Complexity has long been the bane of financial institutions tasked with upgrading IT systems to conquer new channels and comply with new laws.
"In one of Gartner's recent CIO surveys, the number one issue was getting [new projects] out fast, so developing the kind of program that brings very quick time to market is really where the bank IT organization wants to go," says Don Free, a research director at Gartner. "If you have a slow-moving IT program, there are cost issues and risk associated with that."
The need to change reporting and risk systems to accommodate fluid regulatory requirements from the Dodd-Frank law is coming at the same time that banks try to deploy new customer-facing innovation such as mobile banking applications, remote check deposit capture, digital in-branch services and tackle new data management for marketing and security purposes.
SAP (SAP) and Temenos (TEMN), two firms that have both long sought to expand their presence in the U.S. banking market, are marketing shorter development cycles and easier-to-understand IT projects.
SAP recently added a number of new banking products and services to its Rapid Deployment Solutions (RDS), including a loan management product that manages the full lifecycle of consumer loans; data migration that allows consumer and product information to be migrated to SAP loans from legacy systems; account processing; real-time sub ledger reporting; and transaction history analysis over an extended period for up-selling and cross-selling. There are also solutions for enterprise resource planning and customer relationship management.
RDS provides a gateway to the SAP HANA platform (a set of data management and modeling tools) to drive cross-selling and marketing; and integration with mobile banking solutions. SAP says this mix of products provides pre-configured tools designed to speed deployment of new services, such as mobile banking, by making it easier to integrate the technology with the bank's core system. "It's one thing to have a mobile application. If you want to build it and push it out to customers, you have to have the integration with the bank's back end system. You need a platform that's device agnostic," says Falk Rieker, global head of IBU Banking for SAP America.
Rieker also says the rapid deployment data migration tool can enable faster response in areas such as marketing and new loan products. "If you can manage data migration faster, you can deploy any new product faster. You can normalize data, put it together in a structured way to leverage it quickly," he says.
SAP's RDS is a packaged solution that combines software, services and content at a fixed price. SAP attempts to smooth out the implementation process by offering best practices advice, pre-configured content and predefined services. SAP claims this enables deployment of new bank technology in 90 days or less at a cost reduction of about 40 percent.
SAP has not always been known as a source of fast and easy tech deployments — clients have complained in the past about its systems being cumbersome to use. While not directly addressing those claims, SAP says its RDS includes step-by-step guides along with test scripts to make implementation easier and faster. "It's like if you have to put a bike together, you get the exact parts you need, the tools as well as an instruction manual. It's all in the RDS package," says Steven Birdsall, senior vice president of SAP's RDS.
SAP's competitors for "fast deployment" preconfigured tools include Oracle's (ORCL) Fusion, which touts modules for CRM; governance, risk and compliance (GRC) and other financial and business applications.
Temenos has released its Model Bank, a product designed to increase speed of deployment though an amalgamation of the experience and knowledge the firm has gained from more than 1,200 bank IT deployments in more than 120 countries. "The Model Bank provides quick, efficient and low-risk delivery of a modern software solution, with a functional breadth and depth across a range of banking specializations. The 'bank in a box' option enables banks to respond much more quickly to changing market dynamics," said Mark Gunning, director of business solutions for Temenos, in a statement to BTN.
Gunning says the firm is noticing more banks seeking "productized" solutions that incorporate best practices and standards, with recent users of the Model Bank including the UK's Metro Bank, which used it to get up and running on the tech firm's T24 core banking platform quickly. Gunning also said Temenos' software is based on service-oriented architecture principles, which can dramatically reduce the integration time and associated costs.
"As we see more advanced architecture solutions being addressed in the marketplace, this kind of more complex configuration of software will bring its own complexity and risk," Free says, adding efforts such as Temenos and SAP's are an attempt to pare down their systems to avoid new configurations when adding new deployments. "These vendors are tasked with finding a safer, faster approach to pursuing these programs in a way that doesn't impact the bank so much."