News Room

Technology driven transformation key to South African banks' future in the Flat World

Industry experts and Finacle from Infosys share insights on the impact of banking in the flat world

Johannesburg, 30th May, 2007

Finacle from Infosys and Business Connexion today announced the successful conclusion of their banking executive forum in South Africa held at The Saxon, Johannesburg. The event, one of the series which had earlier been held in prominent cities across the globe like Sydney, Melbourne and Kuala Lumpur etc., was centered on the theme, “Win in the flat world: business transformation drivers for South African banks”. This chapter, being held in South Africa for the first time, brought together an array of thought leaders and visionaries from the banking industry. Chaired by Don Free, Research Director at Gartner and Sanat Rao, Global Head - Sales for Finacle, Infosys, the event addressed key issues and challenges faced by the South African banking industry.

The banking industry is in the midst of a transformation and both business and technology professionals need to prepare themselves for the banking customer of the coming decade. Today’s customer is increasingly demanding and innovative concepts that can address the diverse requirements of a large customer base are key to the success for banks across the globe. This message came through clearly in the deliberations and discussions at the event.

In his keynote address, Free shared the latest trends in the banking industry with specific relevance to globalization. Outlining the critical success factors for South African banks, Free suggested that core banking replacement would be the key driver for banks in the region that are still operating on legacy systems.

“The reality is that these legacy systems are very expensive to maintain – both from a technology and staffing perspective,” says Tony Rall, regional executive of business applications at Business Connexion’s Johannesburg Regional Office. “New generation applications which run on cheaper platforms are required in the ever changing financial services environment.”

According to the Gartner Magic Quadrant for International Retail Core banking report, the critical success factors for contemporary banks to create value in this industry are operating efficiency, scalability, agility and time-to-market, and most importantly, a lower total cost of ownership of their IT infrastructure. These would be the key influencers in selecting the platform to power institutions into next generation banking.

In light of the changing regulatory landscape of banking in the country, banks need access to flexible solutions that integrate seamlessly and cost effectively. Rall says one of the biggest issues faced by financial institutions is the technical requirements brought on by new legislation such as the National Credit Act. The National Credit Act comes into full effect on 1 June 2007 and financial institutions have had to make substantial investments in gearing up their technology for the new requirements. “A solution such as Finacle, provides them the flexibility of modular implementation, so as a new requirement is identified they only need to add that module and not overhaul the entire system” he concludes.

In an interesting session on Partnership for Transformation, Rao acknowledged that Tier1 banks across the globe have recognized the need and urgency to commence with the core systems replacement program. “The core banking landscape is poised at one of the most exciting and defining phases and is likely to witness considerable momentum”, says Rao. Commenting on the banking scenario in the South African region, he adds, “This is the most opportune period for banks and technology partners to leverage the transformation opportunity and create successful partnerships.”

About Gartner Magic Quadrant for International Retail Core Banking