a financing entity in Malaysia, another Canadian recruit and two further Mexican wins (both from the Temenos base, one of which was Compartamos Banco). Compartamos Banco has become a flagship project for


SAP. The Mexican microfinance institute (MFI), having given up on its implementation of Temenos’ T24, looked as though it was taking another risk. However, it felt it had the commitment of the supplier and, said CEO, Fernando Alvarez Toca, a failure here would damage SAP’s brand in the region as a whole. Compartamos was listed on the Mexican Stock Exchange and had around 2.4 million borrowers (98 per cent of these were women) at the time it signed with SAP. It had plans to take its model elsewhere, with Guatemala and Peru cited by Toca as possibilities. The bank’s decision to opt for SAP dispelled a perception that the vendor’s products and services came with a high price tag, said Simon Paris, head of global banking at SAP at this time. With 2.4 million clients and an average loan of $360, ‘the cost per account/loan is as low as you can get’, he commented. ‘Otherwise an MFI like Compartamos wouldn’t buy SAP.’ Toca hoped Compartamos woud go live with the new solution in the middle of 2013. This would be with Loans Management, followed some time after this by Deposits. In parallel, it was implementing SAP’s CRM solution. The systems are hosted by IBM on a cloud basis. Toca believed cloud was a reality and Compartamos had no desire to implement its own hardware. However, ‘there needs to be openness and flexibility from the regulators’. Only a few months earlier, he said, it was unthinkable for them that Compartamos’ data would be held outside of Mexico. SAP was selected after an extensive RFP process that took


in 17 suppliers. Temenos did not make the shortlist this time. Compartamos’ belief that SAP would have strong commitment to the project was backed up by SAP’s MD for Mexico and Latin America, Diego Dzodan, who said at the time of signing that the deal had ‘huge’ importance for SAP and was seen as a ‘door-opener to many significant projects over the next few years’ so SAP’s aim was to make Compartamos a strong reference. There wasn’t a great deal of difference between SAP’s functionality and that of the competition, said Toca, so the choice came down to other things. SAP relayed its enthusiasm and growth plans for financial services, he said, and this was reassuring. It was also deemed to have a good reputation. It also had a live site in Mexico, a smaller lender, Montepío Luz Saviñón, and this mortgage company acted as a reference for Compartamos. The project at Compartamos did run late, as the initial plan had been for a cutover with first branches in April 2012 followed by a phased roll-out over its 350 branch network. There were


a lot of challenges for the bank and for SAP, said Toca, and any such project was ‘very painful’, but he was ‘comfortable’ with the progress to date. He felt this was a ‘big bet’ for both the bank and supplier and that they constituted a single team. SAP was managing the implementation but there were a number of other partners involved, including an Argentina-based company doing some development work. Compartamos has an unusual business model as it is based on group loans and third party agents (around 10,000) for collecting and disbursing loans. However, he felt the amount of development work was about average for such an implementation. As well as faster time to market for products, the new system


was expected to allow Compartamos to hold much more data, such as biometrics, which would help given the illiteracy of many of its customers. It would also be able to do better analysis of its data. Compartamos had already introduced some new technology of late, ahead of the replacement of the back-end. It had issued handheld devices to its loan agents, hooking into the in-house legacy system and with integration with Loans Management to follow. Toca felt SAP’s mobility strategy might open up additional opportunities from this perspective as well. By 2011, SAP was making less noise about its wins than in the past, perhaps because of the experiences of some of the earlier takers. Nonetheless, it was a relatively successful year in terms of sales for Deposits Management as it more than doubled its sales tally of the previous year, gaining seven new- name wins comprising a handful in Latin America, an off-the- record deal in Benelux, Landshypotek in Sweden (which had earlier given up on I-flex/Oracle’s Flexcube) and RBS in the UK. The latter deal was focused on implementing a deposit liquidity engine for the corporate banking part of RBS. By mid- 2014, RBS was apparently about to go live with fixed deposits and notice accounts for corporate customers. Infosys, RBS’s main system integrator, was working on the project. CGI/Logica worked on the project at Landshypotek and subsequently, in Q2 2014, brought to market a Software-as- a-Service (SaaS) core banking system for the mid-tier Swedish market. The offering is a combination of SAP’s banking platform and HANA, with CGI providing the services, data centre infrastructure and delivery. Although there were no live customers with the SaaS version at the time of launch, Landshypotek had cut over with the software in late 2013 with CGI providing a dedicated platform and maintaining the system. ‘They went live with a very similar infrastructure, SAP on HANA, but not on a service-based platform but a dedicated one,’ said a spokesman from CGI. SAP’s local partner, Applicon, was also involved in this roll-out for the localisation of the SAP engine, and was intended to continue to act as the third party in the new service.


Universal Banking Systems Market Report | www.ibsintelligence.com 393


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