25 years of Digital transformation - Silverlake Axis

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25 years of Digital transformation - Silverlake Axis
25 years
   of Digital
Transformation

  Research Insights by
25 years of Digital transformation - Silverlake Axis
FOREWORD
                                                                                                                                              25 years
                                                                                                                                             of Digital
                                                                                                                                          Transformation

                                                            Back in 1989, Silverlake was launched upon Mr Goh Peng Ooi, our
                                                            Executive Chairman and Founder’s conviction that the mathematical
SILVERLAKE AXIS 25 years of Digital Transformation
                                                            Group Theory was the best approach to building core banking systems.
                                                            Today, we are a multibillion dollar organization operating in over 20
                                                            countries across Asia/Pacific and Middle East.
                                                                In celebration of our 25 years in providing core
 2 The Journey Toward a Digital Economy Transformation      banking software to financial institutions, we have
                                                            partnered IDC Financial Insights to share our story in         The way forward
                                                            this booklet. I want to take this opportunity to thank all
                                                                                                                           for Silverlake Axis
 6   case study   Bank Islam Brunei Darussalam                                                                             is to expand from
                                                            our customers, partners and ‘Silverlakers’ for their trust
                                                                                                                           Core Banking to
                                                            and support throughout this journey.
10   case study   Bank Muamalat Malaysia                                                                                   Digital Economy
                                                                The way forward for Silverlake Axis is to expand
                                                                                                                           Transformation
                                                            from Core Banking to Digital Economy Transformation            Partnerships.
14   case study   CIMB Group                                Partnerships. We have ventured beyond our strength in
                                                            Core Banking and we now deliver collaborative Digital
20   case study   OCBC Bank                                 Economy offerings that cut across the banking, insurance, payment,
                                                            retail and logistics industries.
                                                                 To all our esteemed customers, we look forward to our continued
26 Staying Ahead and Breaking New Ground
                                                            partnership over the next 25 years.
                                                                To our potential customers, we look forward to starting our next
                                                            25 year journey with you.

                                                               Dr Raymond Kwong
                                                               CEO and Group Managing Director
                                                               Silverlake Axis Limited

                                                                                                 1
25 years of Digital transformation - Silverlake Axis
25 years
                                                                                                                        of Digital

                                                                                         1989
                                                                                                                     Transformation
Silverlake axis
                                                                                         1999
The Journey Toward a                                                                 Discovering New
                                                                                       Capabilities

Digital Economy Transformation
                                                                                        Unlimited
                                                                                     Opportunities for
                                                                                       Innovation

Over its 25-year journey, Silverlake Axis has
built an impeccable track record of successful
core banking implementations. Founded in
1989, Silverlake Axis has delivered operational
excellence and enabled business transformations
                                                                       2000
                                                                                     Milestones
                                                                       2009
at over 100 organizations across Asia, including                    Unlocking New    Through
40% of the largest banks in Southeast Asia.
                                                                    Opportunities
                                                                    Conquering New   the Last Since    1989,
                                                                                                Silverlake Axis
Over these last several years, the Group has
ventured beyond its core banking strength, rapidly
                                                                        Shores
                                                                                     Decade     has provided
expanding aggressively through acquisitions and                                                          core banking
partnerships to reinvent capabilities and broaden                                                        software
its horizon into new industries and markets.
                                                                                                         enabling
                Recent acquisitions include Merimen Group, a                             2010            key financial
             cloud-based software as a service (SaaS) platform
             for insurance companies, and Cyber Village which
                                                                                         2014            institutions
                                                                                        Quantum
             offers converged self-service banking solutions                         Transformation      across the
             across Web and mobile platforms. Both transactions
             were made in quick succession in mid-2013.
                                                                                      Solutions that
                                                                                     Power the Digital   region to grow
                In December 2014, Silverlake Axis acquired
                                                                                        Economy
                                                                                                         and transform.
             Finzsoft Solutions, an Auckland-based financial
             technology company which develops and
             implements core and vertical specific solutions for
             banks and financial institutions. Finzsoft Solutions
             serves to further expand its geographic reach into
             the Australian and New Zealand markets.
                Such value-accretive investments further
             strengthen the Group as a leading provider of
             digital economy solutions and services to major
             organizations within the banking, insurance,
             payment, retail and logistics industries.

                                                         2                                    3
25 years of Digital transformation - Silverlake Axis
25 years
                                                                                                                                                                                                                                                               of Digital
                                                                                                                                                                                                                                                            Transformation

Silverlake Axis’ Journey
    2014      • Acquired Finzsoft Solution Limited (A provider of solutions for
                banks & financial institutions in New Zealand & Australia)

                                                    • Acquired Merimen Group (Insurance Claims & Policies Processing
    2013                                              Software as a Service Platform)
                                                    • Acquired Cyber Village Sdn Bhd (Mobile & Internet Solution)

                                                                                                                               Silverlake Axis’ Digital Economy
              • Disposal of Silverlake Axis (Beijing) Co. Ltd.
    2012      • Entered Africa Market

