All banks face similar challenges when undergoing a core banking transformation, including legacy systems over 15 years old, functional gaps, inconsistent data, and limited scalability. There is still a high failure rate of around 50% for these transformations. Case studies of failed transformations provide lessons - one wrong choice like technical infrastructure can lead to failure, as was the case for Oracle FlexCube at Allied Irish Bank. Underestimating requirements, complexities, and changes in scope can also cause costs to double and timelines to extend, as seen with SAP at Commonwealth Bank of Australia. Successful transformations demonstrate best practices like phased implementations, model bank approaches, minimum customization, and ensuring replacement is seen as a business priority.

1. All banks which go for a core banking driven
transformation face similar challenges
Situation Problems Solution Complications
15+ years old systems Functional gaps  Limited knowledge of CBS
 Mainly self developed  Inconsistent data  Build-in business processes
Select Core Banking
Well understood  Different implementation
  Low agility
System as strategic approach
 System functions thinking  Limited compliance
 Parameterization within limits
platform of the future
 Rich in functionality  Limited scalability  New strategic partner
 Product thinking  High maintenance  Adopt, not adapt
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2. There is still a high failure rate of core banking driven transformations
Transformation Transformation
program program
delivered aborted
25 % 25 %
50 %
Transformation
program
delivered
while costs and timeline
doubled or tripled
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3. Failure
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4. Case study Oracle FLEXCUBE, failed implementation at Allied Irish Bank
Scope Plan Challenges Results Learning
 Retail banking  Budget:  Technical  Program One wrong choice,
 Accounts 84 million Euro implementation stopped in 2010 like the technical
 Replacement of  Time: : IBM’s z/DB2  AIB sued Oracle infrastructure, can
legacy retail 3 years platform, which for 84 million lead to a failed
banking platform is not Euro in 2011 program.
 Started in 2007 supported by
 Migrate Oracle/FLEXCU
5,000,000 BE
accounts to  Program
Oracle management
FLEXCUBE shortcomings
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5. Case Study Temenos Globus/T24 at ING,
stopped CBS transformation after three years
Scope Plan Challenges Results Learning
Wholesale banking  Budget:  The requirements  In 2005 the Significant change
 Treasury - were significant program was of scope,
higher than underestimation of
 Lending  Time: stopped citing
anticipated
 Corporate finance 3 years ‘internal complexity and
 Underestimated
 Payments need to meet reasons’ wrong technical
regional, head choice can lead to a
 Cash management
office and country failed program
 Risk management
requirements
 General ledger  Singapore was
the largest branch
 35 Countries in Asia Pacific and
had a ‘wealth of
know-how’ which
 Single view of a was not easy to
corporate customer transfer that
across all countries know-how to
head office
Change of
 Start in 2002 
database
technology during
the
implementation of
the CBS program
from Oracle to
jBase
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6. Case Study SAP at Commonwealth Bank of Australia,
Integration Partner Accenture, Costs double against initial estimation
Scope Plan Challenges Results Learning
 Accounts  Budget:  Increase of Current Change of scale and
 Deposits 580 million $ scale and scope knowledge (Mar scope may lead to
 Loans  Time: of the CBS 2013) on significant cost
 Payments 4 years program  Budget: overruns
 Started in 2008  Acquisition of 1,300 million $
 Replacement of Bank West and  Time: A large SI partner
45 years old St Andrew’s 5+years will not prevent you
legacy IT system  Need for from having costs
landscape significant overruns.
change of lately
renewed access
channels,
again.
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7. Success
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8. Oracle Flexcube at Chinatrust Commercial Bank Taiwan
Description Best Practice Patterns
Phased
Background  Retail and Corporate Bank
Implementation
 210 branches, >70 abroad
 $50 billion assets
Model Bank
Scope  Accounts, payments, trade finance, loans, Implementation
deposits
 Oracle FSS Flexcube Universal Version 10 Socio-Cultural based
Selection of Consultancy
Objectives  Core bank automation across foreign
branches with Headquarter to follow
 Migrate all countries to the same common New Operating
system Model
 Standardize services, improve cost base
and brand loyalty Prepared Business
 Replicate good practice across group Processes
Challenges  Managing the banks expectations Minimum
 Changing the habit of the people in the Customization
bank
 Ensure quality of software customization Communicate the
 Coordinate brand and business strategy replacement as an
over borders business issue
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9. Temenos T24 at Schroders, Switzerland
Description Best Practice Patterns
Background  Private & Corporate Banking
 34 branches in 26 countries BigBangApproach
 CHF 110 billion assets
Scope  Private Banking EstablishedChangeM
 Roll out in 3 countries anagement
 18 months implementation time
 Accounts, Deposits, Payments, Securities
RealPartnership
Objectives  Increase operational efficiency and maximize
synergies within the group
 Migrate all countries to the same common system
PreparedBusinessP
 Improvement of CRM, risk management, and
rocesses
compliance
 Reduction of complex interfaces and decrease the
number of technical and platform skills required BetheReferenceBa
nk
Challenges  Data migration concerning existing silos of
redundant and inconsistent data
 Ensure employees continued cooperation SharedStrategy
within the program
 Ensure a smooth and complete knowledge
transfer Open Communication
 Different tax issues and client reporting concerning Job Cuts
requirements of migrated countries
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10. Accenture Alnova Financial Solutions at BAWAG P.S.K. ,Austria
Description Best Practice Patterns
Background  BAWAG acquired P.S.K.
PhasedImplement
 Retail and corporate banking
ation
 150 branches, > 1,300 post offices
 €45.4 billion assets
Scope  Accounts, deposits, payments, loans, credit Established Change
cards Management
 29 months; in 5 countries
 Alnova Financial Solutions
QualityPeople
Objectives  Reducing the need for large back offices
 Provide online access to all customer- and
product-related information
 Streamline work processes
 Create synergies between IT capabilities
and business goals
 Adapt quickly to new market conditions
Challenges  Adjust business and IT processes
 Migrate all P.S.K. client account data to the
new system
 Achieve a solid post-merger IT platform for
its constituent organizations
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11. SAP Deposits Management & R/3 at MBA Lazard, Argentina
Description Best Practice Patterns
Background 
Be the First
Reference Bank

