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Don't fall behind the eight ball: Keeping the documents straight with KM

Financial institutions, facing regulatory and competitive pressures, are focused more than ever on managing knowledge.

By Kim Ann Zimmermann

Because financial institutions must keep up with key regulations and ensure compliance, their document and knowledge management practices have to be beyond reproach.

In addition, financial services companies must meet all of those challenges in a competitive environment. They're fighting for customers in a number of venues, most notably the Internet, which has enabled financial institutions to go beyond their local markets as they troll for new business.

On the regulatory side, there is Basel 11, a revised code on risk management for global financial institutions that will go into effect in 2006. That regulation aims to make banks' assessments of their loans and investments more sensitive to risk, such as loan defaults or volatile global financial markets.

The knowledge management implications of complying with the new code are enormous. Financial institutions will have to link database and risk management systems around the world, many of which are based on different technical standards. Data within those systems will also have to be verified.

Another regulation affecting all public companies is Sarbanes-Oxley, which encompasses corporate governance and demands strict internal controls for the storage of all corporate documents. Large publicly held companies will have until mid-2004 to meet the financial reporting and certification requirements of the Sarbanes-Oxley Act. Smaller U.S. and foreign firms must comply for their fiscal years ending on or after April 15, 2005.

In addition, financial services institutions need to ensure that employees have been certified and licensed to sell securities and other financial products to the public. The ability to quickly produce documentation of compliance with those certifications is crucial during an audit by regulators.

At the same time that financial institutions are facing increased regulatory pressures, they are trying to survive in a highly competitive environment where consumers can search for the best rates on a mortgage, for example, over the Internet, and are no longer limited to local financial institutions.

One of the biggest challenges financial institutions face in managing knowledge is bringing together a customer’s financial records from separate systems. Some financial institutions, such as SunTrust Banks, have deployed marketing data marts in order to consolidate data from across the company.

The SunTrust marketing data mart from Quaero leverages campaign management and business intelligence/reporting tools and consolidates data from across the organization's various systems to help enhance customer service and strengthen client relationships.

"Improving our information-driven marketing is a priority for SunTrust," says Greg Holzwarth, SunTrust's senior VP and managing director of customer information management.

Another financial services company, Swiss Life (UK), part of Swiss Life Group, one of Europe's oldest and largest financial services organizations, is deploying software to enable rapid assembly and delivery of documents to customers and agents.

Swiss Life (UK), based in Liverpool, England, is using software from Cypress to bring together customer documents that reside in separate systems.

“In a competitive financial services market, our ability through Cypress to get documents into customers’ and agents’ hands faster gives us an edge,” says Grover Wright, project manager at Swiss Life’s Personal Finance Business Unit. “Cypress CPF automatically identifies, captures and assembles all the required documents, no matter what systems or formats they are in, and enables us to deliver them instantly.”

Cypress CPF allows Swiss Life to rapidly assemble complex bundles of documents—including quotes, premium collections, policies and claims—and deliver them based on recipients’ specific requirements and profiles. Each bundle can consist of six to eight related documents, and each document may be used in a number of different bundles.

“The software automates the process, identifying the type and number of documents required and automatically placing them in the right sequence. We don’t duplicate effort when creating correspondence, and we can maximize output and control costs,” says Wright.

Swiss Life is using Cypress’ output management capabilities to view and control all its output devices, as well as create Adobe PDF format files for other business-critical systems.


Open Text recently launched a Livelink solution to help financial institutions manage critical information in the face of tough, new industry regulations. The solution will give companies a Web-based regulatory compliance infrastructure they can deploy quickly to track, report and manage all the required documents and data, as well as to handle employee training, licensing and certification.

“The combined impact of new regulations on the financial services industry will make or break some organizations in the years ahead,” says Bill Forquer, senior VP of business development at Open Text.

The solution manages regulated documents throughout the life cycle, including authoring, reviews/edits and approvals. It also creates internal processes that ensure an organization has the capabilities to manage and respond in a compliant manner. In addition, Livelink manages professional registration and licensing records.

To facilitate compliance with the Basel II risk management requirements specified by the Bank for International Settlements BIS(BIS, bis.org), Reveleus offers Basel II, which provides banks with a framework for capital adequacy compliance, supervision and disclosure. Basel II requires banks to guarantee data integrity in order to effectively address all risk dimensions—credit, market and operational--and provide an accurate calculation of exposure.

"Basel II poses significant enterprisewide challenges. The process of reaching compliance can be costly," says S. Ramakrishna, CEO of Reveleus.


In a rapidly changing environment, successful financial institutions must develop new products and communicate them to customers and prospective customers immediately.

ING Direct was using a system from Sanchez Computer Associates (sanchez.com) to manage loan and deposit products from a centralized system. But now all of the financial institution’s products are handled using a single database, reducing the need to maintain multiple data warehouses.

“We have designed our infrastructure around the customer, using a centralized database that supports all of our distribution channels,” says Ardaki Kuhlmann, president and CEO.

Sanchez CRM creates a centralized repository of customer data and extracts existing customer information from the core processing system, including outsourced debit/credit cards and investment services. Using the financial institution's own criteria, customer and household account information is summarized, rated and scored to determine overall customer value.

Credit union embraces CM

As financial institutions take to the Internet as a primary vehicle for communicating with customers and potential customers, the ability to manage content efficiently and effectively is crucial.

Desert Schools Federal Credit Union is using content management technology from Vignette to handle its member portal. The credit union, which has 245,000 members, plans to use the content management system as an interface to its online banking system by the end of 2003 and as an internal portal in 2004.

Teaming with consulting partner Inforte, Desert Schools designed and launched its new member site, which enables the credit union to offer accurate and timely content tailored to each member’s needs.

"As a rapidly growing organization, we required a content management solution that offered out-of-the-box functionality to help us meet our immediate goals and the flexibility and scalability to continue to improve our online offerings as we expand," says Gary Laieski, senior director of technology at Desert Schools. "This enabled us to improve our member portal and increase customer satisfaction while making the content management process easier for non-technical staff."

The financial institution is also realizing efficiencies by formalizing the workflow for creating, editing, approving and publishing Web content.

Kim Ann Zimmermann is a free-lance writer, 732-636-3612, e-mail kimzim2764@yahoo.com.

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