                                                    • Transferred from Catalist to the SGX Mainboard
    2011                                            • Acquired IIPL (Enterprise Payment & Integration Platform)                    Capabilities                                                       Banking Solutions
              • Acquired Structured Group (Structured Software Maintenance & Project Services)                                 Silverlake Axis’ Digital Economy Transformation                     Silverlake Axis has an expanded portfolio of
    2010      • Acquired QR Group (Retail & Logistic Solution)                                                                 is driven by the Silverlake Collaborative Capability                solutions covering all aspects of the financial
                                                                                                                               and Intelligence Model (SCCIM). Solutions are                       subsector. Silverlake Axis’ banking solutions include:
                                                    • Transition to Catalist sponsored-supervised regime
    2009                                            • Acquired remaining 75% stake in Silverlake Japan (formerly known as 		   configurable to meet a set of business objectives
                                                      SBI Card Processing Co. Ltd.)                                                                                                                • Silverlake Axis Integrated Banking Solution (SIBS)
                                                                                                                               and empower transformation and business agility.
    2008      • Signed technology partnership                                                                                  The Group’s SCCIM technologies enable the                           • Silverlake Axis Integrated Islamic Banking
                with Zafin Labs                                                                                                financial, business, and social relationships for                     Solution (SIIBS)
                                                    • Appointed as Microsoft Gold Certified Partner
                                                    • Invested in Unisoft/Global InfoTech, China                               today’s digital world, delivering these through the
    2007                                            • Expanded licensing of SIBS into Capital Markets Industry                 four core pillars centering round Collaborative
                                                                                                                                                                                                   • Silverlake Axis Cards System (SCS)
                                                    • Expanded licensing of SIBS into Shared Services Outsourcing Business
              • Acquired Silverlake’s Banking Software Business
                                                                                                                               Computing, Mobility, Intelligence and Cloud.                        • Silverlake Axis Enterprise Payment Platform, and
    2006      • Entered Japan Market
              • Invested in SBI Card Processing Co. Ltd., Japan                                                                • Collaborative Computing         • Intelligence                    • Cyber Village Converged Internet and Mobile
              • Entered Middle-East Market                                                                                       Silverlake Axis Collaborative     Silverlake Axis’ business         Platform.
                                                                                                                                 Architecture provides for         intelligence technologies
    2005
                                                                                                                                 seamless collaboration            are driven by its strength in   These platforms provide high-performance banking
                                                                                                                                 between its suite of banking,     the single view of customer
                                                                                                                                 insurance, payment, retail        information (CIF) capability
                                                                                                                                                                                                   and digital innovation straddling core applications
    2004                                            • Established Beijing office
                                                                                                                                 technologies, and to every        across geographies and          and integration, enterprise-to-enterprise
                                                                                                                                 component of contemporary         channels, allowing for          collaborations, and omni-channel services.
              • Listed on the SGX Sesdaq                                                                                         technologies, connecting          consistent and real-time
    2003      • Entered China market                                                                                             agnostically across new           synchronized experience
              • Entered Sri Lanka market                                                                                         and existing platforms and        and information flow. With      The Group continues to expand its range of solutions
                                                                                                                                 applications.                     the advent of the digital       beyond the financial sector to meet the needs
    2002                                                                                                                                                           economy, these customer-
                                                                                                                                                                   centric engagements further
                                                                                                                                                                                                   of major organizations in the retail and logistics
                                                                                                                               • Mobility
                                                                                                                                 Technologies from the             incorporate unstructured        industries.
    2001                                                                                                                         Group facilitates customers’      data from social media,
                                                                                                                                 mobility strategies by            intelligent sensors and                                                                  Silverlake Axis’
                                                                                                                                 providing mobility through        other customer interactions        Ecosystem of Partnerships                             banking partnerships
    2000      • Expanded into rest of Asia and into Middle East                                                                  devices, experience and           information.                    Over 40% of the largest banks in Southeast Asia          with Bank Islam
                                                                                                                                 context. This converged                                           currently run on SIBS with it being the core system
                                                                                                                                 Internet mobile platform        • Software as a Service
                                                                                                                                                                                                                                                            Brunei Darussalam
                                                                                                                                                                                                   platform partner of choice for 3 of the 5 largest        in Brunei, Bank
    1999      • Regional operations span Southeast Asia:                                                                         from Cyber Village                In tandem with demands
                Malaysia, Singapore, Thailand, Indonesia, Vietnam                                                                offers transformational           for more dynamic and            ASEAN super-regional financial institutions. It          Muamalat and CIMB
                                                                                                                                 features across key               cost-effective technology       also has a pristine 100% success rate for project        in Malaysia, and
                                                                                                                                 industry sectors to help
    1998                                                                                                                                                           architectures, Silverlake
                                                                                                                                                                                                   implementations of over 100 core banking, payment        OCBC in Singapore.
                                                                                                                                 organizations manage the          Axis built and acquired
                                                                                                                                 digital experience for their      technologies to provide         and retail solution migrations in Asia and Middle
                                                                                                                                 customers. Its omni-channel       shared resources, software,     East, and is compliant with 20 countries’ banking
    1997                                                                                                                         real-time synchronization         and information to
                                                                                                                                 across Web and mobile             organizations on demand
                                                                                                                                                                                                   ecosystem which includes e-government, financial
                                                                                                                                 enables operational agility,      through a pay-as-you-go,        exchanges, and payment gateways. With its
    1996      • 16 banking clients in short span of 7 years                                                                      increases customer                utility-style model. The        extension into the insurance, retail and logistics
                                                                                                                                 convenience, and thereby          Group offers such delivery of
                                                                                                                                 engages them across their         hosted services (Software as
                                                                                                                                                                                                   arena, the Silverlake Axis ecosystem will also
  1990-1995                                                                                                                      ecosystem from acquisition,       a Service) over the Internet    expand to ensure it brings critical business expertise
                                                                                                                                 to upsell and retention.          for the motor insurance         and resources to meet the needs of its customers.
                                                                                                                                                                   industry though Merimen’s
    1989      • Founded in Malaysia by Mr Goh Peng Ooi                                                                                                             eClaims and ePolicy
                                                                                                                                                                   engines.

                                              4                                                                                                                                                                5
25 years of Digital transformation - Silverlake Axis
I D C Case Study

                                                                                                                             25 years
                                                                                                                            of Digital
                       On the Mobility Track                                                                             Transformation

                       Bank Islam Brunei Darussalam

                       BY THOMAS ZINK

                       While mobile banking has become a
                       standard for most banks in the region, most                           Solution
                       banks still struggle to move beyond plain vanilla                     Snapshot
                       transactional services and, more importantly,
                       with its monetization. Today, there is a clear shift                   Organization
                       toward adding new forms of mobile payments and                        Bank Brunei Darussalam
                       a mobile commerce capability to embed loyalty                          Operational Challenges
                       and rewards management.                                               Driving customer centricity and
                                                                                             operational excellence by upgrading
                                          The biggest potential for mobility in financial    core systems in order to empower digital
                                   services lies in the convergence of big data and          channels to cater changing customer needs,
                                   mobility resulting in a personalized, contextual, and     compliance requirements and improve cost
                                   real-time interaction with the customer. Clearly, this    efficiency and competitive positioning.
                                   will have the most impact on marketing and loyalty
                                   management, but it will also benefit merchant              Solution
                                   acquisition, transaction banking, and customer            Implementation of Silverlake’s Digital
                                   service. While some banks have made impressive            Economy Model Suite (SDEMS) as well as
                                   progress in this regard, the industry still stands only   its Mobility Lifestyle Ecosystem Backbone
                                   at the beginning of this journey and IDC Financial        (MLEB).
                                   Insights expects considerable investment, as well as
                                   solid returns, in the next five years.                     Project Duration
                                          In this case study, IDC Financial Insights         20 months
                                   looks at the implementation of Silverlake’s Digital
                                   Economy Model Suite (SDEMS) as well as its                 Benefit
                                   Mobility Lifestyle Ecosystem Backbone (MLEB) in           With a target market for digital banking
                                   Bank Islam Brunei Darussalam (BIBD). SDEMS is             services estimated at 45,000 payroll
                                   a customer platform that allows a bank to deliver         customers, the app was downloaded more
                                   all business services to its customers across all         than 36,000 times in 2013. The mobile
                                   channels in a consistent manner. It also delivers         application has unlocked new revenue
                                   sales and service support capabilities to customer-       sources for the bank, adding mobile top-
                                   facing staff and delivers a consistent channel            ups and merchant discount fees as well as
                                   experience across both self-service and manned            increasing utilization of credit and debit
                                   channels.                                                 cards through a better positioning of its
                                                                                             reward and loyalty program.

                   6                                                         7
25 years of Digital transformation - Silverlake Axis
25 years
                                                                                                                                                                                                                                                                                                               of Digital
                                                                                                                                                                                                                                                                                                            Transformation