Scope  SAP – accounting (R/3), client and account
management (Deposits Management)
 Investment banking back office operations
 26 months implementation time
Objectives  To move from being a small local player to
a much larger institution, focused not only
on Argentina but also other central and
south American countries
 Adoption of Basel II
Challenges  Integration requirements, more than 100
interfaces
 Lack of expertise within SAP for its banking
software
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12. Templates
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13. Case study
Scope Plan Challenges Results Learning
 A  A  A  A A
 B  B  B  B B
 C  C  C  C C
D
E
F
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14. CASE
Description Best Practice Patterns
Background 
Best practice

pattern
Scope  A
 B
 C
Objectives  A
 B
 C
Challenges  A
 B
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15. Contact
Frank Schwab’s customers are banks, IT consultancies and
IT Service Providers in Europe and Middle East.
Frank has more than 14 years experience of IT
transformations. He has planned CBS-driven IT
transformations based on SAP, Flexcube, Temenos, OSPlus,
and others in Scandinavia, Middle East, Eastern Europe,
Germany and others.
Until 2009 he was chief architect at Deutsche Bank.
Amongst others he was responsible for the planning of the
IT transformation based on SAP Banking, the set up and (10
years later) the renewal of the Online Banking, the
introduction of Mobile Banking and the set up of the first
German lab for Banking IT. Frank also designed an ASP Core
Banking model based on SAP Banking Services.
Frank.Schwab@imacor.de Frank is a pioneer of Online Banking, Mobile Banking and
Touch Point Banking and a winner of three European Awards
+49 173 670 623 3 in 2009 and 2010 for the New Online Banking, Mobile
Banking and Touch Banking at Q110 - The Deutsche Bank of
Skype: fjschwab the Future.
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