25 years of Digital transformation - Silverlake Axis
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25 years of Digital Transformation Research Insights by
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
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’ 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
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
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
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.
10 11
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
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
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 1725 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 19I 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 2125 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 23Banks 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.
24 25You can also read