                        SITUATION OVERVIEW                                               The mobile application was soon enriched with
                                                                                                                                           Figure 2
                        The transformation program, which BIBD launched           enhanced rewards redemption for bill payments and                                                              Silverlake Digital Economy Model Suite
                        in 2011 in partnership with the Silverlake group, set     top-ups, allowing customers to use reward points for
                        the bank on the journey toward customer centricity        instant redemption or making payments with reward
                        and operational excellence. The bank invested in          points at merchants.
                        a large-scale program to upgrade core systems                    The bank also launched a digitized merchant                                                    Silverlake Customer Platform                                                                         Silverlake Card System
                        enhancing product sets and processes, improving           acquiring platform for mobile payments at retail
                        technology infrastructure focusing on getting             outlets and introduced state-of-the-art ecommerce
                        business intelligence right, and boosting IT security     and mcommerce features to optimize functional
                                                                                                                                                                                                                                                   Sales &
                        and business continuity.                                  possibilities of mobile banking. The latter allow              USERS                   Devices             Presentation              Integration                                      Aggregation                            Issuing
                                                                                                                                                                                                                                                  Services
                               A core section of BIBD’s Transformation            customers to pay at selected merchant online stores
                                                                                                                                                                                                                                                                        Customer Holdings           Card
                                                                                  directly from their bank accounts or with reward                                                                                                             Product Application
                        Program (see Figure 1) lies in its Mobility and Digital                                                                                              PC
                                                                                                                                                                                                                       Socket Services                                                         Personalisation      Card Embossing
                        Economy Engagement Program with the main                  points via quick response (QR) codes on BIBD Online.                                                                                     (HTTP)                Credit Approval         Customer CRM
                                                                                                                                                                           Tablet                                                                                                              Card Activation     Profile Info/Balance
                        objective to bring digital services to its customers,            Merchants are also provided with a market-
                                                                                                                                                                                                                                               Loyalty & Rewards        Execute Campaign
                        making it the first bank in the country to provide        leading cash management feature that allows them                                          Kiosk                                                                                                             Card Distribution          Reload
                                                                                                                                                                                                                                                                         Generic Search
                        comprehensive banking services on mobile devices          to monitor online transactions via online banking          Customers                                             Browser                                      Product Pricing
                                                                                                                                                                      Call Center PC
                        (smartphones and tablets).                                from the time a transaction is authorized until                                                                                                                                          Transaction                 Card Management
                                                                                                                                                                                                                                                   Collections             Drill-down
                                                                                  transactions are settled.                                                                                                              Web Services
                               The bank sought to address challenges and                                                                                                   Phone                                            (XML)
                        leverage opportunities driven by changing market                 Finally, a mobile advertising platform using                                                                                                          Cross-sell/Up-sell          Dashboard                      Acquiring
                                                                                  interactive content and the push (marketing)                                          Smartphone
                        forces such as customer needs, compliance                                                                                                                                                                               Channel Services           Statements            Application        Account Creation
                        requirements, and the need for higher cost                messaging capabilities put BIBD into a strong
                                                                                                                                                                         Strip/EMV
                        efficiency, business consolidations, and competition.     position to engage its customers. It helps the bank                                   Chip Reader                                                             Products &                 Risk               Terminal Creation         Clearing/
                                                                                  to reach out to the relevant target market with                                                                                                              Transactions             Management                                     Settlement
                                                                                                                                                                                                                      Content Streaming
                        Solution Overview                                         interactive content, promote new products and
                                                                                                                                             Employees
                                                                                                                                                                         ATM/CDM
                                                                                                                                                                                                                                                      Cards             Unit Management              Merchant Management
                        While Silverlake’s forte lies in its core banking         services, and educate customers in an easy way.                                        Passbook                                                                Mobile Wallets            Credit Policy
                        proposition, SDEMS (see Figure 2) and MLEB were
                        functionally separated from the core platform             FUTURE OUTLOOK                                                                       QR/Bar Code
                                                                                                                                                                                                   MLEB*                                        Reload Services         Sales Compliance     Common application Services

                                                                                  BIBD’s mobile application took the small Brunei                                                                                          External                                       Authorization
                        to ensure that business capabilities driving the                                                                                                 Reader                                                                    Fulfillment                                   Application          Transaction
                                                                                                                                                                                                                          Messaging                                                              Processing           Management
                        customer experience are flexible and can be aligned       market by storm. With a target market for digital                                                                                        Gateways                                      Fraud Detection
                                                                                                                                                                                                                                                 Trust Account
                        across all users and channels.                            banking services estimated at 45,000 payroll                                         Merchant POS                                      (SMS, email)
                                                                                                                                                                                                                                                                              AMLA             Credit Payment      Exception/Dispute
                               This setup provides customers with a               customers, the app was downloaded more                                                                                                                            Help/FAQ                                                         & Chargeback
                                                                                                                                                                                                                                                                            Blacklists
                        consistent “look and feel” across all digital and even    than 36,000 times in 2013. Given BIBD’s strong                                             IVR                                                                                                                  Payment
                                                                                                                                              Partners                                        < External >                                        Transaction                                                          Suspension
                                                                                  position as the country’s largest bank, there is still                                                                                                          Exceptions            Regulatory Reports
                        nondigital channels, while giving the bank flexibility                                                                                                                 Messaging
                                                                                                                                                                                                                                                                                             GL Entries/Accounts
                        in the back office facilitating security governance,      considerable upside potential within its existing                                         RFID                                                                                                                Management          MIS Management
                                                                                  customer base and beyond. Its new customer-                                                                    Other Protocols (e.g. Mobile SMS)                                       Syndication
                        platform administration, and introducing a “build
                        once, deploy everywhere” concept for business             centric strategy has set BIBD apart from its Islamic                                                                                                                                                                 Payment Gateways
                                                                                                                                                                        HSM         Identity – various Authentication Methods and Access Directory Management
                        services. This customer experience is what sets           competitors and puts it into an excellent position to
                        BIBD apart from the typically fragmented frontline        further expand its market dominance.                     * Please refer to Technology White Paper (Rev. 4): A Universal Mobility Enabler for Mobile Internet Commerce, October 2013

                        experience of the competition.                                   The mobile application has unlocked new

                                                                                                                                           revenue sources for the bank, adding mobile                                    many. BIBD’s approach to build a consistent channel
Figure 1                                                                                                                                   top-ups and merchant discount fees as well as                                  experience across both digital and traditional
                                                                                                                                           increasing utilization of credit and debit cards                               channels will largely benefit the customer
    Deployment of BIBD Mobility and Digital Economy Engagement Program                                                                     through a better positioning of its reward and                                 experience and help the bank to manage its
                                                                                                                                           loyalty program. Moreover, it comes with intangible                            operations more efficiently by allowing it to flexibly
                                                                                                                                           benefits of lower operational costs, for instance, by                          adapt to change and implement new products.
           April              OCTOBER                       January                   November                   December
                                                                                                                                           offloading transactions from the branch to low-cost                                   IDC Financial Insights expects that more
           2012                 2012                          2013                      2013                       2013
                                                                                                                                           channels and higher customer satisfaction, which                               banks will move toward an orchestrated channels
                                                                                                                                           eventually may benefit the acquisition and retention                           strategy, playing into the specific strengths of
     Project Kick-off        BIBD Mobile                Digital Merchant            Enhanced Reward            Mobile Advertising          of customers.                                                                  each channel while allowing customers to define
                               Banking                      Platform                  Redemption                   Platform                                                                                               their experience according to their individual                              This Silverlake Axis-
                             Application
                                                       Enable payment at             For bill payments           With interactive          CONCLUSION                                                                     preferences.
                                                                                                                                                                                                                                                                                                      sponsored IDC case study
                                                                                                                                                                                                                                                                                                      (IDC #FI020822V) was first
                                                       merchant outlets via         and top-up services         content and push           Mobile is moving to the core of channel distribution                                                                                                       published in February 2014
                                                                                                                                                                                                                                                                                                      and republished here with
                                                         mobile devices                                            messaging               of banks, yet it remains only one channel out of                                                                                                           permission.

