Tài liệu Overcoming the Challenges of Modernizing Core Banking Systems docx

Vietnamese Banking Environment - Overview• Vietnam economy grew 8.4% in 2005 • State’s 10-year Development Plan for the Banking Industry – Adopt international banking and business best p

Overcoming the Challenges of Modernizing Core Banking

Systems

Banking Vietnam, an IDG event

Anselm De Souza

Vice-President, Asia Pacific Sales

System Access Limited, Singapore

17-19 th May 2006, Melia, Hanoi, Vietnam

• Overcoming the challenges

– Key Success Factors

– Case Study – the Vietnam International Bank

Introduction

Key Questions

• Why were Vietnamese banks taking

extended period to roll-out their core

systems

• What were/are the challenges Vietnamese Banks faced when modernizing core

systems?

• Is this situation specific to Vietnam?

• How can we do it better?

Questions to ask

• Should we change? Why?

• How do we choose? What are the criteria?

• How do we prepare for change?

Should we change? Why?

Vietnam Banking

Environment Overview

Vietnamese Banking Environment - Overview

• Vietnam economy grew 8.4% in 2005

• State’s 10-year Development Plan for the Banking Industry

– Adopt international banking and business best practices

– Better corporate governance

– Market-based monetary management

– Modernization of common systems

– Promote Public Trust in the banking system

Vietnamese Banking Environment -

Rationale for Acquiring

New Core Banking

Systems

Rationale for Replacement of Legacy

CBS

• Entry of foreign competition

• Increase Customer Sophistication

• Adoption of international best practices

• Delivery of international banking products

• Faster go to market

• More stringent regulatory requirements

 Time is of the Essence!

Rationale for Replacement of Legacy CBS

Opportunities for growth in the banking sector are so big

that “local speculation in banking shares is running hot and

heavy here on expectations that big foreign banks will buy into smaller local state-owned commercial banks toward the end of the year.”

Asia Times Online, April 19, 2006

Project implementation fees Software license fees Maintenance and support fees System Integration fees Infrastructure costs

Project implementation risk Significant process change Short-term customer service level degradation

Revenue from enhanced products & services Quicker time to market for

new products Lower business operation costs Improved customer retention Reduced manual exception handling Reduced errors

Entry to new market segment Better positioned to

grow Better customer service

Project implementation fees Software license fees Maintenance and support fees System Integration fees Infrastructure costs

Revenue from enhanced products & services Quicker time to market for

new products Lower business operation costs Improved customer retention Reduced manual exception handling Reduced errors

Project implementation risk Significant process change Short-term customer service level degradation

Entry to new market segment Better positioned to

grow Better customer service

How do we choose?

Criteria for Selection of Core Banking

Solutions

Selection Criteria

• Product Functionalities

• Technology & Architecture

• Implementation Track Records

• Local Support & Vendor’s Commitment

• Price

Selection Criteria

• Product Functionalities

– Sufficient Functionality Coverage

• Technology & Architecture

Selection Criteria

• Implementation Track Record

– Global expertise and domain knowledge– Local project implementation experience

Selection Criteria

• Local Support & Vendor’s Commitment

– Tried and tested post-implementation support strategy

– Local Product Support

– Local Office

Multi-dimensional criteria for SW

package evaluation & selection

Functionality

Technology

Architecture

Vendor viability Implementation and support

Total Cost of ownership

Maturity

Reliability

Scalability

Integration with other systems

Support for multiple languages

Interface with desktop tools

…evaluation and summary of findings

2 4

10

2 4 6 8 10

2 4 6 8 10

10

8 10

Functionality

Technology

Architecture Implementation

and support

Total Cost of ownership

How to over come these challenges?

Note on Pricing

“Project delays are very costly The opportunity

costs of any delays usually erode any

benefits of the initially competitive financial

Mr Trinh Van Tuan, VIB Chairman

Key success factors

1 Internal Commitment

– Top down support

– Adequate Resourcing

• 20-30 staff typically involved in project implementation

whilst managing day to day activities

– Strategic HR changes

• Talent spotting

• Redesigning jobs & roles

– Business Process Re-engineering

Key success factors

– Management commitment

– Adequate resourcing & project management– Partner strategy (one team, one goal)

• Bank staff & Vendor integration

• Culture and language

Case Study:

Vietnam International Bank

About VIB

 Vietnam International Bank (VIB)

 Started in September 18, 1996 with an initial

paid-up capital of 50 billion VNDs

 At the beginning of 2005, chartered capital had

amounted to 325 billion VNDs

 5 th Largest Joint Stock Bank in Vietnam

 Goal to achieve very challenging growth targets for

the next 10 years

“Our bank has set out a plan to expand the current branch network of 34 branches, grow total assets, grow the number of customers, and widen range of products and services This plan will ensure VIB attains a balanced portfolio of assets to strengthen the banks financial stability, a diversified sources of income as it achieves its growth targets”

The Major Objectives

• Rigid & Short Implementation Time Frame

• “Big Bang”, simultaneous Live sites

VIB Selection Criteria

• Legacy Core Banking System

– Aging technology that cannot sustain growth

• VIB’s Stringent Selection Criteria

– Rich Functionality and Flexibility

– Robust Technical Specifications

– Operational Compatibility

– Technical Scalability

– Professional Service Standards and Management Support

Other Key Issues Faced

How the eventual vendor was chosen

• Selected from among several international banking vendors including the Top 5

global solution providers

• Track record of successful project delivery On-Time and On-Budget.

• Domain Knowledge and Understanding of VIB’s business

What VIB looked for in a partner

“We are a bank, and project delays are very

costly The opportunity costs of any delays

usually erode any benefits of the initially

competitive financial proposition and more We want a partner who will deliver on their promise.

After thorough reference checks and site visits, the VIB team found that customers of System Access spoke highly of the company’s immense desire to work closely with the bank and deliver

in the given timeline.”

– Introduction of Factory Acceptance Test– Full onsite support

How Partner rose to the occasion

• Domain knowledge and Expertise to

provide a Localized International CBS

product

– Flexibility of the product that is a readily

customizable international product suitable for Vietnam banks

– Complete understanding of the issues and

challenges that arose– Hurdled the cultural and language barriers

– Solid Project management

Successful Live Operations!

• On 14th April 2006, SYMBOLS went LIVE at VIB

• In only 10 months10 months, VIB is now serving

– More than 70,000 customers

– Network of 34 branches, and

– Covering more than 2000 KM throughout Vietnam

using SYMBOLS CBS.

• VIB is now set to Expand and Acquire an even

Bigger Domestic Customer Market share

• VIB is now ready to compete aggressively against bigger foreign banks when they enter Vietnam

About Speaker

Anselm de Souza

• Vice President, Sales Asia Pacific

– 22 working experience in Financial Services Industry

– Senior Regional Positions in:

• Callatay & Wouters (Core & Private banking)

• CashTech (Cash management)

System Access At A Glance

Development & Implementation

Beijing, Shanghai, Hanoi, Tokyo, Kuala

Lumpur(x2), Bangladesh, Bratislava, Dubai,

Manila, Prague, and Karachi

Pacific, Middle East, Africa and Europe

Pincus & Private Investors