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Solving The Compensation Quagmire A Total Rewards Approach In Today’s Banking Environment

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By any measure, the banking industry is facing challenging times. From a financial perspective, there has been a

dramatic decline in the performance of the banking marketplace. From a human capital perspective, it’s more important than

ever to have an engaged and high performing workforce. Banks are competing for talent at all levels of the organization and

must be diligent in developing compensation programs that attract, motivate and retain a high performing workforce. How can

banks develop and manage compensation programs that reward employees for the bank’s financial performance in this challenging

banking market and, at the same time, be effective in recruiting, motivating and retaining the key talent necessary for the

bank’s success?

A successful total rewards program should be designed to balance the needs of the organization with the needs of the

workforce. While designing a program can be challenging, it does not have to be daunting. Leaders must first identify the

needs of its workforce and then work to develop a total rewards approach that best meets these needs and fits with the

culture of the organization. To start, employers should take a holistic view of compensation, while considering the following

steps:

Step 1: Develop Compensation Philosophy a clearly defined compensation philosophy is the foundation from which a

compensation program should be built. In defining a philosophy specific to your organization, ask:
Where does the bank want to stack up relative to its peers?
What is the right “mix of the total compensation package?
Does it support the business strategy?
Is it aligned with shareholder and stakeholder interests?

Step 2: Determine which total rewards components best fit the organization and the workforce consider salary, bonus,

benefits, awards and recognition programs. What do employees really want? Employees want to feel valued, fairly compensated

and distinctly rewarded and recognized for their contributions to the organization.

Step 3: Review the effectiveness of current pay-for-performance programs. Are they achieving the desired results and

behaviors? In developing or reviewing your existing incentive plan(s) consider the following:

Objective of the plan(s) (e.g. reward for short-term vs. long term-performance)
Is it aligned with the bank’s strategic and business plans?
What are the internal and external influences?
What performance should it reward?
Does it reward high achievers significantly more than others?
Goal setting do the goals still make sense?
Are individual and department goals aligned with the overall strategic plan?
How will performance be assessed? What are the right measures?

It is also important to review the organization’s performance evaluation process to ensure that it is consistent across the

organization, accurate and objective. Employees want equitable evaluations. Again, it’s about employees feeling that they are

valued and treated fairly.

Step 4: Communicate, communicate, communicate. Make certain that all compensation programs are easily understood and well

communicated. Demystify plans so that employees understand how compensation is determined. Employees care just as much, if

not more, about how their pay is determined as what their pay is. When compensation plans are openly and frequently

communicated, employees tend to feel that they are being fairly compensated.

Specific to pay-for-performance plans, make certain that managers and employees have a solid understanding of how the plans

work:

Are the goals clear? Is there a clear line of sight?
Do employees feel empowered to meet goals?
Are there rewards for achieving individual and department goals?
Do employees understand the connection of their contribution to the bank’s success?
Is there a system to track results and provide feedback on a regular basis?

Meeting the needs of employees is not only about compensation. Other highly valued components include career development

opportunities, employee recognition and non monetary rewards, such as flexible work arrangements. In fact, it can be argued

that without these important components, even the most rewarding compensation package is not enough to recruit, motivate and

retain your valuable human capital.

Future Of Online Banking Authentication

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Banking on Internet and mobile is gaining popularity

The Pew Internet & American Life Project Tracking survey of December 2010 said that nearly 60% of all Americans who used the Internet did some banking over it. In the United Kingdom, the number of bank accounts registered for Internet banking grew sharply from 28 million in 2006 to 45 million in 2010. With over 100 million, a Chinese bank has the largest number of Internet banking users in the world.

Cut to mobile banking. A research firm estimated that about 110 million people worldwide used mobile banking and related services in 2010. It also indicated that the geographies of Asia Pacific, Middle East and Africa would be the most important markets for financial services using the mobile device. Another one forecasts a stupendous 660% growth in mobile banking and payment services between 2009 and 2014.

A number of factors, including lower cost of connectivity, greater Internet and mobile Internet penetration, affordability of devices and the arrival of the smartphone have gone into popularizing online (Internet and mobile) banking around the world.

