Acumen. There was a twist at Ivobank. The bank was not a success and duly closed. However, a number of senior managers from the bank took that institution’s systems infrastructure and set about seeking to offer it to the market as a hosted service. They set up a company called Intelligent Managed Services Limited (IMS), 95 per cent owned by the Indonesian Sampoerna family, who were the backers of Ivobank. The other five per cent was owned by Fiserv and the service used ICBS/Signature for the core back office.


Ivobank ceased taking new business in September 2009.


Lessons from Cahoot had been applied when Ivobank had come to install its new systems and everything had gone very smoothly from a technical perspective, said IMS managing director, Alex Daly (and ex-finance director at Ivobank). The problem was identifying the right market segment and attracting sufficient business, combined with tougher capital requirements from UK regulator, the FSA. More investment was needed and the Sampoerna family felt there were better returns to be had elsewhere, he said. They looked at how they might recoup some of their investment and out of this came the idea to create a processing company. Ivobank’s systems search had really focused on trying to


find a ‘bank-in-a-box’ solution, said IMS’s director of managed services, David Poulton. ‘We learnt there really wasn’t one.’ The Indian companies, for instance, would manage an environment but the user would need to pay the set-up and customisation costs. Others had hosted elements but no one had a full infrastructure. And, perhaps wisely as it turned out, suppliers were not keen on a per-account or other usage-based payment models because of the start-up nature of Ivobank. In the end, Ivobank concluded that ‘Fiserv was a long way


ahead’, said Daly, but it was still a case of the bank needing to install the infrastructure itself. As well as ICBS at the core, Ivobank’s configuration included the Aperio channel solution, Aqua Global for payments and Smartstream for reconciliations (also part of Cahoot’s set-up). These also now came within IMS’s offering, along with full disaster recovery across two data centres and duplicate components. IMS had 18 staff around the time that it launched, in early 2010, with the expectation that it would need to increase its operational team. It would be able to offer a usage-based payment model, said Daly, as the investment in systems had already been made. There was a need to renegotiate contracts with the suppliers to account for the hosted business model. These negotiations were ongoing. Ivobank had gone live in February 2008, well ahead of opening for business, and apparently ran smoothly for 18 months. The systems were all set up and ready to go, said Daly,


so would bring much faster time to market than traditional routes. As well as the full bank infrastructure, users might choose to take only particular portions, such as internet banking.


IMS had been passed a couple of RFPs by Fiserv. Targets


cited by Daly included start-ups, building societies and existing small to mid-tier banks, perhaps taking over parts of the operations in the latter two categories. Initially, at least, it would target the UK, although its systems were SEPA- compliant so could be applicable across Europe. However, none of this came to pass because conversations started with Virgin Money, culminating in this aggressive would-be UK bank buying up IMS and thereby gaining a platform and back office at one fell-swoop. The deal was signed in September 2010.


A spokesman for Virgin Money, Scott Mowbray, believed the deal had come about ‘through existing relationships rather than a beauty parade’. On inspection, ‘the solution was just what we were looking for’. IMS’s eleven staff at this time moved across to Virgin Money as part of the transaction. The incentive was clearly Virgin Money’s intention to launch its own bank in 2011, said Mowbray. The precise date had not been released. ‘We think there is a fantastic opportunity to offer a real alternative to the four or five large incumbent banks. The start date is less important than ensuring that we really get it right.’ One other piece in the jigsaw was already in place, with Virgin Money gaining its banking licence at the start of the year through the £12.28 million purchase of Somerset-based niche bank, Church House Trust. Virgin Money had bought ‘a near complete solution, although I am sure there will be some adaptation’, said Mowbray. There would not be a migration project as Virgin Money’s current financial products were mostly offered via partnerships, including with Bank of America subsidiary, MBNA, for credit cards and IFDS for funds management. The new systems will complement these tie-ups, and will support a range of products including current accounts, savings accounts and mortgages. A notable project at Panamanian start-up Unibank was concluded by mid-2011. The bank had launched with $50 million in capital - five times the minimum required - in December 2010, with its founder, Joseph Salterio, formerly CEO of HSBC in Panama. ‘The selection of Fiserv as a reputable, knowledgeable IT provider was the first thing I did to get organised,’ said Salterio. His team initially carried out a study of about a dozen firms which were ‘recognised worldwide as leading providers of banking services’. This was then narrowed down to the vendors which had local experience. Salterio,


Universal Banking Systems Market Report | www.ibsintelligence.com 147


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