ibs news
IBS Journal March 2015
Macquarie Bank reports on multi-million SAP core banking project
Australia-based Macquarie Bank has reached the first milestone of its five- year, AU$250 million ($197 million) core banking software transformation project. The bank is replacing a range of disparate back office platforms with the SAP for Banking solution, which comprises the Deposits Management and Loans Management systems. Accenture is the delivery partner. Macquarie is now in an internal
model was to supplement existing platforms with layers on top for ser- vices such as apps. Macquarie Bank is already on the
pilot stage for the first component of the project, which will support the bank’s new business line – transaction accounts – before the full launch later this year. In the later phases, the existing prod- ucts across the entire loan and deposit portfolio of Macquarie Bank will be moved onto SAP for Banking, as well as nearly one million clients. Regulatory reporting will also be supported by the new platform. Greg Ward, group head of banking and financial services at Macquarie, explained the reasons for a phased migration approach to investors during an operation- al briefing in mid-February. ‘The reason we have done this is because it tests a lot of the capabilities of the system. The real-time capabilities, for example, will become so important for clients but also in the mind of the regulators,’ he said. Ward added that the transformation
is going so well that he is confident that it might be wrapped up ahead of the five- year timescale previously outlined. ‘We have delivered the entire infrastructure and now we have the transaction account in pilot,’ he said. ‘It’s going really well, we might be able to complete this in four years.’ Another area the bank has earmarked
for further investment is on the digital side. Ward explained that: ‘We don’t have a branch network, so the fact consumers are more and more engaging through these channels means we need a branch net- work less.’ Australia has been a hub of activity
on the core banking front, with the major banks such as Commonwealth Bank of Aus- tralia (CBA), National Australia Bank (NAB) and Westpac carrying out system modern- isations with varying degrees of success
Macquarie Bank HQ, Sydney ©Mal Booth, Flickr
and completion. In this sense, Macquarie is a relatively late mover, having signed with SAP at the end of 2013, several months after CBA had gone live with its multi-year implementation with the same vendor. The bank was thought to have been sceptical towards following its rivals by overhauling its core system, supported by comments from Stephen Dunn, Macquarie’s former head of wealth management technology, who said in 2012 that core system reno- vations were ‘old school’, and that the best
customer list of a number of banking software vendors. Misys supplies its syndicated lending system, Loan- IQ, and Calypso supports the bank’s treasury and capital markets activi- ties. GBST’s Syn is used for the securi- ties operations. On the wealth man- agement side, Simcorp Dimension is its long-standing back office system. Macquarie’s wealth management
activities have been the focus of scruti- ny from the regulator, Australian Securi- ties and Investments Commission (ASIC), and in 2013 the bank was slapped with an ‘enforceable undertaking’ to improve its systems and processes after accusations of misclassification of clients and incorrect paperwork. The bank spent AU$49 million on the renovation, which was finalised ear- lier this year after being signed off by an independent auditor, KPMG.
IN BRIEF
The UK banking start-up, Starling Bank, is looking for a new management team, fol- lowing the departure of a host of key members. Unveiled as a ‘challenger bank’ last year, the venture was set to be a digital banking player, offering current accounts to smartphone users, with value-added services such as the ability to monitor spend- ing on various items, such as groceries and clothing, and enabling customers to turn their cards on and off with a touch of the screen. It was hoping to launch later in 2015. The leadership team consisted of CEO, Anne Boden (ex-Allied Irish Banks COO);
CTO, Tom Blomfield (who was behind GoCardless, a start-up aiming at making direct debits accessible to individuals); CFO, Gary Dolman (ex-ABN Amro); CRO, Paul Rippon (ex-Allied Irish Banks); and chief customer officer, John Bates. All these individuals, except for Boden, have left the bank, according to a Financial Times report. Boden insisted that Starling will continue and that ‘huge progress’ has been
made on preparing the regulatory submission for the banking licence and also on the technology front. For the latter, the bank opted to build a solution under its own steam, from scratch. According to the FT report, Starling has been struggling with fundraising, after its
key investor, Route 66 Ventures, discovered that the bank’s team planned to spend £1 million on consultants and advertisers (of the initial £3-4 million). Such high fees were partly attributed to the in-house technology route of Starling (whilst other hopefuls have opted for third party packages). It is believed that the ex-Starling team is now pondering a rival venture.
© IBS Intelligence 2015
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