Aktia’s Tips for Keeping Core Banking Transformation Simple

Magnus Weurlander, CIO of Aktia, shares his experiences of core banking system transformation

There comes a time when a bank has to look hard at itself and judge whether its systems are fit for purpose. For Aktia, Finland’s fourth largest bank, that came in 2012, not far short of our 200^th anniversary in 2025.

Interest rates were already low and still falling, regulations were becoming ever more burdensome,customer expectations were rising, and maintaining our complex systems were taking up more budget than was rational. It was obvious we needed to simplify the systems and bring them up to date.

Our targets and goals were also clear – to cut €5m a year from our IT budget, speed up product design and the time it takes to get products to market, meet higher customer expectations by being omni-channel, and be able to use customer data to up sell and cross-sell. We wanted the transformation to be swift – within months rather than years.

It took us a year of planning and after the summer break 2012 we sent out a Request for Information followed by a Request for Proposal in October 2012, and subsequently shortlisted five vendors.  During the first half of 2013, we ran a proof of concept with two vendors and concluded the exercise by choosing Temenos, which allowed us to leverage their‘Model Bank’. This is the template that provides banks the foundation for all the functionalities they can leverage.This was one of our ways of keeping implementation costs down and completing the project more quickly.

As part of this process we looked carefully at our own processes and customer agreements and it meant changing customer accounts accordingly, rather than modifying the new system to fit our practices. This approach is always going to be a big change for an organisation, but in reality it feels bigger than it really is. It’s certainly a cultural change. The real challenge was a cultural one tied to the fear of losing customer accounts. But the fact that we didn’t lose a single customer says it all.

The next stage was training our end users. Again, this is a critical point of the transformation and we took plenty of time to ensure we understood what they thought.

 While the training is continuing, our communication programmes both within the project team and outside are still running in parallel. It’s important to make sure everyone knows what’s going on and are buying into the changes. We possibly made the mistake of giving too many updates: half way through the project our colleagues were saying “Enough! Just tell us when it’s over!” But in fact the feedback has been very positive.

That’s not to say the project has plain sailing. Lessons have been learnt throughout. As Sly Stallone’s Rocky Balboa says:“It’s not how hard you can hit, it’s how hard you can get hit and stay standing.” There are always going to be problems on a big project, but it’s how you deal with them that counts.

Magnus Weurlander’s top tips for a successful transformation

• Plan and pre-plan
• Pick the right vendors
• Pick the right people
• Focus on teamwork
• Focus on project management
• Stick to packaged software
• Define and follow up on entry criteria
• Use the correct project tools and methods
• Don’t be overly optimistic
• Don’t do any other big projects at the same time
• Don’t start without proper documentation

Magnus Weurlander is a Member of the Executive Committee, Director and CIO at Aktia

Magnus Weurlander, CIO of Aktia, shares his experiences of core banking system transformation

There comes a time when a bank has to look hard at itself and judge whether its systems are fit for purpose. For Aktia, Finland’s fourth largest bank, that came in 2012, not far short of our 200^th anniversary in 2025.

Interest rates were already low and still falling, regulations were becoming ever more burdensome,customer expectations were rising, and maintaining our complex systems were taking up more budget than was rational. It was obvious we needed to simplify the systems and bring them up to date.

Our targets and goals were also clear – to cut €5m a year from our IT budget, speed up product design and the time it takes to get products to market, meet higher customer expectations by being omni-channel, and be able to use customer data to up sell and cross-sell. We wanted the transformation to be swift – within months rather than years.

It took us a year of planning and after the summer break 2012 we sent out a Request for Information followed by a Request for Proposal in October 2012, and subsequently shortlisted five vendors.  During the first half of 2013, we ran a proof of concept with two vendors and concluded the exercise by choosing Temenos, which allowed us to leverage their‘Model Bank’. This is the template that provides banks the foundation for all the functionalities they can leverage.This was one of our ways of keeping implementation costs down and completing the project more quickly.

As part of this process we looked carefully at our own processes and customer agreements and it meant changing customer accounts accordingly, rather than modifying the new system to fit our practices. This approach is always going to be a big change for an organisation, but in reality it feels bigger than it really is. It’s certainly a cultural change. The real challenge was a cultural one tied to the fear of losing customer accounts. But the fact that we didn’t lose a single customer says it all.

The next stage was training our end users. Again, this is a critical point of the transformation and we took plenty of time to ensure we understood what they thought.

 While the training is continuing, our communication programmes both within the project team and outside are still running in parallel. It’s important to make sure everyone knows what’s going on and are buying into the changes. We possibly made the mistake of giving too many updates: half way through the project our colleagues were saying “Enough! Just tell us when it’s over!” But in fact the feedback has been very positive.

That’s not to say the project has plain sailing. Lessons have been learnt throughout. As Sly Stallone’s Rocky Balboa says:“It’s not how hard you can hit, it’s how hard you can get hit and stay standing.” There are always going to be problems on a big project, but it’s how you deal with them that counts.

Magnus Weurlander’s top tips for a successful transformation

• Plan and pre-plan
• Pick the right vendors
• Pick the right people
• Focus on teamwork
• Focus on project management
• Stick to packaged software
• Define and follow up on entry criteria
• Use the correct project tools and methods
• Don’t be overly optimistic
• Don’t do any other big projects at the same time
• Don’t start without proper documentation

Magnus Weurlander is a Member of the Executive Committee, Director and CIO at Aktia