Dennis Malone, head of technology architecture, Group Operations Technology, OCBC Bank, highlights the importance of anticipating problems and having a proactive strategy to address issues

Q. Making sure that IT adds value to the business is a key focus at OCBC. What do you plan to work on in 2007, and why?
Making sure that IT adds value to the business is definitely a key focus for us. In that sense, our operations and technology people always have to be asking this critical question, "How can we apply technology so that it can help the business, be it through realizing new revenue streams and raising business efficiency by reducing our unit costs?"

With this in mind, 2007 will see us focusing our efforts on consolidating and strengthening our operational processing capabilities in Singapore and Malaysia, with the main goals of enhancing service quality, increasing productivity and lowering processing costs. In tandem with these objectives, three main themes will recur in all our projects--increasing operational efficiencies, building a true scalability option, and ensuring a smooth end-to-end flow from our front lines through to our processing centres.

For a start, we are going to increase the rate of automation in our processing centres. The introduction of technologies like workflow and imaging allied to tighter integration across our various solutions will help us through this journey by enabling us to have less reliance on paper and reduce the number of hand-offs needed between our teams. This improvement in automation will also then underpin our ability to process increased business volumes and allow us to enjoy true scale capability. In the long run, we see our processing factories becoming volume-insensitive.

As we ramp up our processing capabilities though increased automation, we must not lose sight of the fact that sometimes technology can go wrong. So we also have a couple of major initiatives to address this. Firstly, we are putting in place a central enterprise-wide reconciliation engine which will allow us to automatically identify and reconcile any discrepancies or outages we may have between our front line, processing and back-end systems. Secondly we are deploying what we label as an Enterprise Monitoring System (EMS) across our various platforms and applications. This is a system which monitors the general health and well being of our technology in real-time, and has the capability to alert us to potential problems or issues which may be out there. This then allows us to take remedial action before we have a service disruption.

The other project will be our SOA (Service-Oriented Architecture) deployment. We started on our journey early this year, and we'll continue with that journey. We launched a select number of key projects this year on SOA, and we are seeing some of the benefits being realized--shorter time line for system developments, as well as reusability of services. What we plan to do for 2007 is to deploy the SOA architecture enterprise-wide. So we took some initial steps in 2006, and will now look to deploy on a more extensive basis in 2007.

What specific areas of IT security will OCBC focus on this year?
Being a bank, security is obviously something that we don't take for granted and remains our top-most priority, not only for pure financial considerations, but because we recognize that our reputation, which is one of our strongest assets, is also at stake. There is always an on-going need to ensure that we stay focused on our information security framework, be it strengthening our systems, updating our procedures or educating our people. Simply put, security issues are never-ending, they are always there. The challenge then, becomes one of balancing this need for security with usability and flexibility as well. Our approach is to enhance security, while ensuring that customers are not so inconvenienced that they are reluctant to use new technologies, be it online or mobile banking.

In that sense, two-factor authentication or 2FA for short, which we have just introduced as part of our ongoing efforts to provide a more secure online banking environment for our customers, will continue to be a focus area as we continue to further deploy it in 2007.

Can you recount the experience, or share some of the lessons learnt, in terms of implementing two-factor authentication for Internet banking, which was a key focus for banks in Singapore last year?
Choice based on the individual's needs was definitely one important lesson to take away. Here, we had a security framework that we needed to deploy to our customers. But we did not want to do a one-size-fits-all approach as we needed to take into account the different needs of our customers. So, we developed a solution we believe to be unique. In that, we are giving them choices. Between hardware tokens, mobile phone tokens or SMS tokens, it is up to them to choose the option that best fits their lifestyle needs. Why so many options? Because we are committed to ensuring that the concept of customer experience and customer service is infused in all that we do. While recognizing the need to provide our customers with a more secure online banking environment, we are also mindful that 2FA solutions should not inconvenience them. Hence the decision to go the extra mile to offer different options to suit our customers' varied lifestyles.

What is the No. 1 issue that you think the IT industry as a whole should band together to address collectively?
Again, we are talking about cost and quality. Nothing new in this, but it is one of those issues which provides a perennial challenge to technology people. We see a trend of IT costs increasing and not coming down. This is an important issue because right now, most businesses, including the banks, are seeing compressed margins due to intense competition. Despite costs coming down on many fronts, IT vendors still peg maintenance costs at 18 to 20 percent of software licences, while professional services continue to be well in excess of $1,000 per man-day. Cost of technology is indeed a real struggle for the IT people.

That said, one would think that quality would be improving since we are paying higher prices. Yet, with premium prices, we are not getting better quality, be it in terms of follow-up service, getting the software right the first time round, the number of code drops, project and testing support, or even maintenance support. It's just like I pay a premium to fly SIA for superior service and quality. But if I get quality services and process, I won't complain about that. The reality is, we are paying premium prices for IT, but getting budget airline services.

Recruitment is the other recurring challenge. We are in a strong economy at the moment, and one consequence of this is a tight labor market. It is what you would call an employees' market. Recruiting, retaining and developing top talent thus remains one big challenge for us in 2007.

Right now, we have very good technology people working for us, people who understand technology, people with engineering and science degrees, people who are smart and can value-add to our IT services. What we really need is people who are not just good technologists, but possess good banking domain experience as well. For example, talents with specialized skills in the business of trade finance, payments, treasury or credit cards.