However, security threats continue to loom

While these figures are impressive, these could have been higher, had it not been for the security threats surrounding online banking such as phishing, pharming, hacking, keystroke logging, Man-in-the-middle, Trojan horses and several other modes of attack that discourage adoption. The fact remains that despite advancement in security technology, fraudsters still manage to breach banks defenses from time to time. Consider these numbers: every month, around 18,000 phishing attacks take place around the world; 3% of Internet users from the EU27 group of countries lost money to online fraud last year; and there are at least 2,500 varieties of e-banking malware. Nearly 80% of U.S. banks think that malware on their customers PC is a top security risk. Indeed this seems justified because U.S. consumers lost over US$ 2 billion and 1.3 million PCs to malware in 2010.
A compilation of the security threats to mobile and online banking in 2011 ranked malware distribution through social networks, attacks targeted at specific organizations and theft of financial information using malware, at the top.

While fear of fraud has kept a number of customers all over the world from using Internet or mobile banking, at the same time, it has made banking institutions more cautious with their security policies. While there are many threats as described above, a very strong authentication mechanism for customers and transactions will address most fraud related issues. In addition to employing authentication techniques some banks also resort to other measures such as limiting the number of online banking operations that a customer can perform each day, capping the value of individual transactions, or applying additional layers of user authentication in the case of high value or exceptional transactions. On the face of it, banks apply such restrictions to protect their customers. There is also an element of self-interest in it as the banks would like to limit their own risk as well in the event of a transaction being initiated by someone who is not authorized to do so.

The current state of online banking authentication

Having mentioned earlier that authentication of customers and transactions forms the foundation in preventing of online banking fraud; let us look at the current state of online banking authentication models. At present, authentication of online banking users is done using any or a combination of the following methods:

User Id and password: This is the most popular and common method, which involves asking users to enter their User Id and password. As additional security, users may be required to ensure that their passwords are strong, change them routinely after a fixed number of days, or may be assigned a different one for transaction authorization.

Two-factor authentication: This method verifies users identity based on something that they know (user name and password) and something else that they have. For example, a bank might provide a token (physical or virtual) to customers, who, besides entering their password, must enter a random number generated by the token to authenticate themselves each time they conduct a transaction like a payment, for example. Alternatively, the bank might send a One Time Password (OTP) to the customers registered mobile device each time they initiate that transaction. In addition, the bank might subject customers to further scrutiny in case they are performing high value transactions or indulging in any activity that arouses suspicion. Some banks also verify the IP address of the device using which a customer performs a transaction, and should that change, resort to further querying and other forms of additional authentication.

The extent of authentication varies across banks, and depends on its security infrastructure as well as its risk tolerance guided by its risk policies. No doubt, two- factor authentication is more effective at preventing impersonation, but, as the recent breach of RSAs tokens showed, it is not 100% foolproof in fact, a study of banking fraud-related challenges in Latin America showed than almost a third of token users didnt quite trust them. This is the reason why banks take the additional precaution of restricting transactions inspite of implementing such security arrangements. That apart, tools of two-factor authentication have other limitations token are expensive to produce, distribute and administer, and OTPs sent via SMS could take time to reach.

Alternate models of authentication

The recent advancements in emerging technologies could enable new modes of more secure authentication without impacting customer experience. These advancements leverage the inherent capabilities of smartphones to introduce a third factor of identity verification. In three-factor authentication, in addition to furnishing their regular password and an OTP that appears on their token or mobile phone, users will be asked to present something that they possess, which would irrefutably prove their identity. This third factor could be captured using either an application that is installed on the customers smartphones or an inbuilt feature or capability of the device.

Some examples of the third factor are fingerprint, retinal image and voice. Assume for a moment that a customer is trying to transfer a very large sum of money via mobile banking. In the new model of authentication, after the customer submits his two passwords, an application that is loaded on his mobile will prompt him to provide a third factor, say his fingerprint. The customer places his finger on the smartphone screen, following which the application scans the impression and transmits it to the bank, where it is matched against the fingerprint image in their records.

