Silicon Valley Bank's Core Conversion, A Year In

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A year after Silicon Valley Bank formally went live with Oracle Flexcube core banking software (in late 2010), we've checked in with the bank to find out how this project — Oracle's first successful Flexcube deployment in the U.S. — is going. Although this is a gradual rollout and the bank doesn't expect to complete it until early 2014, much progress has been made.

The bank bought the software in March 2009 and started to move all its multicurrency deposit accounts to it in October of that year. "At the same time, we increased our capability in that area by offering more than 19 different currencies," says Harbir Dhillon, core banking, IT portfolio manager and program manager for the Flexcube implementation at Santa Clara-based Silicon Valley Bank. "That allowed us to grow in that area and accommodate the needs of our larger clients." This early experience enabled the IT staff to learn Flexcube and the intricacies of implementing it.

In early 2010, Silicon Valley made Flexcube its client master for customer data across the bank. It integrated Flexcube with its CRM and its legacy core systems. "Flexcube became the single source of truth for client information," Dhillon says.

Currently, the bank is in the midst of deploying Flexcube for trade finance and asset-based lending and it's getting ready to deploy Flexcube for core processing in its planned U.K. branch.

This has deliberately been a cautious rollout. "The existing core system may be older than we'd want, and it may not be as robust as we need it to be, but it's still doing the business it needs to do," Dhillon says. "If you start with the core processing first, it becomes more of a cost reduction, infrastructure simplification project. We wanted to build out the capability we were missing in our environment today, and that allowed us to do more greenfield type work with Flexcube."

Another reason for the slow migration is to ensure the integrations will work properly. "We don't want to take shortcuts," Dhillon says. "With all these early deployments we're building up the foundation we need to put in place for our U.S. system, so that when it comes to migrating the U.S. products, the infrastructure will already be in place." As each new module is rolled out, its data sets are integrated with the Oracle data warehouse. "With each deployment, we had more and more information flowing as we implemented newer products," Dhillon says.

Benefits the bank has seen from Flexcube include improved client reports, Dhillon reports - they're more graphical and modern looking than before. The bank has been able to set up straight-through processing for multicurrency accounts, which was not possible under the old system.

Ultimately the bank would like to consolidate processing for all products on Flexcube, "which will have tremendous benefit for us in terms of infrastructure costs," Dhillon says. It will also have a standard way of integrating systems, "whereas before our legacy systems had a lot of point solutions and as the company grew, so did those add-ons, bolt-ons, and integration points," he says.

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