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Challenges in today's banking environment


Integration is possibly one of the most misused words in Information Technology. Theoretically, the technology now exists to connect many systems (and sub-systems) where every connection is only a small piece of the integration story. True integration concerns the business processes and ensuring that they are as seamless as possible. 


"Banks are amongst the highest consumers of IT, so the real picture is much more complex, mixing old and in some cases leading edge technology across different platforms and diverse applications." (The Banker: The Heart of the Matter) 


As a result, Inter-operatability is in all probability, the single, most significant challenge faced by institutions deploying complex business solutions, particularly in the case of banking solutions for Online Transaction Processing and Decision Support. These solutions are generally comprised of a complex combination of a large number of subsystems. 


A common approach to handling this problem is to obtain the best product in each category from the respective vendors and "integrate" them. However, the subsystems are never truly integrated for a number of reasons such as legacy systems with different hardware platforms and operating systems, various relational back-ends, multiple front-ends and networking architecture to name a few. 


So ultimately complex but inelegant solutions are deployed for such intractable problems, offering inefficient access to heterogeneous data sources. This may represent the only solution for large organizations who cannot write off massive investments. Or so they think! At the end of the day there is a huge cost associated with this approach. This cost is primarily associated with several overheads, particularly HR, since manual intervention is required to complete many processes. The lack of efficiency, rising, maintenance costs and inconclusive market data adds to the already large overheads. 


IT Managers are not willing to accept that yet another third party product will fit their business needs one hundred percent. They are right. Rather, they should choose their new systems carefully considering the following: 


"The architecture and the scope of the system will determine the time required to complete and deploy the system with the desired changes."


Without these considerations, lack of inter-operatability will lead to:

  • Too many segregated solutions

  • results in segregated customer databases

  • multiple sub-systems where generic enhancements across modules are not possible

  • decision support systems very expensive to manage

  • redundancy, insurance and HR costs increase exponentially

  • inability to rapidly deliver products demanded by clients

  • Regional modifications difficult in a decentralized environment

  • Reconciliation problems between disparate systems

  • STP obstacles high success returns low

  • Disparate Risk Management monitoring

  • Operational risks support costs increase geometrically

  • Single vendor solutions not necessarily integrated

  • Integration becomes technology & middleware dependent

  • TOC escalates -particularly too costly for middle tier banks

  • Decentralized solutions for multi entity processing

  • fat clients

  • high server overheads locally


If you are a CEO, CIO, CTO or a senior member of the management, it may be time for you to consider other options. 


































the challenging world of core banking systems


Globalization is exerting tremendous pressure on institutions as large Files enter markets that were traditionally serviced by mid and small sized locally based institutions. The new entrants bring advanced technology and services to these markets and are causing a shift in the local entities' traditional client base. Thus it is imperative for the entrenched market players to evolve and adopt new technologies to help them compete effectively. 


The table below highlights how this shift in technology is being addressed. 






















Source: Deloitte Consulting


Old World


Siloed Business Functions


Strategic Business Unit determines structure & operations of core banking systems


Challenges of cross-selling ratios



Cost reduction often ad hoc with focus on headcount & systems


Little exploration of implications for systems of shared services, distribution alliances & offshore opportunities


Myriad of technology systems & vendor relationship.




New World - hPLUS™


Integrated banking systems & business operations


Bank structured around distribution & manufacturing capabilities


Integrated operations linking pricing & cross-selling opportunities


Cost optimization programs continually on Board agenda



Multi-locational operations linking front office to extensive activities offshore operations


Standardized, flexible systems based on range of best-of-breed suppliers & in-house technology


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