                                                                 8                                                                                                                                                                         9
25 years of Digital transformation - Silverlake Axis
I D C Case Study

                                                                                                                              25 years
                                                                                                                             of Digital
                        Leaping into a Bold New Phase                                                                     Transformation

                        Bank Muamalat Malaysia
                        by Michael Yeo

                        Bank Muamalat Malaysia, headquartered out of
                        Kuala Lumpur, Malaysia, is a fully fledged Islamic                    Solution
                        financial institution providing Shariah compliant                     Snapshot
                        services and products. Founded by an amalgama-
                        tion of Islamic banking assets from three legacy                        Organization
                        institutions in 1999, the bank was the second                         Bank Muamalat Malaysia Berhad
                        full Islamic bank to be incorporated in Malaysia.
                                                                                                Operational Challenges
                        DRB-HICOM of Malaysia is the current majority
                                                                                              Total replacement of an ageing core banking
                        shareholder, with Khazanah Nasional Berhad also                       system that could no longer meet both
                        holding significant interests. The bank currently                     external and customer requirements – while
                        has over 60 branches and 250 ATMs spread across                       still maintaining Shariah compliancy.
                        Malaysia. Assets at year-end March 2014 stood at
                                                                                                Solution
                        approximately US$5.5 billion.
                                                                                              To develop and integrate a new Shariah
                                          Bank Muamalat operates under dynamic                compliant modern and future-ready core
                                   market conditions, against a backdrop of strong            banking system via a ‘big bang’ approach.
                                   domestic and global demand for Islamic banking
                                   products. Being one of the smaller banks in                  Project Duration
                                   Malaysia and serving specific demographics in its          18 months
                                   customer base, the bank’s proposition to its existing
                                   customers has had to remain somewhat distinct                Benefit
                                   to that of the largest banks. The bank’s Islamic           Master customer information file (MCIF)
                                   foundations give rise to perceptions of a trustworthy      in place, quicker turnaround times, reduced
                                   and socially conscious financial partner which             time to market for products and reduction
                                   serves its customers with diligence and fairness in        in errors and risk for the bank. Increased
                                   its proceedings.                                           competitive standing in the Malaysian
                                          New market opportunities abound as                  banking market.
                                   customer-banking requirements have evolved.
                                   Over the last few years, the bank has continuously
                                   adapted to meet new customer expectations. Today,
                                   its branch-based services have given way to a multi-
                                                                                           The Challenge
                                                                                           Bank Muamalat’s existing infrastructure before the
                                   channel approach, with an eye on delivering an
                                                                                           core banking infrastructure refresh was somewhat
                                   “omni-channel experience” of consistent customer
                                                                                           unique. Being a product of historical mergers of
                                   experience across the telephone, ATM and online/
                                                                                           other banks meant that its mainframe core was
                                   mobile channels. These customer requirements,
                                                                                           parked next to that of another bank. This sharing
                                   coupled with the ever-evolving industry regulations,
                                                                                           of physical space presented an issue. While still
                                   dictated the need for a new core banking
                                                                                           operating on separate systems and although there
                                   infrastructure. Thus began the process of searching
                                                                                           was no sharing or intermingling of data between
                                   for the correct technology solution and partner who
                                                                                           the banks, this situation no longer met with Bank
                                   could support them in their next phase of growth.
                                                                                           Negara’s security and risk requirements. It became
                                                                                           imperative that a new core banking system was
                                                                                           needed to meet regulatory compliance and for new
                                                                                           business growth.

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25 years of Digital transformation - Silverlake Axis
25 years
                                                                                                                                                                                                                                                                     of Digital
                                                                                                                                                                                                                                                                  Transformation

                                                                                          The previous solution was also complex in        complexity and effort to this operation. Silverlake     and seamlessly with no major glitches or errors
                                                                                   its nature, having been constructed in a somewhat       Axis’ previous experience with such similar             encountered. Bank Muamalat, with their new
                                                                                   piecemeal fashion over the years. In total, there       implementations also added confidence that this         banking business engine, is beginning to see the
                                                                                   were 15 systems (mostly payments systems and            method could be used to effectively bring systems       benefits of their investment. Turnaround times
                                                                                   related applications) which were used to run key        online as quickly as possible.                          for day-to-day business have improved and new
                                                                                   functionalities within the bank and fed into one                Work began in 2013, and one of the major        products are brought to market at a faster pace than
                                                                                   general ledger component (GL). The streamlining         issues to be first tackled were the multiple customer   before. Existing products and services, which need
                                                                                   and modernization of the GL module was thus             information files being used to track and record        changes to parameters, can now be reconfigured
                                                                                   identified as another critical and prioritized          relevant customer information. The bank’s previous      and sent back to market more quickly. Senior
                                                                                   component of the long overdue core banking              state included a number of different systems in use     management at Bank Muamalat now speaks of
                                                                                   system update.                                          for differing business units. Customer information      clearly seen reductions in data
                                                                                                                                           regarding deposits, hire purchases and financing        errors and loss of data – likely
                                                                                   The Solution                                            was kept in silos across different business units       a result of the simplified and
                                                                                   Bank Muamalat’s management took the decision to         and in seven different systems. Data across banks       integrated architecture that is now      Senior management
                                                                                   explore a total system refresh for their core banking   was extracted and cleansed from various data            in place. Bank Negara’s regulatory       at Bank Muamalat
                                                                                   system and sought the help of capable vendors. Over     silos and migrated to a single consistent data          requirements as well as Shariah          now speaks of clearly
                                                                                   30 global vendors responded to their request for this   file for all customers. Inconsistencies in data         compliancy are now fully met.            seen reductions in data
                                                                                   “rip and replace” effort. Silverlake Axis was chosen    were filtered out to leave a data resource which        In addition, future changes to           errors and loss of data
                                                                                   as the eventual partner due to their prior experience   would enable a bankwide consistent view into the        regulation from both bodies are
                                                                                                                                                                                                                                            – likely a result of the
                                                                                   in the Malaysian market as well as their standing in    relationship that the bank has with that customer.      able to be quickly implemented.
                                                                                   dealing with the product differences and terminology    Opportunities for cross selling of products as well            While updating the bank           simplified and integrated
                                                                                   present in Islamic financial institutions. Silverlake   as groupwide visibility of customer account risk are    to meet current demands was              architecture that is now
                                                                                   Axis’ record of successful implementations with no      now possible. This places the bank in a stronger        the primary concern, SIIBS               in place. Bank Negara’s
                                                                                   major disturbances also stood strongly in their favor   position to capitalize on growth opportunities across   also takes into account future           regulatory requirements
                                                                                   as well as their history of providing comprehensive     its channels as well as to more clearly act upon        needs and is able to integrate           as well as Shariah
                                                                                   on-site support during post implementation phases.      perceived risks and to holistically mitigate them.      seamlessly with new modules for
                                                                                                                                                                                                                                            compliancy are now fully
                                                                                   Local knowledge in this instance was deemed key                 The diversity of systems running in the         newer technologies which may
                                                                                   to Silverlake Axis’ success. Local knowledge both       background proved to be a major challenge as            arise. Bank Muamalat already             met. In addition, future
                                                                                   of conventional regulatory requirements from Bank       they were all fed into one common general ledger        has in place dual modules for            changes to regulation
                                                                                   Negara, and from the requirements set out by the        (GL). This myriad of systems and applications           both consumer and corporate              from both bodies are
                                                                                   Malaysian Shariah Advisory Council on Islamic           required separate teams with different skill sets       online banking and will be looking       able to be quickly
                                                                                   finance related matters.                                for operations and maintenance. Over time, this         forward to implementing a                implemented.
                                                                                          Silverlake Axis’ solution was dubbed the         situation had started to become a major barrier         mobile banking application in the
                                                                                   “Muamalat Banking Solution” with the Silverlake         to integration at all levels in the bank. Costs for     near future. While the bank already has business
                                                                                   Axis Integrated Islamic Banking Solution (SIIBS)        maintaining such a broad range of technology had        intelligence and analytics capability in-house,
                                                                                   being chosen as the core banking framework              also become unattractive. Silverlake Axis Integrated    they are also looking in the future to expand on
                                                                                   which would drive the transformation of the bank        Islamic Banking Solution (SIIBS) simplified these       this capability (now made easier with MCIF firmly
                                                                                   while still adhering to Shariah guidelines. SIIBS is    workflows and replaced legacy systems with the          in place). The SIIBS is able to adapt to these new
                                                                                   built and optimized on the IBM i operating system       relevant integrated modules of their own solution.      business demands via its modular approach and
Local knowledge of                At the operational level, change was             (previously known as AS/400) – a tried and tested       These efforts served to streamline overall system       integrate them cleanly and efficiently into the
conventional regulatory    also much sought after. Staff at all levels of          architecture already in use in multiple major           complexity and the associated possibilities of          new core. New technologies as they emerge,
requirements from Bank
                           the organization who were exposed to the end-           financial institutions globally.                        failures at the multiple interaction points in the      should theoretically pose no major issue for future
Negara, and from the
requirements set out by    user interface found that the infrastructure was               The solution required 18 months of work,         infrastructure. At the same time, this new robust       assimilation.
the Malaysian Shariah      inadequate. User experience was deemed lacking          spanning from 2013 to 2014. Silverlake Axis,            architecture also goes much further in reducing the            Most importantly, the new core has seen the
Advisory Council was       and its overall ability to quickly configure new or     together with Muamalat, decided to implement            support effort and costs which were required in the     bank take important steps towards its ultimate aim
deemed key to Silverlake   existing products was deemed to be insufficient         with a “big bang” approach. All key systems and         previous state.                                         of increasing customer satisfaction and experience
Axis’ success.
                           for the growth that the bank was looking for. At        applications were to be replaced in one phase                                                                   and in using these pillars to increase its market
                           the heart of the issue was the lack of a master         rather than the multi-phase approach selected by        The Result                                              share. In a hyper-competitive domestic and regional
                           customer information file (MCIF), enabling staff to     other institutions. Bank Muamalat’s smaller size        The system switchover from old to new took              banking environment, institutions of all sizes must
                           quickly identify and prioritize customer information.   meant that the big bang approach was optimal in         place in June 2014 after 18 months of work, nine        be innovative and seek new growth opportunities
                           Data regarding the customer was still being kept in     reducing disruption and effort involved in the switch   separate data migration trial runs and four rounds      where others may not yet have explored. For            This Silverlake Axis-
                                                                                                                                                                                                                                                          sponsored IDC case study
                           separate file formats and systems which required        over. A phased approach where relevant modules          of operational readiness tests which tested every       Muamalat, their new core has given them the            (IDC #AP7919017X) was first
                           multiple support skills sets interfering with the       are turned on in sequence over a designated             facet of the switch on process. The “big bang”          leverage with which to meet new business demands       published in February 2015
                                                                                                                                                                                                                                                          and republished here with
                           creation of the much needed MCIF.                       period of time would have added unnecessary             activation approach went on to proceed smoothly         head on and find their place in the market.            permission.

