Enterprise data warehouse to anchor bank system
KPMG Peat Marwick is preaching a new sermon to bank clients: Unless they re-architect their back offices, they'll never get the efficiencies or return on technology investments they desire. "Right now there's a reliance on over-stressed, inflexible, isolated computer systems, and it really doesn't work," says Thomas J. Milunec, partner in KPMG's financial services consulting group. "I think a lot of the banks and broker-dealers really need to look at the picture as a whole and not as separate, individual fragments and say it's time to re-architect."
The real-time, multi-currency electronic back office system that KPMG is promoting ideally will provide financial institutions with enhanced services, facilitate entry into new markets, enable cross-selling opportunities through improved client information access, provide trading areas with quicker access to information and improve risk management functions, Milunec says.
The core of the system is a centralized, enterprisewide data warehouse. But as many banks have discovered, the warehouse alone is not the answer. "A data warehouse is going to be as good as the communication in place to communicate with the legacy systems," Milunec says.
While the electronic back office sounds like a budget-breaking undertaking, KPMG offers a seemingly obvious strategy: Centralize technology investments within the enterprise.
Banks that fail to take a strategic approach to technology investments are paying for their mistakes, says Milunec, citing institutions that spent millions to fix their year 2000 glitches but refused to see that they could have re-architected their back offices for about the same price.