managers need to track and measure various
important metrics for a wide range of funds under
management. Agilis Investment Management simplifies
portfolio valuation using sound portfolio wise policies. The
software uses multiple valuation methods for internal and
regulatory compliance. Built into the system is also a
performance monitoring module that has performance
indicators and compliance mechanisms for management of
assets. The software performs factsheet and attribution
analysis as well as evaluates risk parameters on the entire
portfolio or individual scrips using industry standard
practices including Beta, Sharpes Ratio and Treynors Ratio.
The solution has a robust integration engine which has the
capability of interfacing with third party systems and
comparing feeds with the master data resident in the system.
The third party systems include Custodian system from
leading banks including Citibank, Deutsche Bank and
HSBC; Core Banking solutions or Central General Ledger
[GL]/ERP Systems; Equity Trade Interfaces and Market
Price Feeds from Bloomberg and Reuters.
The banking and accounting module helps the fund
managers to track appropriation, payments and receipts and
provide a comprehensive and reconciled view of the
accounts. The accounting engine can also be configured to
generate vouchers and accounting statements as required by
the customers.
The solution also has a
powerful risk management
module for maintaining
limits and tracking exposure
for regulatory and internal
compliance.
18
SOLUTION OVERVIEW
Most important in this process is a feature where straight-through-processing
of transactions are possible for confirmation of automatic trades and
reconciliations. Deal reporting to the custodian and fund accountant is also
system generated. The system also has the ability to generate a periodic cash-
flow report as well as projections which is vital for the liquidity of the fund
management process.
The solution ably supports pension fund administration and custody including
setup of the fund and custody, registration of employers and employees,
contributions and monthly collection, commuted value, retirement and death
benefits, retirement annuity, attached unit linked funds, and calculation of
taxes and bonus.
The bancassurance module in the solution allows creation and maintenance of
comprehensive profiles of clients as well as Insurance companies and
branches. It is geared to manage a banks insurance business ranging from
assigning revenue targets to its channels to tracking incentive eared by the sales
staff and ultimately total commissions eared by the bank. The system allows
business transactions to be recorded from the banks branch offices with built-
in secure and controlled access rights.
The system allows creation of individual and corporate clients and captures
the essential underwriting details required to generate a proposal. Mass mailing
and policy reminder facilities are available to remind customers about
upcoming renewals well before the expiry date.
The module also enables the bank to create insurance company profiles
including the attachment of specific products to each insurance company. It
provides the facility to import policies directly by interfacing with the
insurance companies database as well as to compare different insurance
products from various insurance companies across multiple parameters.
The system effectively allows for the reconciliation of proposal data with the
issued policy date between the bank and the insurance company. This ensures
that there is no gap, and that the insurance company has processed all the
proposals that have been generated by the bank.
The solution provides for definition of business sources such as bank
employees, brokers, consultants and tele-marketers. It also enables the
definition and monitoring of targets and remuneration for each source of
business and supports the management on finding out the most productive
and profitable source.
Sales commission, incentive, brokerage and consulting fees can be calculated
either as percentage or on a fixed fee basis for all sources of business.
The solution provides for issue of renewal notice to clients well in time before
the renewals are due, as well as endorsements with or without change of
premium. In addition to the front end staff using it, this functionality is also
useful for back office bank employees to calculate commissions and charges
with the insurance company.
Agilis Investment Management allows for easy administration of users
through a centralized console. Every user has a secure login id to the system
and access to the system is defined based on his/her function, role and status
in the organisation. It also has the ability to intuitively generate a variety of
reports that are required by different executives in the management from time-
to-time.
Agilis Investment
Management
simplifies portfolio
valuation using
sound portfolio
wise policies. The
software uses
multiple valuation
methods for
internal and
regulatory
compliance.
AGILE FT IN THE NEWS...
Agile Financial Technologies
has won a contract to deploy Agilis
Core General Insurance software
for THI Insurance, Zimbabwe's
most trusted and recognized insurer
with a history of 75 years of
experience in providing tobacco
hail and windstorm cover to both
large and small scale tobacco
growers. THI Insurance is a
subsidiary of Tetrad Holdings
Limited, whose other operations
include Banking, Asset
Management, Microfinance,
Mining and Property management.
THI Insurance is now expanding
it's product offering to include
property and casualty, marine,
engineering, aviation, accident,
credit, travel, liability, crop,
livestock and motor insurance.
With this expansion plan in mind,
THI Insurance sought to identify a
reliable software product and
provider to partner with them in the
automation of their business
functions and zeroed in on Agile
FT's Agilis General Insurance
Software as it's technology
platform of choice, after an
extensive evaluation of various
software solutions.