                                                                   12                                                                                                                                          13
25 years of Digital transformation - Silverlake Axis
I D C Case Study

                                                                                                                                25 years
                                                                                                                               of Digital
                        Innovating on a Super-Regional Platform                                                             Transformation

                        CIMB Group
                        by Sui-Jon Ho and Michael Araneta

                        Malaysia’s CIMB Group Holdings Berhad (CIMB
                        Group) presently has one of the most far-                             Solution
                        reaching super-regional operations in Southeast                       Snapshot
                        Asia, with a presence in nine of the 10 member
                        nations of the Association of Southeast Asian                            Organization
                        Nations (ASEAN). CIMB provides a universal suite                      CIMB Group Holdings Berhad
                        of financial products extending across retail,                           Operational Challenges
                        commercial, investment and Islamic banking,                           Staying ahead of fast-changing customer needs
                        while maintaining a strong market leadership in                       and expectations by extending banking services
                        the latter two segments. Through the decade,                          and solutions beyond conventional delivery
                                                                                              channels and into new geographical markets;
                        the bank has undertaken a series of aggressive
                                                                                              ensuring risk management and compliance.
                        expansions, through both well-timed acquisitions
                        and strategic partnerships.                                              Solution
                                                                                              Implementation of Silverlake Axis Integrated
                                          CIMB’s regionalization initiative has seen
                                                                                              Banking Solution.
                                   success, with the bank having clocked in significant
                                   loan and deposit growth from key holdings outside             Budget
                                   Malaysia. In Singapore, CIMB’s loans and deposits          MYR1.1 billion (US$307 million)
                                   registered a 40% and 22% year-on-year growth for
                                   2013 over 2012, while Thailand saw a year-on-year             Project Duration
                                   growth of 12.2% and 8.1% respectively for the              20 months
                                   same period.
                                          As of 2014, CIMB Group had total assets                Benefit
                                   of MYR391.6 billion (US$121 billion). The Group            Launched its commoditized and more
                                   has been publicly listed on the Bursa Malaysia             sophisticated financial products with
                                   main market for 27 years, and its current board            minimal backend disruptions; projected
                                   of principal shareholders comprises Khazanah               cumulative benefits valued at a total of
                                   Nasional with a 30.1% stake, the Employees                 MYR1.5 billion (US$418 million) over the
                                   Provident Fund (EPF) with 15.9% and Mitsubishi             course of 10 years from going live.
                                   UFH Financial Group with 5.0%.

                                   The Challenge                                           the bank embarked simultaneously on technology
                                   It is somewhat easy to credit CIMB Group’s              integration projects as part of its overarching
                                   remarkably steep growth trajectory to the               growth strategy. In this manner, more efficiencies
                                   opportune mergers and acquisition deals and             and economies of scale could be obtained. New
                                   partnerships outside of Malaysia. However, what         efficiencies and synergies aside, IT innovation
                                   is often overlooked is how new operations have          played a particularly vital role in allowing the bank
                                   been successfully integrated into the bank’s            to capitalize on its myriad expansions quickly, by
                                   core business, allowing it to take advantage of         integrating once-independent entities into a single,
                                   efficiencies and economies of scale.                    coherent business operation.
                                           CIMB Group’s regional strategy is also unique          Like many banks over the last decade, CIMB
                                   in another way: while many of its peers have focused    Group was presented with manifold opportunities
                                   on channel expansions and regional outreach alone,      and confronted with challenges brought on by not

                   14                                                     15
25 years of Digital transformation - Silverlake Axis
25 years
                                                                                                                                                                                                                                                                  of Digital
                                                                                                                                                                                                                                                               Transformation

