IBS Journal May 2015


Kotak Mahindra Bank and ING Vysya Bank merge


Kotak Mahindra Bank and ING Vysya Bank have received the necessary approvals from India’s central bank to merge, and the unification of the two entities under the Kotak Mahindra brand is already in full swing. The $2.5 billion acquisition of ING


Vysya, announced last November, is set to create India’s fourth largest lender in the private sector, with ten million customers and 1250+ branches. It will also give Kotak Mahindra a strong presence in the south of the country, which it lacked previously. The question remains, however, over


the underlying technology of the unified bank. Kotak Mahindra has been using Info- sys’ Finacle core banking system for the last five years or so (the decision to switch from Oracle FSS’s Flexcube to Finacle was taken in 2009). It continues to be listed by Oracle FSS as a user of Flexcube for private banking operations. It also runs the Thom- son Reuters-derived KTP platform (now residing with Misys) for treasury and capital markets. Meanwhile, ING Vysya is a long-stand- ing (and the first in the country) user of FIS’s Profile core offering, and although it has not always been a smooth relationship,


Mumbai, home of Kotak Mahindra ©Sunil Krishnan, Flickr


the bank was quite complimentary about the vendor and the established partner- ship when speaking to IBS last year. It also paved the way for further core banking software deals for FIS in the country, such as with Bandhan Financial Services, Bhara- tiya Mahila Bank and Shivalik Mercantile Co-operative Bank. In 2013/4, ING Vysya went through


an extensive IT modernisation exercise, including a major upgrade of Profile, a new


data centre, and launching a mobile/smart- phone banking solution. The bank’s CIO at the time, C V G Prasad, stated that the bank’s IT spend was ‘viewed as investment, not cost’, and hence it was ‘all strategic in nature’. According to Jaimin Bhatt, president


and group CFO at Kotak Mahindra Bank, the decision regarding which core system to use going forward has not been taken yet.


Union Bank of Nigeria live with Flexcube 12.0 core banking system


Union Bank of Nigeria has gone live with an upgraded core banking system, Ora- cle FSS’s Flexcube release 12.0. However, as the system is now being stabilised, the bank warns its customers on its website that there might be ‘some downtime’ due to an ‘ongoing technology upgrade’. Over the last few years, the bank has carried out nearly 70 technology-related projects, according to the CIO, Yomi Akinade. The project’s roots go back to 2009, when the bank fell under the sanctions of the regulator, as part of a sweeping bank- ing sector reform. Central Bank of Nigeria concluded that a large number of banks in the country – Union Bank being one of them – suffered from over-indebtedness, exposure to non-performing assets and


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corporate governance problems. Union Bank was put on a watch-list and given a two-year timeframe to recapitalise and put its house in order. Two years on, the bank was known


to be looking at various IT modernisation routes. Its legacy solution, Flexcube, was deemed outdated and not capable of sup- porting the bank’s growth plans. Akinade described the system at the time as inade- quate and flawed. The decision was taken to keep work-


ing with Oracle FSS, but to re-implement Flexcube. According to Akinade, an up-to- date, centralised version of the system would meet the bank’s business require- ments and improve operations across the board, as well as improve the service


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delivery and help the bank compete in the marketplace. It signed for the 12.0 version of Flexcube, which was released in mid- 2012. The implementation got underway by 2013, and the new system went live in early April 2015. The bank has also imple- mented the analytics solution from the vendor, Oracle Business Intelligence Enter- prise Edition (OBIEE). Union Bank is commercially owned and has assets of around NGN 826.7 billion ($4.1 billion). It offers products and services across retail, commercial, corporate, SME and investment sectors. It has a network of 339 locations across Nigeria, representative offices in South Africa, Ghana and Benin, and a subsidiary the UK. The latter has been running Flexcube for nearly a decade.


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