because it proves that BCA is an international solution.’ The implementation began in January 2003 and involved enhancements to cover country-specific issues, such as UK tax, which had not previously been supported. A notable BCA customer, due to the extent to which it bought into the SAP vision, was the ultimately doomed Iceland-based Kaupthing, ahead of the financial crisis in the second half of 2008. In many ways its project embodied the enterprise-wide business and systems transformation project approach. The bank had doubled its assets every year since 1998 and in 2002-3 it was the highest mover into The Banker magazine’s Top 1000 banks, jumping 452 places. It was now eighth in the Nordic region, had operations beyond here, and was primarily focused on corporate customers, with its only retail banking of note being at home. In 2003, the bank’s chairman announced that he wanted a unified platform across all offices. He wanted to standardise services and facilitate further organic and non- organic growth. The bank wanted to minimise in-house development and customisation as well as working with large vendors that would constitute strong partners (SAP could almost have written the script


itself). Kaupthing


opted for SAP as its software partner and Microsoft for technology (.Net, Biztalk, C#). The components taken from SAP included its Financial Database (FDB), CML, CMS and BCA.


The bank’s development architect and project head, Asgrimur Skarphedinsson, said the bank was moving forward with ‘small slices’. By May 2005, FDB was live but only for some aspects of IAS at the outset, with full support to be added, followed by Basel II. BCA was live for Finland, Sweden and Iceland; CML was live for Finland and Sweden; CMS was live for Iceland. The applications were hosted in data centres in Iceland and Sweden. Interestingly, one issue had been systems integration, including a ‘surprising’ amount needed between SAP’s own applications. By 2005, BCA was used by around 30 institutions, mostly in Germany but with a reasonable number of sites elsewhere. Since the emergence of Deposits Management, Deposits had been positioned by SAP for banks with below 500,000 accounts. Deposits would continue to be supported, said SAP’s director of banking solutions at this time, Jesper Behr, and it could be ten years before users of Deposits were ready to move. Moreover, Deposits was still considerably broader in functionality than Deposits Management, so there would still be reasons for banks to buy the former. However, at this time it was envisaged that there would


be a migration path, with the intention of making it as easy as possible to move. To this point, generic enhancements had


398


been made to both systems; going forward, this would no longer be the case.


The plan was a fusion of Deposits Management,


Loans Management (as SAP’s main lending system was now called) and its separate Collateral Management System (CMS).


The first version of this supposed ‘fused’ platform, dubbed (for a while) the Bank Processing Platform (BPP), was scheduled for December 2006. Balgheim said that release would bring service enablement for deposits, collateral management, customer information file (CIF), the central business partner component, and parts of lending. There would be one CIF across all aspects. There would also be single product configuration and pricing engines, with these stemming from the Deposits Management application. This looked as though it would remove much of the disparate nature of the suite, including the need to integrate SAP’s own applications for customers taking two or more.


With Deposits/BCA not considered suitable for high-end


retail, it did not fall within SAP’s emerging SOA plans. Hafner said BCA customers would be able to use more and more Deposits Management processes and, at some point in time, it would make sense for them to upgrade. For new customers, such as Standard Bank, it made sense to use the new system from the outset. Third party products would similarly be able to coexist,


so a branch solution would stem from SAP’s partnership with Accenture (derived from the Alnova suite); Meridea was providing the channel delivery layer. SAP wanted to bring in additional partners, said Balgheim,


and a key resource was the SAP Development Network, which would house all of the web services (for ERP as well as for vertical market applications), for access by software developers. The overall architecture was embodied within ESA, which as


pointed out initially stood for ‘Enterprise Services Architecture’ but had seemingly become interchangeable with ‘Enterprise SOA’. A key question was to do with the level of granularity for services within SOA, said Balgheim. A fine level of granularity would bring the most flexibility but would also add complexity and resource overheads. SAP, said Balgheim, had been spending time defining those services that lent themselves to granularity and those that did not. The commonly cited ‘call customer information’ was suited to fine granularity because it is a simple routine which occurs in nearly all process steps. This was not necessarily the case with routines to handle, for instance, setting up mortgage collateral, where the complexity and specialist nature of the task means there is no gain from reuse.


Universal Banking Systems Market Report | www.ibsintelligence.com


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