                            just the near-implosion of the financial industry
                            during the global financial crisis, but on needing to
                                                                                    The Solution                                              purpose. To comply with the bank’s definitions
                                                                                                                                              of a regional operating model, the bank and its
                                                                                                                                                                                                       could be contained and managed through the
                                                                                                                                                                                                       resources of the region-wide enterprise.
                                                                                    CIMB Group’s technology-centric approach to
                            tackle the growth of demand within the consumer                                                                   vendor partner decided in 2010 on the creation                  It was also vital that the first deployments
                                                                                    business optimization has persisted since its last
                            markets. On the latter, the bank saw a change                                                                     of a customized core banking solution that was           set key project management precedents, as well
                                                                                    major restructuring exercise in 2006, from which
                            in customer behavior and preferences with them                                                                    based on the Silverlake Axis Integrated Banking          as validated them, such that they could be applied
                                                                                    the group’s full-fledged financial service practice
                            becoming much more mobile as they regionalize,                                                                    Solution (SIBS), but substantially redesigned to         to subsequent rollouts. In Q2 2010, the bank first
                                                                                    was conceived. Even the earliest initiatives by the
                            with financial demands that extend beyond                                                                         accommodate CIMB Group’s specific requirements           instituted a 90-day pre-implementation phase to
                                                                                    Group Information and Operations Division (GIOD)
                            conventional channels and geographies. This                                                                       as a burgeoning super-regional player.                   evaluate its country-agnostic Project Management
                                                                                    were suitably ambitious for its time. Unlike many of
                            brought upon added stress to its technology office                                                                       In terms of both implementation and               Office (PMO) framework, formalize both local and
                                                                                    its peers which typically adopt short-term horizon
                            with its core banking system hardly adapting to the                                                               usage, the 1Platform system consisted of two             ASEAN-wide target operating models alongside
                                                                                    planning, most of CIMB’s projects were initiated with
                            fragmenting business requirements of the bank                                                                     main components:                                         their respective support architectures, and to
                                                                                    a medium- to long-term focus, trading immediate
                            and customers alike, let alone new drivers of risk                                                                                                                         collaborate with Silverlake Axis to
                                                                                    benefits for business sustainability through
                            management and compliance, emergence of new                                                                             • A regional core: Built upon an enhanced          perform critical high-level system
                                                                                    innovation. While most programs-of-work in the
                            channel touch-points, and requirements for less                                                                           SIBS (Version 10) framework, this central        gap analyses.
                                                                                    initial three years revolved around calibration of data
                            commoditized, albeit more personalized products.
                                                                                    management, collection and archival systems, these
                                                                                                                                                      system was co-developed alongside CIMB                  CIMB Group began its               Despite the characteristic
                                                                                    served only as the foundation for more complicated,
                                                                                                                                                      in order to directly meet specific operational   1Platform migration in force by           aversion of banks
                                                                                                                                                      requirements for individual countries. As        August 2010. CIMB Singapore               in general to highly
                                                                                    region-wide projects to come.
                                                                                                                                                      its namesake implies, the regional core is       successfully made its transition
                                                                                            January 2009 was a turning point, as CIMB
                                                                                                                                                                                                       onto a simplified iteration of the
                                                                                                                                                                                                                                                 disruptive projects,
                                                                                                                                                      maintained centrally as the “single version
                                                                                    saw the finalization of a long-deliberated core
                                                                                                                                                      of truth.” All critical software developments    core banking system in November           CIMB’s technology leaders
                                                                                    banking strategy for the Group. At that time, IT and                                                                                                         persisted. They were to
                                                                                                                                                      and updates are first deployed at this level;    2011 on an accelerated timeline
                                                                                    business decision makers agreed that the bank
                                                                                    ultimately needed to have a centralized, robust
                                                                                                                                                      the binary files are then distributed to each    due to regulatory guidelines              some extent motivated by
                                                                                    manufacturing engine capable of delivering a
                                                                                                                                                      country for implementation, according            by the Monetary Authority of              the acquisition for CIMB
                                                                                                                                                      to master data management (MDM)                  Singapore. CIMB Thailand’s new            Thailand and the merger of
                                                                                    standardized level of service and experience to all its
                                                                                                                                                      conventions.                                     core banking system became
                                                                                    customers, regardless of market and geography.
                                                                                                                                                                                                       fully operational four months
                                                                                                                                                                                                                                                 PT Bank Lippo and
                                                                                            It was quite easy to perceive that the
                                                                                                                                                    • A localized core: This alludes to the creation   thereafter, and the bank followed         PT Bank Niaga of Indonesia
                                                                                    1Platform core banking system (as it was boldly                                                                                                              to create CIMB Niaga, which
                                                                                                                                                      of localized capabilities for each country       up on these successes with
                                                                                    envisioned from the beginning) would prove
                                                                                    to be the centerpiece of CIMB’s technological
                                                                                                                                                      that CIMB Group is present in. Support for       the most significant rollout of           was already the sixth-
                                                                                    endeavors for the subsequent five years. MYR1.1
                                                                                                                                                      local interfaces, as well as provisions for      the entire initiative – that for its      largest bank by assets in its
                                                                                                                                                      compliance with domestic technology and          behemoth Malaysian operations.            country upon inception (and
                                                                                    billion (US$307 million) was budgeted solely for
                                                                                                                                                      reporting regulations are all accounted          This Malaysian leg of the
                                                                                    the 1Platform initiative, accounting for 52% of the
                                                                                                                                                                                                       1Platform program involved a
                                                                                                                                                                                                                                                 currently the fifth).
                                                                                                                                                      for in these in-country business rules.
                                                                                    amount allocated to the Group’s entire regional
                                                                                                                                                      Technology-wise, such rules are explicitly       total of five mock runs and four
                                                                                    transformation blueprint spanning 2010 to 2015.
                                                                                                                                                      maintained outside of the regional core by       operational readiness tests before a total of nearly
                                                                                            The bank quickly developed plans of action,
                                                                                                                                                      utilizing SIBS “user hooks” that essentially     10 million client records were deemed ready to be
                                                                                    with resources (both internal and external) made
                                                                                                                                                      serves as entry- and exit-points for deeper      migrated. The “big bang” migration was concluded
                                                                                    ready. Despite the characteristic aversion of
                                                                                                                                                      customization. The demarcation between           in February 2014, with no service disruption, no
                                                                                    banks in general to highly disruptive projects
                                                                                                                                                      localization source codes and the regional-      significant incident and well within budget. By then,
                                                                                    (core banking projects are most disruptive, and
                                                                                                                                                      level code libraries occurs on both a virtual    MYR630 million (US$194.7 million) was attributed to
                                                                                    CIMB’s context at that time also included economic
                                                                                                                                                      and physical basis; when local binary files      the project’s ongoing expenses.
                                                                                    uncertainties brought about by the global financial
                                                                                                                                                      are to be deployed, they are initially hosted           CIMB Group is in the process of facilitating
                                                                                    crisis), the bank’s technology leaders persisted.
                                                                                                                                                      on testing/production boxes, isolated within     CIMB Niaga’s migration onto the 1Platform system,
                                                                                    They were to some extent motivated by the
                                                                                                                                                      the database layer.                              which is expected to conclude by Q1 2016 and marks
                                                                                    acquisition for CIMB Thailand and the merger of
                                                                                                                                                                                                       the final leg of the core banking implementation
                                                                                    PT Bank Lippo and PT Bank Niaga of Indonesia to
                                                                                                                                                                                                       across the ASEAN region.
                                                                                    create CIMB Niaga, which was already the sixth-                  Given its scope, the 1Platform system
                                                                                    largest bank by assets in its country upon inception      was implemented in phases, by each country in
                                                                                    (and currently the fifth).                                succession. CIMB Thailand and CIMB Singapore             Key Performance
                                                                                            It was unsurprising that CIMB Group               were first to undergo this overhaul. The Group’s         Indicators
                                                                                    commissioned a vendor whose geographic coverage           relatively small business footprint in these countries   As of 2014, CIMB Group has achieved 80% system
                                                                                    and competency aligned with its own. Silverlake           meant that both were ideal candidates for a pilot,       and process commonality across all holdings
Bangkok, Thailand: The 1Platform system was first implemented at CIMB
Thailand and CIMB Singapore.The Group’s relatively small business footprint         Axis, which already had a tried-and-tested,               such that any risk, be it in operations, service         affected by the 1Platform implementation. The
in these countries meant that both were ideal candidates for a pilot.               regionally viable solution, was contracted for this       disruptions, or in the integrity of the system itself,   dividends reaped from the new core banking system

                                                                     16                                                                                                                                           17
25 years
                                                                                                                                                                                                                                          of Digital
                                                                                                                                                                                                                                       Transformation

