Standard Bank embarks on software transformation drive
Standard Bank is the first bank in Africa to implement core banking systems SAP and Finacle, amid ever-increasing pressures to consolidate client data.
Standard Bank is spending ZAR21 billion ($1.65 billion) to roll out new software platforms, as competition between lenders for clients hots up.
The African lender is implementing SAP in South Africa, and Finacle throughout its banking network across the rest of the continent.
Our transformation will facilitate a far better foundation for competing in a digital environment
Within a financial services context, enterprise resource planning (ERP) software such as SAP can provide bankers with universal access to customer information and data through a single repository.
Finacle can integrate entire core banking systems – e-banking, payments, treasury, liquidity management and wealth management – into one online platform.
Ben Kruger, co-CEO at Standard Bank, says the group will spend up to ZAR21.5 billion between 2012 and 2017 in implementing SAP and Finacle to its African operations.
“Looking at how much we have spent – ZAR6.5 billion for the rest of Africa and ZAR15 billion in South Africa – we expect an amortization of between ZAR2 billion and ZAR3 billion in the systems lifetime,” he says.
Kruger says Standard Bank will be establishing Finacle throughout its Africa business, while SAP will be introduced in South Africa only, due to the latter's deeper and more sophisticated market.
A slew of African banks has established partnerships with mobile providers in recent years to tap into the huge unbanked population throughout the region, cut costs associated with building a physical branch network, and to provide a one-stop shop for banking services through mobile devices.
Banks including Equity Bank and Kenya Commercial Bank in Kenya, and Diamond Bank in Nigeria are among the growing number to develop relationships with mobile carriers. Deposits, transactions, payments and applying for loans are some of the products on offer through mobile banking platforms.
ERP software can be a boon to banks as it integrates all information on clients, employees and the bank itself
Enrico Camerinelli, Aite Group
Standard Bank, Africa’s largest bank in terms of assets, states it is taking technological drive one step further.
“Our transformation [to SAP and Finacle] will facilitate a far better foundation for competing in a digital environment and meeting customers increasing demands and expectations in a fast and efficient manner,” says Kruger.
Several major customers of Finacle include Bank of India, Nadra Bank of Ukraine, ICICI Bank of India and Al Hilal Bank of the United Arab Emirates. HSBC, Barclays, Nationwide, Citigroup, Société Générale and Deutsche Bank are among those that have implemented SAP into their networks.
“We are migrating all our African franchises with Bankmaster deployments [an older, modular banking system] to Finacle by the end of 2016,” says Kruger. "At the same time, in South Africa we are deploying SAP in various stages. Currently [the latter] has more than seven million personal customers live on the system, with the programme expected to be fully rolled out by 2017."
Enrico Camerinelli, senior EMEA analyst at Aite Group, a technology research house, says: "ERP software, such as SAP, can be a boon to banks as it integrates all information on clients, employees and the bank itself throughout branch networks into one accessible database.
"It's a system that builds bridges internally, making things more streamlined for banks and their clients."
He adds: “In a new digital world, you need to be able to do this seamlessly online through processes that can be accessed by all customers anywhere. The technology that you require to do this efficiently and sustainably and at scale is different to what banks implemented 30 to 40 years ago and are still present in legacy systems throughout the region and beyond."
Kruger concludes: “To cater for social, mobile, cloud and the internet of things with a strong focus on big data requires modern platforms. SAP and Finacle will help us on this journey and strengthen our competitive position in many markets."