There are other possibilities of biometric authentication as well, such as capturing words spoken by the customer via his phone and matching them against a previously authenticated sample of voice that exists in the banks records, or asking him to take a photograph or retinal scan with his smartphones camera and send it to the bank for approval and authorization.

It is also possible for banks to conduct three-factor authentication of customers who dont own a smartphone, by providing them a device, which can be plugged into their devices which is capable of capturing and transmitting the biometric information.

Key success factors for adoption of newer models of authentication

Currently, the new models of online authentication are in various stages of evolution, and are yet to be commercialized. Once their technology is perfected, these methods can quickly become mainstream security procedure. The following factors play a critical role in creating a favorable environment for the new authentication models to thrive and grow as mainstream models :

Infrastructure: Capture and verification of fingerprint, voice or any other biometric information requires special infrastructure to be set up and integrated. On the capture and verification, support is available from both Government and external agencies, which can capture and store customers biometric samples as well as provide applications to help the banks verify the information.

Advancements in storage technology: Over the years, data storage technology has progressed leaps and bounds that the cost of storage has drastically reduced; the cost per GB of data in 2010 was 1/10th of that in 2000. This combined with increased efficiencies in algorithms of data storage of information such as biometrics has helped banks to attain a position where they could leverage economies of scale with respect to data storage in order to keep the costs of maintaining massive volumes of biometric information manageable. Emergence of the Cloud will only accelerate the ability of banks to adopt this trend faster without having to worry about scalability or performance or security of such data.

Device proliferation: The adoption of the new authentication methods is directly linked to smartphone penetration. For this reason, these techniques would have been unworkable a few years ago; however, with smartphone usage expected to cross 1.7 billion by 2014, and annual sales growing in the region of 75 to 80 percent, the stage is set to welcome sophisticated forms of authentication in the next 3 to 5 years.

Business case: Analysts predict that the spending by banks on anti-fraud solutions will grow at about 30% over the next few years. This is clearly indicative of the industrys concern about the growing sophistication of fraud techniques, which continue to breach security systems, even as theyve become stronger. While this is a clear trigger for the adoption of better authentication solutions such as those built on three factors banks may not invest in them unless they find that the investment more than pays for itself by way of reduction in fraud.

That being said, factors such as technology advancement, reduction in data storage cost, and the availability of a support ecosystem of external partners are favourable to bringing down the cost of implementation, and will thereby strengthen the business case for adoption of the new security models.

In many countries, two-factor authentication is already mandatory for performing online financial transactions, and it is quite possible that this will progress to three factors in future, thus giving the necessary impetus to newer methods.While the above factors are not directly led by consumer behavior, higher customer adoption of online banking could also force banks to look into sophisticated models of authentication. Many banks across the world are now offering more than just banking transactions on their online banking portals, extending the scope of services to wealth management, transaction behavior-led product sales, virtual banking, customer networking etc. If these strategies start to pay dividends then they could also result in higher adoption of online banking, thus forcing banks to adopt the
new models of authentication.

This is an ongoing journey

Signs are ripe that sooner or later, the above mentioned factors will converge to a tipping point when the current methods of authentication will make way for more sophisticated ones. However, this is not the end of the road. While multi-factor authentication looks like a foolproof solution under current circumstances, it is also true that even this will not stop an attacker forever, but merely slow him/her down. The implementation of security technology is neither a one-time effort, nor a guarantee of lifetime protection. What looks like a cutting-edge solution today will be standard fare tomorrow and out of date a few years thereafter. But for now, the future of online banking authentication appears headed in the direction discussed in this paper.

Document Software, a Path to an Ecological Banking Document Management

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Banks were among the early adopters of implementing document software in their banking document management processes.

One of the biggest changes that society has experienced in recent years is the awakening to the importance of the environment. Although there is still a long way to go, no one is indifferent to the effects of climatic change. Warnings that before were dismissed as apocalyptic hysteria are now being taken more seriously and there isn’t a citizen or company that isn’t adopting ecologically sustainable measures in their daily activities.

