Core Banking Transformation

Are you ready to bring the core of your business into the next digital age? We’re here to help you.

Do you face challenges when it comes to adapting rapidly to the demands of your clients, the market or your regulator? If you want your organisation to succeed, you’re going to have to apply the right IT strategy to address the need to reduce costs, accelerate time to market, support strategic growth and enable the digital customer journey. Legacy technology and a complex system landscape often prevent you from acting quickly and with the necessary agility when you want to. A transformation of your core banking becomes inevitable. Our core banking transformation services ensure you get the most value out of your transformation and achieve your strategic goals.

Transforming your core – the right way

If you want to accomplish your strategic objectives and compete with fintechs and neo-banks, you’re going to need large-scale core platform transformation. We can help you execute the various key steps of your transformation strategy:

Disrupt and transform

the organisation. This bold move takes on neo-banks and challengers head-on. This will involve becoming a digital native by implementing an IT platform architecture that’s designed and built for digital banking using the latest technology stack. You’ll be using IT solutions that are cloud-native and licensed on a pay-per-use basis.

Replace

the existing core by implementing a new platform from a traditional vendor. We’ll help you work out how to replace your existing core banking system with a traditional “big player”, implementing and customising the latest release to ensure the best fit while staying close to the standard solution.

Redesign

the existing platform, consolidating architecture and digitising step by step. We’ll help you consolidate and digitise your existing ecosystem while keeping your existing core banking solution. This will involve redesigning internal services, integrating service platforms and streamlining processes, thereby increasing efficiency.

Source

the IT platform and related services from an external service provider. We’ll enable you to increase efficiency, reduce costs and benefit from external know-how by leveraging an adequate level of outsourcing (IaaS, PaaS, SaaS) to an external supplier.

Our services

Core Platform Transformation

No matter what transformation strategy you choose, our expertise in core platform transformations enables you to align your business with your IT strategy, and helps you identify gaps and how to close them. Our experience in core platform transformations assures your success throughout the life cycle of your core platforms. From selecting the right vendor in tailormade RFI/RFP processes to migration and cutover services, our team has the right expertise to support you along your transformation journey.

Ecosystem Integration

If you’re looking to expand your product offering or adjust your target operating model by integrating new players into your existing product landscape, we will help you determine your readiness for ecosystem banking and how to differentiate yourself from your new partners. We’ll also help you select the right partner, and together with your IT architects we’ll ensure that the technical integration is a success.

We want to help you become the digital bank you are meant to be.

Core banking transformation stands at the centre of every transformation effort our clients undertake. With our expertise in both the relevant systems and how to run transformations effectively, we at PwC are the right partner to launch your transformation journey

Marc LahmannPartner, Core Platform Transformation Services

Integrating four banks on a joint platform: A merger and integration case study

Banks are under immense pressure to increase profitability. The industry has been pursuing mergers and acquisitions to drive consolidation, strengthen individual banks’ footprint and service offering and achieve synergies. Our Core Platform Technology team has helped banks achieve operational integration, allowing them to rapidly achieve measurable benefits.

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Challenge

Our client, a private-equity-backed European banking group, acquired three banks within three years. Its ambition was to consolidate all four banks, integrating them on a single platform and achieving an operationally merged bank within an ambitious timeframe.

Our client and its subsidiaries ran four different core platforms, and had multiple different companies contracted to provide services (including IT, contact centre, payments and securities settlement). Among the banks’ core systems were standard software and custom software, and both in-house and outsourced core banking operations models. Owing to the variety of business models and services provided, a number of applications needed to be integrated in the target platform.

The core challenge was to mobilise skilled and experienced team members from all the parties involved (including external vendors) and build a team that could work towards a common goal, managing complexities and dependencies on a day-to-day basis.

Solution

Alongside the transaction timeline (signing, closing and legal merger), we planned and executed the operational merger and technical integration. We worked out a migration strategy and scenario in accordance with the transaction milestones. We prepared a detailed integration plan covering all phases from preparation through post-migration.

We set up a project organisation and managed business requirements and dependencies across all workstreams. Our experts drove key workstreams such as loans and collateral management, deposits, treasury, payments, customer securities, finance, risk, compliance and IT, staying close to the business functions to ensure all requirements were in place for the operational merger.

We led and facilitated workshops to create product and account mappings, bringing together functional and technical experts from all parties to prepare a consistent migration of products and services and to ensure products were transferred correctly to the target platform.

We helped run workshops to develop a detailed cutover runbook defining all tasks to be executed before, during and after the cutover to migrate all data while keeping operational disruption and downtime to an absolute minimum. During the migration, we staffed the control room around the clock to manage the cutover and ensure that all checks and reconciliations were performed successfully in the allocated time, that any issues were addressed, and that all client-relevant information was forwarded to the relationship managers and contact centre teams, as well as PR and social media.

Together with our client, we developed a communications strategy to inform and educate clients about any impacts on their products and services, and helped prepare contact centre support material to enable relationship managers and the central contact centre to assist clients with any inquiries they might have before, during and after the operational merger.

We liaised with external vendors, managing dependencies and ensuring that external support kept up with the integration plan.

We set up quality and test management functions to make sure that data migration, application integration, functionalities and migration procedures were thoroughly tested.

Results

Our client aimed to merge all the banks involved quickly to drive efficiency gains and synergies. We helped our them achieve three technical mergers and integrations involving four different banks in a short time. Our team achieved timeframes of approximately 7 to 9 months between the closing of each individual transaction and the respective operational merger.

Through a joint effort we helped our client consolidate and realise significant operational efficiency savings by moving to a single IT platform and operations setup. Along the way, we integrated applications into the IT platform, established multi-brand capabilities, and migrated around 400,000 clients.

We regularly updated top management and the board of directors, and helped them steer the organisation through a time of significant change and complexity.

Our experienced team, hands-on approach and effective leadership helped us meet all the merger milestones as planned with no delays, no significant service disruption and little client attrition, building a bank that is future-ready and has been continuing on a successful growth path ever since.