                                                                                                              Looking into the Future                                     financial enhancement for the entire region. With
CIMB Group expects the potential benefits of the 1Platform core banking system                                CIMB Group expects the potential benefits of                1Platform’s technological and business synergies
                                                                                                              the 1Platform core banking system to become                 in hand, CIMB Group will emerge as a favored
to become more evident in light of recent developments in the region. As the                                  more evident in light of recent developments in             candidate to support such an initiative.
ASEAN Economic Community draws closer to formation, the industry has begun                                    the region. As the ASEAN Economic Community                        Additionally, CIMB Group has also alluded
heeding the potential for “qualified regional banking” licenses to be issued.                                 (AEC) draws closer to formation, the industry               to intentions of capitalizing on the greater regional
                                                                                                              has begun heeding the potential for “qualified              data transparency proposed by the AEC. While the
are two-fold, encompassing benefits for internal              Benefits for customers and external             regional banking” licenses to be issued – banks             1Platform architecture can already leverage on
and external stakeholders. Within the bank, the         stakeholders include:                                 that conform to a set of stricter capital adequacy          multi-jurisdictional data, being given the regulatory
streamlined core banking system, complemented                                                                 and business performance measure may soon                   greenlight and putting this into practice would
by existing MDM disciplines have allowed the                 • Standardization of region-wide front-end       be permitted by regulators of participating                 make CIMB Group, an already formidable super-
bank to launch both its commoditized and more                  best practices leading to the delivery of      nations to operate with greater freedom across              regional player, well-positioned to realize its pan-
sophisticated financial products with minimal                  consistent service experiences and near-       all countries, with the goal of collaborative               ASEAN “megabank” ambitions.
backend disruptions.                                           universal availability of product functions
                                                               regardless of geography;
The implications of this point alone are diverse:
                                                             • Ability for the bank to match transactions
                                                               across all product systems to a customer
      • Advanced parameterization rules permit
                                                               though a central customer information
        more diverse, country-specific operation
                                                               file (CIF), essentially enabling a true
        and risk conditions to be captured, leading
                                                               “single customer view” that can recognize
        to a safer, broader extension of straight-
                                                               and reward client relationships more
        through-processing capabilities across
                                                               appropriately (in practice, for example,
        multiple business lines;
                                                               a customer’s credit limit can be based
      • Automatic product calibrations and/or                  on aggregated collaterals, and interest
        transfer can be conducted to accommodate               becomes charged on aggregated utilized
        individual customer lifecycle transitions;             limits);
      • Automatic fund reconciliations for bank-             • Enhanced recognition of inducements and
        to-customer (B2C), interbank and intra-                favorable customer interaction patterns,
        bank (treasury), including calculations and            leading to more bespoke product bundling
        transaction documentation;                             with lower cost and better incentives;
      • Expedited application development and                • Improved Group-wide data capture accuracy
        rollout regimes on the regional core                   via using e-forms and paperless client
        infrastructure, leading to fewer incidences            documentation; and
        of system versioning and technological
                                                             • Branch rationalization, where client
        discrepancies;
                                                               accounts are now branch-agnostic, thus
      • Support tracking and monitoring syndicated             allowing them to greater flexibility in
        loans as lead arranger and/or participating            conducting interactions otherwise limited to
        bank;                                                  a ‘home branch’.
      • Accelerated time-to-market on a product
        level is enhanced by much faster delivery
        times on a channel level, through branch
        and digital touch point process automations;
        and
      • Overall cumulative benefits valued at a total
        of MYR1.5 billion (US$418 million) over the
        course of 10 years from going live.
                                                                                                                                                                                                                                  This Silverlake Axis-
                                                                                                                                                                                                                                  sponsored IDC case study
                                                                                                                                                                                                                                  (IDC #AP7919018X) was first
                                                                                                                                                                                                                                  published in February 2015
                                                                                                              Jakarta, Indonesia: Silverlake Axis’ 1Platform architecture is able to leverage on multi-jurisdictional data to     and republished here with
                                                                                                              achieve its ASEAN “megabank” ambitions.                                                                             permission.

                                         18                                                                                                                                            19
I D C Case Study

                                                                                                                                 25 years
                                                                                                                                of Digital
                        a Truly World-Class Core Banking System                                                              Transformation

                        OCBC Bank
                        by Michael Araneta and Cyrus Daruwala

                        OCBC is Singapore’s longest established local
                        bank, formed in 1932 from the merger of three                          Solution
                        local banks, the oldest of which was founded in                        Snapshot
                        1912. It is presently the second largest financial
                        services group in Southeast Asia by assets and                           Organization
                        one of the world’s most highly-rated banks, with                       OCBC Bank
                        an Aa1 rating from Moody’s. OCBC was also
                                                                                                 Operational Challenges
                        recently ranked by Bloomberg Markets as the
                                                                                               A technology refresh that aligns with the
                        world’s strongest bank, an accolade that holds a                       bank’s transformational New Horizon vision;
                        lot of credibility given the current financial market                  to improve product-to-market, to improve
                        turmoil.                                                               synergies within the Group, and increase
                             The bank’s consumer, business, investment                         cross-sell.
                        banking and other specialist financial services
                                                                                                 Solution
                        solutions are delivered through an extensive global                    Continued deployment and upkeep of
                        network of over 500 branches and representative                        Silverlake Axis Integrated Banking Solution
                        offices in 15 countries and territories, including                     (SIBS) as the bank’s core banking platform.
                        more than 400 branches and offices in Indonesia
                        operated by its subsidiary, Bank OCBC NISP.                              Length of relationship
                                                                                               Since 1994 in Malaysia and since 2001 in
                                           OCBC’s subsidiary, Great Eastern Holdings,          Singapore
                                    is the largest insurance group in Singapore and
                                    Malaysia, while asset management subsidiary, Lion            Benefit
                                    Global Investors, prides itself as one of the largest      Quicker time and lower cost to market in
                                    private sector asset management companies in               terms of rolling out innovative best-in-class
                                    Southeast Asia. Its private banking services are           products and capabilities in Singapore,
                                    provided by subsidiary Bank of Singapore, which            Malaysia and the rest of the region. OCBC
                                    ranks among the top 5 global private banks in Asia.        has become one of the most prolific sources
                                           With a dominant presence in both the                of channel, product, and process innovation
                                    consumer and business banking segments in                  in the Asia/Pacific region.
                                    Singapore and Malaysia, OCBC is among the core
                                    bancassurance providers in Singapore and features
                                    as one of the top players in unit trust distribution,   and systems at that time were rigid, and it took a
                                    home loans, personal credit, small and medium-          long time (and an army of programmers) to roll out
                                    sized enterprises market and the Singapore Dollar       new products and services, thus retarding time to
                                    capital market.                                         market and escalating operating costs. Then, ongoing
                                           During the late 1990s and the early 2000s,       maintenance also continued to weigh down the bank,
                                    OCBC Group quadrupled in assets and total               contributing to recurring expenses and reliability
                                    customers and simultaneously, in the various            issues. All these were in turn, directly affecting the
                                    applications and solutions that it has acquired over    bank’s efficiency and cost-to-income ratio.
                                    the years.                                                     As such, a technological transformation and
                                           While OCBC evaded catastrophic systems           refresh was in order, not only to support OCBC’s
                                    failures that seemed to have plagued some of its        New Horizon strategy but to assist the bank in
                                    peers, it was accepted bank-wide that its solutions     gaining sustainable competitive advantage by