Proof of this is found in corporate social responsibility programs that are being announced by organizations of all kinds, new developments that have led to the rise of the technology known as Green IT and policies in which many companies are obligating their employees to adopt related to reducing printing and paper consumption.

In Spain more than 270,000 tons of paper were consumed last year and a large portion of this was devoted to printing and copying business documents. Many organizations from all sectors are now turning to technology to minimize this practice, while others have already been relying on document software for this for some time.

Banks profitability resulting from innovation

Banks and other financial businesses have been standard bearers in adopting emerging technologies and document software is no exception. Twenty years ago it was common to use pre-printed banking forms, static forms that didn’t allow hardly any modification and that consumed large amounts of resources in banking offices.

The most innovative banks opted for document software to resolve this issue. This technology allowed them to eliminate their use of pre-printed banking forms with applications that made it possible to easily design of any kind of form. Thus, thanks to the implementation of banking document management solutions, when customers requested bank statements, invoices or contracts, their data could automatically be merged with the appropriate forms and much more professional looking documents could be delivered.

This method of producing documents not only improved the image that customers had of the financial institutions with which they worked, but it also served to reduce the paper consumption and costs dedicated to these tasks.

It could be said that the banking sector was one of the first to implement ‘green technology’ to establish ecologically sustainable operating policies, banking document management policies which also increased employee productivity and profits.

Endless options for implementing software solutions in the banking sector

With the passage of time and given the positive results, the banking industry continues to consider Information Technology as an integral motor of its business. Hence, it has initiated projects including the most modern technologies. Server virtualization, adoption of service oriented architecture or opting for business intelligence initiatives are clear examples of the innovation that this sector is advocating.

In most cases, these innovations have not only meant optimization of internal processes in bank offices or increased profits, they have also led to adopting more environmental policies that reduce CO2 emissions and energy consumption.

The adoption of banking document software solutions perhaps have contributed the most to banks maintaining environmentally friendly policies, not only for eliminating pre-printed forms, but also for the evolution of recent years that the banking sector has welcomed with open arms.

Banking document management software – A global solution

Financial organizations interact with their customers with printed documentation in their office networks, mass mailing and mass emailing information and using Internet portals. In everyone of these processes, quality document software can make a difference in making organizations more competitive and considerably reducing their costs.

If documentation is mostly printed at different delegations of a banking organization, a printing control system that can be installed locally or as a central server, can be a determining factor in fully optimizing the organization’s printing system. With the printing control software solution that modern document software provides, print quotas can be assigned to users and departments and detailed reports can be generated with which an organization can control the amount of resources it consumes in terms of hardware and supplies.

It’s only logical that being able to control the number of prints and copies will also encourage employees to personally adopt more responsible consumption habits, and as a consequence, the printing costs for the organization will be even further reduced.

Electronic banking and environmentally friendly storage

The Web also offers many possibilities and banks should take advantage of them to increase their productivity. It is much more efficient to send a mass emailing than to print hundreds of pages, batch them, stuff them in envelopes and mail them to their respective recipients.

Real-time document generation on the Internet is another advantage that document software provides. Previously, customers had to go to an office to get bank statements, where in the best scenarios they were printed and delivered in a few minutes. Now, they only have to access a bank portal to make their requests. And in a matter of a few seconds, they can see them on their computer screens, all in a manner that is environmentally friendly and profitable for the organization.

Once documents are generated and distributed, financial institutions must store them in the event that they have to be retrieved in the future. Storage has always been an authentic headache for any organization, especially for those that manage large volumes of documents.

Digitalization reduces the space formerly required for archiving paper. Combined with document management software enabling easy search and retrieval of the electronically stored information, an essential process is gained for achieving authentic ecologically sustainable and profitable banking.

By implementing document software the banking and insurance companies have given multiple examples for how document management solutions help saving costs and at the same time improve customer satisfaction, employee efficiency and being more responsible with our environment.