"Over the last 75 years, THI
Insurance has been a trusted
insurance provider to the tobacco
and agricultural sector and we are
now expanding our horizon to
cover other niche insurance
products in Zimbabwe and the
region. Taking into account our
growth plans, we wanted to ensure
that we had a dependable general
insurance system to automate our
existing operations and allow us to
offer our customers short term
insurance solutions more
efficiently. After reviewing
solutions from various vendors, we
chose Agilis Core General
Insurance as it is not only feature-
rich but also offers us scalability as
well," says Hamish MacLean,
Managing Director, THI Insurance.
"As part of this deployment,
we will also be implementing
Agilis Portals to extend a web
based presence covering our
agents, brokers and customers. We
are confident that Agilis Core
General Insurance will help us
streamline our operations, enhance
our business processes and help our
growth and expansion plans," adds
Amon Rupiya, Head Of Operations
- (General Insurance).
Agilis is entirely web-based
and ensures quick, accurate and
easy access to information by
employing a modular and
parametric approach to the
management of insurance business
and deploying it enterprise wide. In
addition to the core operational
efficiencies that Agilis brings in,
THI Insurance will also be able to
leverage Agile FT's mobility
solutions and web portals to
automate agents and brokers.
THI Insurance Selects Agilis Core General Insurance
Software For Scalability and Growth
Agile Financial Technologies
has signed a contract with Zambia's
Focus General Insurance (FGI) to
deploy its general insurance
solution - Agilis Core General
Insurance. Agile FT's integrated
comprehensive insurance solution
will cover FGI's entire business
cycle from underwriting and claims
management to reinsurance and
accounting in addition to helping
the company streamline its
business processes and increase
operational efficiency.
According to Issac Gunda,
Managing Director of Focus
General Insurance, "In our quest to
meet the changing needs of our
marketplace as well as to meet our
company's strategic objectives, we
were looking to implement a
comprehensive core insurance
software, which would not only
automate our day to day tasks, but
would also provide mobility and
accessibility to our brokers, agents
and customers. The solution also
needed to be scalable, where it
could easily be integrated with new
technologies to aid our future
growth and expansion in the
region. After thoroughly reviewing
a number of solutions from
different vendors, we found that
Agilis Core General Insurance
came closest to meeting all of our
requirements."
Focus General Insurance Ltd
(FGI) was licensed by the Pension
and Insurance Authority on 1
January 2013 to offer a wide range
of structured general insurance
products in the Zambian market.
The company offers a wide range
of structured general insurance for
both commercial insurance
products and retail/personal
insurance products. Currently
operating only in Zambia, FGI
plans to expand its business and
reach across the African continent
in the near future.
Zambia's Focus General Insurance To
Deploy Agilis Core General Insurance
Solution To Fuel Growth And Efficiency
Agile Financial Technologies
has been ranked amongst the top
10 promising Banking, Financial
Services and Insurance (BFSI)
software solutions providers by
CIO Review magazine. Agile FT
was selected for its excellence in
delivering top-notch software
solutions to BFSI companies, its
innovative approach towards
customers and its achievements
over the last few years.
Christo Jacob, Managing
Editor, CIO Review, says, "Agile
Financial Technologies has been
on our radar since their selection
in 2013's 10 Most Promising
BFSI Software and Solution
Providers and we are happy to
showcase them this year due to
their continuing excellence in
delivering top-notch solutions to
the BFSI Sector. Agile FT's
solutions continued to break new
ground within the past year
benefiting its customers around
the globe and we're excited to
have them featured as one of the
Most Promising BFSI Solution
providers."
Over the last few years,
Agile FT has emerged as a
leading provider of enterprise
software to the banking, financial
services and insurance sectors,
with a growing customer
community of leading banks,
insurance companies, investment
management firms and financial
institutions across 20 countries.
The company's focus has been to
continuously enhance the core
functionality of their already
strong product offerings in
insurance, investment
management and capital markets,
lending and bancassurance. Agile
FT has recently introduced
mobile apps that would allow
their customers' insurance agents
to automate their mobile field
force and agents and provide a
360 degree sales and service
capability.
CIO Review Ranks Agile Financial
Technologies Amongst Top 10 Most Promising
BFSI Software Solutions Providers
www.agile-ft.com
Views expressed in this publication do not necessarily represent the views of Agile FT and the information contained herein is only a brief synopsis of the issues discussed herein. Agile FT makes
no representation as regards the accuracy and completeness of the information contained herein and the same should not be construed as legal, business or technology advice. Agile FT, the authors and
publishers, shall not be responsible for any loss or damage caused to any person on account of errors or omissions.
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Tel : +91.22.425.01200
Fax: +91.22.425.01234
Email: info@agile-ft.com
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Tel : +65-6438 8887
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