IBS Journal March 2015


Avaloq goes public on Isbank core banking system deal


As IBS exclusively reported last year, the German subsidiary of Turkish banking group, Isbank, is rolling out Avaloq Bank- ing Suite from Avaloq for its core software renovation. Now the vendor has gone on the record about the deal (coincidentally, this came straight after its rival Temenos announced winning the Julius Baer con- tract, where Avaloq was the other main contender, see front page). Isbank is the first retail bank in Germa-


ny to sign for Avaloq Banking Suite. Klaus Rausch, general manager of Central and Eastern Europe at Avaloq, says that Isbank ‘required standardised, centralised pro- cesses to ensure consistency’. The system will cover front to back office operations at Isbank, replacing legacy software, IBBA (it stems from a Belgian vendor, Finance Technology, which now resides with IBM Belgium). It will run from a central back office in Frankfurt, where the bank’s HQ is based, and will span Isbank’s operations across Europe, in a multi-site set-up. ‘The single system will improve data quali- ty and consolidation,’ he states. The first phase will cover Germany, France, Swit- zerland and the Netherlands. The bank also has an operation in Bulgaria, which is expected to be added at a later stage. In parallel, the bank is also


Klaus Rausch, Avaloq


roll-out has been concluded, having ‘ensured that we are on track with no anticipated gaps’, says Rausch. The design and analysis phase has just commenced, which will be followed by implementation, with the go-live penned for early 2016. ‘At Avaloq, we pride ourselves on a 100 per cent success rate in the implementation of our solutions,’ he proclaims. ‘Avaloq Banking Suite has been ful-


ly localised for Germany, with complete compliance for any regulatory, tax and market requirements,’ Rausch says. It is worth noting that many internation- al vendors find the local requirements to be a major stumbling block due to their complexity, and as a rule, bid with third party niche applications alongside their core offering. This was the case, for exam- ple, with Avaloq’s main competitor for the Isbank deal, Infosys. Its core system, Finacle, was offered bundled with locally developed regulatory reporting software. Avaloq already has presence in the


implementing a new trade finance solu- tion, Doka from Surecomp. The core system selection was carried out with the help of a UK-based consul- tancy firm, Sofgen. A pre-project phase for the Avaloq


IN BRIEF


Aktia Bank’s end-of-year results reveal that its core banking system overhaul with Temenos is going to require more investment than originally anticipated. It was esti- mated that the system conversion would require €30 million, but it has now emerged that another €10 million is required, ‘due to higher costs for testing and longer paral- lel operation of the new and the existing banking systems’, according to the bank. The project has recently entered the testing stage, and the ‘big bang’ go-live is


penned for Q4 this year. T24 will be supplied on a hosted basis, replacing the bank’s legacy IT set-up (originally built by domestic vendor, Samlink, for the country’s sav- ings banks). Temenos’ T24 is expected to save Aktia ‘€5 million in IT costs alone’, with ‘process


improvements gradually materialising in 2016’. The bank embarked on the core renovation in November 2013, and by the end of


2014 its investment in the project stood at €24.3 million. The bank’s operating profit for 2014 stood at €68.3 million. Aktia is headquartered in Helsinki, and has 60 branches and 350,000 clients


across Finland.


country via a joint venture with a local private bank, Quirin Bank. The joint ven- ture, called Avaloq Sourcing, was set up in spring 2013 to offer BPO services to Ger- man private banks, based on Avaloq’s core system. Quirin Bank and four others are involved at this stage, as they are convert- ing from a domestic system, Itrexs (which is now also in Avaloq’s hands as it acquired its developer, Höll Computer and Soft- ware, in late 2012). The conversion project is now ‘in its final stage’, says Rausch. The five participating banks will go live ‘simul- taneously in a few months’. It would seem the project is behind schedule, as the orig- inal plan was to complete the migration by the end of 2014. There is also another taker of the


Avaloq Sourcing services, BHF-Bank, which came on board later, and is working towards a 2016 go-live. ‘Our target markets include retail, pri-


vate and universal banks,’ Rausch states. ‘With our BPO offering, we are also attract- ing smaller private banks – this opens up a new segment for us.’ He adds that Avaloq has over 150 employees in Germany and a network of six partners with almost 100 Avaloq specialists.


12 © IBS Intelligence 2015 www.ibsintelligence.com


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