Tài liệu Overcoming the Challenges of Modernizing Core Banking Systems docx

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

Agenda
•
Introduction
•
Key Questions
–
Why Change
–
Selection Criteria
•
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 -
Overview
•
The World Bank’s initiative to modernize
the Vietnam Banking Industry
•
Vietnam is still largely unbanked
–
45% of money in cash
–
>50% of local business transactions done
outside the banking system
–

Only 1.3 Million Bank Accounts

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!
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
Costs
FinancialNon- Financial
Benefits
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
Entry to new market segment
Better positioned to
grow
Better customer service
Costs

FinancialNon- Financial
Benefits
Sample
Benefits

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
Costs
FinancialNon- Financial
Benefits

Sample
Costs -Benefits

How do we
choose?
Criteria for
Selection of Core
Banking
Solutions