Replacing Core Banking Systems is often described as replacing the engines of an Airbus A380 while in mid-air. An Airbus A380 has 4 engines. A “Big Bang” approach means changing ALL of the engines at the same time. In doing this it’s important that you protect the passengers.
Bank SinoPac headquartered in Taipei, Taiwan was contemplating an unexciting future back in 2009: as a mid-sized player with 3M customers in an overbanked domestic market, it lacked the scale to out muscle competitors. While international expansion offered greater promise, it was constrained by the lack of an affordable overseas technology platform. The bank’s domestic legacy core banking systems were rigid and inflexible and based on expensive proprietary mainframe technology.
Believing in the Courage of Your Convictions
The bank made the decision to perform an extreme makeover in terms of renovating its underlying software and IT operating infrastructure while replacing its core banking systems. You might say replacing the wings as well as the engines.
This decision was made to deliver a future with a sustainable and much lower cost base while at the same time rendering the bank more agile so that it would be better equipped to differentiate its product and customer offers both domestically and overseas.
50% reduction in IT Maintenance Costs
This involved replacing the Bank’s Unisys Core Banking System used for their Taiwan domestic banking business with the Temenos T24 Transact software and ultimately leverage the platform for the bank’s overseas business in China, South-East Asia and the USA. The Bank chose to implement T24 using Microsoft Technology, moving away from both the proprietary Unisys core banking application and the proprietary Unisys Mainframe infrastructure that the systems were running on.
The bank achieved a 50% reduction in IT software and hardware expenditure, a platform futureproofed for domestic and international expansion and the flexibility to continue outperform its competitors by offering innovative products to its customers.
The single customer view enabled the bank to focus on expanding its financial relationship with their retail, SME and corporate customers while improving risk management significantly.
And the bank reduced manual intervention through greater automation enabling many more processes to be executed straight through. The close of business process actually improved by over 65% when compared to the legacy systems that had been replaced,
From an international perspective, the bank has been able to create a standardized target operating model, for products, processes and services thus being able to deliver a consistent experience and efficient operations through the bank’s overseas locations to its corporate customers.
“This transformation will enable Bank SinoPac to save 50% on hardware maintenance fees annually, up to 50% of software maintenance fee over a five-year-investment and provide a higher computation throughout for future business expansion.”Robert Tsai, CIO
Did We Lose Any Passengers?
No we didn’t. The plane landed safely and since then the bank has added many more passengers and flies to more geographies.
The project began in August 2009 and went live for the SinoPac domestic bank on 16th July 2012. During these 3 years, 40% or 15 months was focused on testing, testing and more testing given the “big bang” nature of the Bank’s migration strategy. The Delta Analysis, Design and Build was executed over 21 months, which included 8 months to develop Taiwan-specific business practice, products and regulatory functionality for all products and services delivered by the Bank.
Online light fund transfers now take 0.372 seconds per transaction
The “Big Bang” implementation strategy meant the transformation and roll-out of the business change management strategy for employees across 129 branches while migrating the customer data of 3 million customers, building a single customer view. In addition, the bank migrated 5 million accounts and needed to ensure that the implemented solution could process 2 million transactions a day from day-1.
After the success of the domestic bank going live, the bank moved on to progressively bring their overseas locations on to the platform, one at a time, delivering economies of scale to the bank.
What Did the Bank Implement From Temenos?
SinoPac implemented Temenos T24 Transact for its domestic retail and corporate business, including Trade Finance. The same platform is used to process the Bank’s business in Vietnam, Hong Kong, Macau, Los Angeles and a separate instance of the software resident in China.
Today the Bank has 3,5 million customers and approximately 8 million deposits and loan accounts, processing on average 2,4 million transactions per day.
Temenos T24 Transact is positioned as a headless customer and product engine, integrated with SinoPac’s web services, branch relationship management and teller solution, the Bank’s call center applications and internet and mobile self-service channels. Temenos T24 Transact integrates with approximately 80 other SinoPac applications.
70% reduction in close-of-business cycle times
So What About the Future?
We continue on this journey together as SinoPac begin to upgrade to the latest version of Temenos T24 Transact, R18, to take advantage of the investment in functionality and technology enhancements that have occurred since the bank went live with the software.
“We are placing significant importance on IT to gain a competitive edge. With Temenos T24 Transact we have quickly and efficiently undertaken a core transformation, establishing a modern core banking platform to support our domestic and international growth. Temenos T24 Transact caters to our existing and future needs.”Tina Chiang, President