With core banking systems around the world in dire need of upgrade, SAP saw opportunity and focused its attention on this industry sector. Nathan Dukes reports.
In a bid to understand future trends in the banking industry, SAP, in partnership with Accenture conducted research with banking executives the world over in September 2005. What they found was perhaps cause for concern amongst the executives, but which undoubtedly represented opportunities for SAP. They concluded that the legacy infrastructure at the core of the world’s largest financial institutions would not be able to sustain more advanced operations in the future. The list of problems was long: high maintenance costs, lack of integration between tools, complexity and old age, among them. At the time, SAP asserted that the combined effect was that banks could not remain competitive in the changing banking landscape.
Their prediction was that one-third of financial organisations globally would replace their core banking systems within the following five years. This represented 30 per cent of companies in Europe, 35 per cent in the Asia-Pacific, and more than 20 per cent in North America. Two years later, in 2007, the European Financial Management and Marketing Association (EFMA) along with SAP released the results of a survey which reported more than 46 per cent of banks worldwide still viewed their IT infrastructure as a strategic disadvantage, and that 80 per cent of banks were pursuing similar strategies, perhaps ironically primarily to achieve competitive differentiation
Click here to read the full article in the May 2010 edition of Inside SAP.