Have You Ever Considered Private Banking –

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Most of us feel that taxes are one of the main barriers to true success with considerable sums of money having to go to various national institutions whenever we have profits coming our way. Another issue surrounding the financial sector is withdrawals and more specifically the inability to access large sums of your own money in a rapid manner without having to go through a painstaking and lengthy process. Using private banking – ??????????? as opposed to the traditional banking solutions, basically means that you will be taking your business to an offshore service provider that allows you rapid access to your funds whilst providing complete confidentiality. It also offers a wide range of investment choices not typically found with domestic banks.

There are numerous countries around the world that do not impose the same strict financial regulations as such high tax nations, and these countries have become heavens for investors from all over the world who are seeking ways to grow their portfolios without having to take on any additional risks. In addition these extra services provided by private banking firms ??????????? means that your money can access investments not normally found at domestic firms with lower minimums. For example many funds cater to large institutions with minimum investments of US$10,000,000 and the same investments can be accessed via private banking firms ??????????? for US$100,000.

The benefits of using private banking – ??????????? really start to become visible the more one utilizes them. Not only does private banking reduce the amount and quantum of the taxes you have become accustomed to paying but you also have more access to your funds. Moreover, by using private banking – ??????????? as an alternative to the traditional banking solutions available to you in your country of residence, you also receive easier access to profitable investment opportunities such as an offshore regular saving plan – ???????, offshore hedge funds and the list continues to include a large variety of other options that you may not even consider otherwise.

The most basic definition of private banking – ??????????? is also the most correct one, which is that private banking – ??????????? is definitively a means of possessing and using bank accounts in other countries having a world of choice from one account with full confidentiality. Apart from the above enumerated benefits such as easier access to offshore regular saving plan – ??????? and other financial investment opportunities, private banking – ??????????? is also renowned for offering those interested a considerably increased level of privacy, a good level of security against instability, be it political, financial or local.

Also, this great option leads you to benefit from reduced restrictions from a legal standpoint. In terms of what you can actually expect from private banking – ??????????? or even investing in an offshore regular saving plan – ???????, you should know that they are very similar to the traditional options you have been using. The services are very similar and you can benefit from all the traditional benefits such as credit and debit cards that work anywhere in the world and so on.

In addition to all this, working with a well experienced service provider that has the expertise needed to provide high quality services, you can also increase your investment portfolio with an offshore regular saving plan – ???????, currency exchange plans, and much more.

For more resources about ??????????? or about ???????, please review these links.

Take Expert Help While Going for Equity Investment Banking

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Investment banking is a widely accepted phenomenon presently, the major reason being expert advice provided at every step you need to take. Financial giants take the responsibility of making sure your money grows avoiding the risk of down fall. Today every person at some point or the other thinks about investing some amount of money in the stock market. A major worry of all these people is the uncertainty; investment banking beats these blues and offers best possible investment advice to its customers.

A major chunk of people involved in investment banking do not have the time to keep an eye on the ever changing markets and track their returns. In such cases arises the need for investment banking services. These companies do all the hard work of market research and analysis and advice investors on where to put their money for maximum returns. This also depends upon the amount of money the person is willing to investment.

There are many sectors in which investment banking is being carried out, few of them include retail healthcare, insurance and automobiles. Another emerging trend in this banking is that of equity investments. Equity investment banking is based on the dividends of the existing shares an individual holds. There are expert advisors who guide the movement of funds here as well so that there are no last moment disappointing surprises.

When it comes to investing money not all have the perfect knack hence it is always good to seek help of an expert investment banking company or equity investment banking services. Money after all is a crucial issue and you would always want to see it grow systematically. Another advantage of investment experts is they help you understand the market well. You get to know where your money is going and the reason behind it too. These services do come with at some extra cost but are sure to give you peaceful night sleeps and not make check the stock market prices every now and then. Let the experts do their job so that you can relax and reap the benefits.

Choosing the right financial advisor is also important in such cases. Also reading the fine print before finalizing anything is advised as there are many terms and conditions that come along with investment banking. You can take reviews of family members, friends, colleagues etc in deciding which and choose. There are numerous financial institutions and each one of them is offering investment banking services due to its rising demand.