With 37 domestic banks and a host of new digital-only players entering the scene, Taiwan is one of the most crowded banking markets in Asia. So how do incumbent financial service providers protect their hard-won market share and increase their profitability? For Bank SinoPac, digital transformation held the answer, helping the mid-sized player to punch above its weight and win 3.71 million customers.
Back in 2009, Bank SinoPac developed ambitious plans to expand internationally while scaling its domestic operations. To achieve its growth goals the bank realized it would have to overhaul its legacy core banking systems which were rigid, outdated and limited the potential for innovation. These systems were based on proprietary mainframe technology that was driving IT costs higher and higher. It was time for a dynamic new strategy.
First steps on the growth journey
As Bank SinoPac kicked off the selection process for its new core platform, it knew that only a best-in-class solution from a proven market leader would do the job. After all, replacing the systems that manage more than five million customer accounts represented the equivalent of trying to change all four engines of an Airbus 360 while in mid-flight. In other words, it was an enormous undertaking. How could the bank achieve a seamless changeover process and ensure it lost no passengers along the way? After a detailed assessment of leading vendors, Bank SinoPac found the ideal solution: Temenos Transact. The bank decided to implement the Temenos core solution to support its domestic operations in Taiwan and its overseas corporate businesses in Hong Kong, China, Macau, Vietnam, and the United States. Running the core software on a Microsoft infrastructure also allowed the bank to end its reliance on its complex, costly mainframe.
Ensuring a safe landing
The deployment process began in August 2009 with Temenos helping Bank SinoPac run multiple phases of testing and analysis before the final ‘Big Bang’ go-live on 16 August 2012. The implementation involved the migration of the customer data for three million users, and the design and configuration of specific business processes and functionality to meet local Taiwanese regulatory requirements.
With the Temenos solution in use across its 129 branches, it did not take long for Bank SinoPac to feel the positive impact of the transformation. Soon after the go-live, the bank was processing 2.4 million transactions each day, with online light funds transfers completed in just 0.37 seconds. Similarly, Bank SinoPac was running close of business (COB) processes 70 percent faster than it had previously while automating many time-consuming, repetitive manual workflows.
Embracing new innovations
The banking sector in the Far East, however, never stands still. New competitive threats and emerging market opportunities meant that by 2019 Bank SinoPac was interested in upgrading its core from the original R10 version of Temenos Transact to the latest R18 release. The bank also aimed to modernize the underlying database, operating system, and servers. The switch to the newer version of the core platform would allow the bank to take even more advantage of improved performance and the latest digital functionality.
Mr. Coolson Shen adds: “Adopting a modernized technology stack, from our database to core platform, has helped us to reduce risk in our IT environment and cut our overall costs. We are no longer reliant on less stable, older systems that will soon approach end-of-support, nor do we have to spend so much on maintenance.”
”One of the most impressive aspects about working with Temenos is that there was a cleat upgrade path mapped out when we first implemented the solution. ”Mr. Coolson Shen, Project Manager
Sailing through the upgrade
Having built up a strong knowledge of their core systems over the past seven years, Bank SinoPac took the lead on the upgrade project, only calling on expert support services from Temenos when it encountered obstacles. While moving to the R18 version of Temenos Transact, the bank also upgraded to new versions of Microsoft SQL Server and Windows, as well as modernizing its server and storage landscape.
Mr. Shen continues: “We went live on the new version after just ten months, which was an excellent result and right on our schedule. Moving through so many releases meant that it was a complex and challenging project, but working with the expert resources provided by Temenos kept things moving forwards and ensured a successful outcome. We have a close working relationship built on mutual trust and collaboration.”
Transforming internal operations
With the completion of the platform upgrade, Bank SinoPac achieved its goal of significantly reducing the time required to complete COB processes. Previously, these workflows took four and a half hours to complete. Now, with the R18 version of Temenos Transact running on the upgraded server infrastructure, Bank SinoPac handles COB tasks in just two hours.
Mr. Shen explains: “The acceleration in our COB processes has been the biggest win for us following the upgrade. With the R18 version, we have reduced the time to complete COB by 56 percent, which represents an exceptional outcome. Our users are no longer tied up with data extraction and have more time to concentrate on valuable tasks, such as identifying opportunities to improve our quality of customer service.
”Adopting a modernized technology stack, from our database to core platform, has helped us to reduce risk in our IT environment and cut our overall costs”Mr. Coolson Shen, Project Manager
Accelerating product innovation
In the next phase of its digital transformation, Bank SinoPac will implement new functionality on the Temenos core platform, including the introduction of updated Arrangement Architecture modules. These steps will enable the bank to develop innovative new products and services while bringing offerings to market faster across its global operations, helping it to continue expanding its customer base.
The Bank Sinopac team is excited to take advantage of access to near-real-time data when it completes phase two of the transformation project. Previously, the bank only had access to information from the previous working day. Soon it will be able to extract more relevant data which will help it to perform more in-depth analytics and make smarter, more timely business decisions.
“Our upgrade of Temenos Transact represents the latest step in a long and profitable partnership. As the banking sector in South-East Asia grows more competitive, Temenos gives us the tools that we need to continue to thrive and deliver a consistently high quality of service to our many customers in Taiwan and beyond.”Mr. Coolson Shen, Project Manager