                   20                                                       21
25 years
                                                                                                                                                                                                                        of Digital
                                                                                                                                                                                                                     Transformation

            delivering on a differentiated customer experience,       and deliver innovative products to customers with a     of Group Operations and Technology, felt that it was   channels, CRM, branches, workflow imagining,
            deepen its business presence in Singapore, and            shorter turnaround time.                                more crucial to ensure that there was an excellent     risk management, data warehousing processes
            craft further inroads into the rest of the region. This          IBM and Silverlake Axis have hitherto            integration of the core banking system with all        and requirements, and took stock of its existing
            would for instance, equip the institution to better       served OCBC’s technological requirements well,          incumbent working systems internally, rather than      technology portfolio, emerging business demands,
            expand distribution capabilities in Malaysia and          effectively facilitating the account, offering post-    to plug-and-play the newest best-of-breed disparate    and the key implementations or refresh required.
            capture market shares within the Islamic banking          implementation support and continually improving        applications and expect these to elevate the bank’s    Following this extensive study, OCBC concluded
            and Takaful insurance markets, grow its burgeoning        on its service quality. As such, the bank did not see   technology platform.                                   that the SIBS and IBM partnership had continued
            businesses across Greater China, and build its            the need to reinvent the wheel and invest in any              To this end, OCBC conducted a holistic           to integrate well with all client fronting systems
            private banking business through Bank of Singapore.       massive core banking system overhaul as part of its     internal study to revisit its technology platform      (the Internet, branch, ATM and mobile distribution
                   A technology refresh would also work to            latest New Horizon strategy. Instead, OCBC’s Head       in 2008-2009, where it analyzed its core banking,      channels), and provided for the bank’s evolving
            better harness aggregated synergies and increase
            cross-sell and customer referrals among the
            various entities within the Group, including OCBC           OCBC was the first to pioneer a mobile banking
            Singapore, OCBC Malaysia, OCBC Al Amin, Bank                application to customers via the Apple iPad and
                                                                        iPhone devices in this part of the region.
            OCBC NISP, Great Eastern Holdings, and OCBC
            Securities.

            The Solution
          OCBC has been a client of IBM and Silverlake Axis
          since 1994 in Malaysia and since 2001 in Singapore.
          After an extensive nine month long assessment
          of the various options available in the market, and
          mapping back to OCBC’s long-term, regional, busi-
                                    ness aspirations, OCBC de-
                                    cided on the Silverlake Axis
                                    Integrated Banking Solution
A technology refresh                (SIBS) on an IBM AS400
would also work                     (Power Systems) Platform.
to better harness                   Choosing the right plat-
aggregated synergies                form was a very important
                                    consideration. OCBC knew
and increase cross-
                                    that a typical core banking
sell and customer                   platform has a life-span of 8
referrals among the                 to 12 years. The big invest-
various entities within             ment aside, the solution
the Group, including                and the platform will need
OCBC Singapore, OCBC                to scale as quickly as the
                                    bank’s businesses wanted
Malaysia, OCBC Al Amin, to, and do so in a secure,
Bank OCBC NISP, Great robust and complaint man-
Eastern Holdings, and               ner. Given these ‘mission-
OCBC Securities.                    critical’ requirements, the
                                    Silverlake Axis and IBM
          Power Systems combination stood neck and shoul-
          der above the rest, as testament from as many as 50
          banks in the region that are enjoying the strategic
          alliance of SIBS sitting on a robust and scalable IBM
          AS400 (Power System) platform.
                 The total migration for the Singapore
          operations from the Tandem system to a more
          flexible and cost-effective SIBS was completed in
          November 2001, well on time and within budget,
          allowing the bank the ability to enhance product
          delivery and transaction processing capabilities,

                                                     22                                                                                                             23
Banks that are pushing forward with
      core banking upgrades will have to
        integrate traditionally “noncore”
     areas such as data management and
                       risk management.
                                                                                                                                                                       25 years
                                                                                                                                                                      of Digital
                                                                                                                                                                   Transformation

                                            business requirements, especially as it maintains        given the fact that today’s business environment
                                            a concerted focus on delivering a superior and           is evolving at break-neck speed and industry
                                            differentiated customer experience and invests in        practitioners need to react equally promptly to
                                            design delivery capabilities to gain a sustainable       financial and competitive challenges, new regulatory
                                            competitive advantage.                                   mandates, as well as collaborate with various
                                                   While the SIBS solution framework with            divisions on businesses and technology innovation
                                            IBM Power System remained the most apt system,           and on introducing novel products and services to
                                            OCBC needed to execute a core banking refresh to         remain pertinent in the market place.
                                            enhance some of the existing functionalities. Such
                                            a continued spotlight on technology at the front-end     Essential Guidance
                                            system is crucial to the bank as it pursues its core     Banks that are pushing forward with core banking
                                            focus of providing quality customer products and         upgrades will have to integrate to their program of
                                            experience. The latest core banking modules that         work their organization’s strate-
                                            OCBC continues to employ from the SIBS are the:          gies in traditionally “noncore”
                                            Bank-wide Customer Information Facility (CIF);           areas such as data management
                                            Financing or loans system to handle the complete         and risk management. A truly            From a business
                                            life cycle of loans from the application stage right     modern core banking system will         perspective, OCBC
                                            up to the settlement of these loans; and, Funding        significantly scale up a bank’s
                                            or deposit system to craft new deposit products to       capabilities in these two “hot”
                                                                                                                                             continues to excel in
                                            meet customer needs.                                     areas for 2013 and beyond. A pro-       customer centricity
                                                                                                     gram that neglects these areas          and continues to
                                            The Benefits                                             will create a run-of-the-mill core      offer new locations,
                                            The benefits are principally measureable in qualita-     system and represent a missed           new channels, new
                                            tive terms, with OCBC expecting to enjoy operational     opportunity for real banking            products and new
                                            efficiencies, and quicker time and lower cost to mar-    modernization.
                                            ket in terms of rolling out innovative best-in-class            Core banking vendors such
                                                                                                                                             services to both
                                            products and capabilities in Singapore, Malaysia and     as Silverlake Axis, with partners       its consumer and
                                            the rest of the region. The SIBS continues to serve      IBM, have responded and have            corporate customers.
                                            its intended purpose by enabling the bank to service     come up with propositions in
                                            increasingly capricious and challenging customers        these same areas of risk and data/analytics — and
                                            better and faster than competitors. For instance,        others as well, although some of these “others”
                                            this is illustrated by OCBC enjoying a first mover       like social media or peer-to-peer functionalities
                                            advantage and appearing as technology innovators         can prove to be more nice-to-have factors in
                                            by being the first to pioneer a mobile banking ap-       the meantime. Banks need to understand what
                                            plication to customers via the Apple iPad and iPhone     exactly their current and alternative vendors have
                                            devices in this part of the region.                      to offer in these new areas and how these fit in
                                                    From a business perspective, OCBC continues      the vendors’ view of what a “new core system” is.
                                            to excel in customer centricity and continues to offer   Furthermore, how a vendor addresses the “what
                                            new locations, new channels, new products and            is your ‘new’ core banking vision” question will
                                            new services to both its consumer and corporate          help the bank in determining whether the vendor
                                            customers. From a technology perspective, they           will fall victim to the supposed consolidation of the
                                            evolve, renew and build upon new capabilities to         vendor landscape.
                                            stay relevant to business demands as it forges                  Finally, while cost blowouts and timeline
                                            ahead in the financial industry — all the while being    extensions are common issues in core banking
                                            supported by proficient partners — Silverlake Axis       projects, they will become more pertinent as core
                                            and IBM.                                                 banking projects regain momentum in Asia/Pacific.
                                                    Beyond the ongoing core banking                  Projects will compete for skilled and experienced     This is an excerpt from a
                                            implementation or refresh, the near to medium            resources for systems architecture and core banking Silverlake Axis-sponsored
                                                                                                                                                           IDC case study (IDC#AP
                                            term would see the operational and technology            implementation, ultimately making core banking        #AP772602W), “The Tale of
                                            teams focusing on its roadmap to align technology        more painful than it should be. However, it is the    Two Super-Regional Banks
                                                                                                                                                           and Their Core Banking
                                            with business and on reviewing these plans on an         adherence to the old but still relevant principles of Transformation,” published
                                                                                                                                                           in September 2013, and
                                            ongoing basis to ensure that internal strategies         project management that will keep banks on the        republished here with
                                            are continually in sync. This is the bare necessity      path to success.                                      permission.

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