Growth at home; plans for abroad


By 2000, Silverlake claimed around 90 sites of the complete SIBS offering with a fair number of additional sites using individual modules such as loans or deposits. The users were spread across Singapore, Thailand, Brunei, Philippines, Indonesia, Vietnam and, of course, Malaysia. Silverlake also got off to a fast start in 2001, winning four deals including Bank of Commerce in Manila. In part, a somewhat raised profile of Silverlake at this time stemmed from the fact that it mopped up after a spate of cancellations for System Access’ Symbols. The deal at Bank Rakyat fell into this category, so too a win at Robinsons Savings Bank in the Philippines. However, Silverlake did not have it all its own way, even in Malaysia. In particular, it was beaten by I-flex Solutions, via a local distributor called Pernec, to a deal at Perwira Affin Bank in 1999. The bank was looking to replace FNS’s Bancs. In the past, a small retail-oriented deal had also gone to Sanchez (BBMB Kewangan Berhad), with FNS also picking up BSN Commercial Bank. The M&I Eastpoint system has also been sold in Malaysia in the past, via a local distributor called Digital Domain. However, as far as retail banking is concerned, until recently there had been few other incursions, despite the Malaysian banks’ tendency to opt for outside packages for treasury and trade finance. Goh admitted that to some banks a solution from Malaysia would perhaps be viewed with scepticism, even when the developer in question employed around 1000 people and had development centres in Kuala Lumpur and the US. Then again, being Malaysian can have advantages. For many in the Islamic banking world, Malaysia is seen as one of, if not the, guiding light. Virtually all banks in the country offer Islamic products (65 per cent of Malaysians are Muslims), made up of mainly savings and loans type offerings. Rather than play catch up, Silverlake’s SIBS has grown up alongside the evolving requirements of Islamic banking working with Malaysia’s Bank Islam, the International Islamic University, and International Islamic Accounting Standards bodies. Silverlake claims that SIBS is capable of supporting not only basic Islamic banking concepts such as Al-Wadiah Yad Dhamanah (Guaranteed Custody) and Al-Mudarabah (Trustee Profit Sharing) but also more specialised products such as Ar-Rahnu (Pawn Broking), Qard Hassan (Benevolent Loan) and Al-Dayn (Debt Factoring). Silverlake has implemented its Islamic banking solution in a fair number of banks, including Bank Islam, and hoped this would make it well placed to address the needs of banks in the Gulf States. To try to establish its presence and build a strong foothold in the Middle East region, Silverlake struck up several strategic alliances. A tie-up with IBM’s exclusive distributor, Saudi


Business Machines, for Saudi Arabia was signed in the first quarter of 2001 as well as one with United Business Machines in Jordan, IBM’s partner for Syria, Lebanon and Egypt. In fact, the push into this region was not new. Silverlake signed a tie-up for the Middle East and north Africa a couple of years earlier with Logica. This would have seen SIBS linked to Logica’s Quaestor Windows NT-based branch system. The latter was built by a Dubai and Bangalore-based company, Synectics, which was acquired by Logica in mid-1998. With around twelve users of Quaestor in the Middle East, the plan was for Logica to market SIBS as its back office system of choice in this region, with Silverlake pushing Quaestor in Asia Pacific. However, the relationship did not produce any tangible results, despite Logica bidding with a combined solution at two banks shortly after the tie-up was forged. There was one oddity on the SIBS user base for a while, in


the form of a first African taker, Banco Austral. However, this came via a round-about route. The Mozambique-based bank was privatised in 1997 and was acquired by a Malaysian bank, Southern Bank Berhad. The new owner sought to run Banco Austral from a version of SIBS which was hosted in Malaysia. The whole episode was an unmitigated failure. The bank had to be recapitalised in 2000 to the tune of around $200 million, at which point it was bought back by the Mozambique government. The bank was subsequently acquired by ABSA, which implemented I-flex Solutions’ Flexcube, in time for the cut-off date for SIBS of February 2003. The Mozambique government subsequently proposed a draconian law whereby banks must carry out all processing within the borders of the country, with this seemingly a direct response to the Malaysian episode.


In its home region, the challenge of regional consolidation


of banks in Asia was spelling fewer but bigger opportunities for retail banking solutions vendors. Mergers meant substantially larger banks spread over the region serving multiple cultures. Just as some wholesale banking vendors had been squeezed out of what used to be stable, fee-paying users, the same could be expected for retail banking vendors. After all, only one solution could remain in the long term. In Silverlake’s case, this has meant a somewhat trimmed user base but with some larger users as a result. In Malaysia, five out of the ten banks consolidating post-merger were using SIBS. In Singapore, OCBC took over Keppel Tat Lee, while UOB merged with OUB, making it Singapore’s largest banking institution. Silverlake won OCBC Singapore in 2000, eight years after winning OCBC Malaysia. Most significantly in Singapore, both UOB and OUB were SIBS users. With the sale of SIBS to Indonesia’s Bank Mandiri in 2001, Silverlake now


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