With the Frankfurt-based SAP user conference Sapphire now in full swing, Computing pinned down SAP's head of global financial services Don Trotta for a few minutes between meetings.
The former Barclays chief information officer (CIO) – he left in 2008 – gave us a snapshot of current demands within financial IT, his ideas on where IT for the sector was heading, and details of potential new UK customers for the company.
Computing: So what type of services do financial
institutions require now?
Trotta: Banks have been acutely aware for a long time that their legacy systems, which are often more than 30 years old – such as those provided by Hogan – have become too costly to run.
Even though these systems may have started out as off-the-shelf packages, they have been modified so much that they are now bespoke systems and very complex and unwieldy.
The banks' CIOs kept costs down by outsourcing, offshoring and renegotiating contracts, but this wasn't enough and the legacy system costs continued to rise.
The problem had been that there was no Tier 1 solutions on the market. Systems from Infosys or Oracle are aimed more at Tier 2 and 3 banks.
Our SAP for Banking System, which was first deployed in 2006, is aimed at Tier 1 players.
Since the September 2008 financial crisis, when banks realised they would have to run off a low-cost base for a while, a number of banks including Nationwide and Deutsche Bank have taken up our platform.
The consolidation that resulted from the crisis has also spurred many other Tier 1 players such as Bank of South Africa and Bank of Canada to take up our software. This has allowed them to streamline services across what had been totally different platforms.
The SAP for Banking platform is SOA enabled.
What were CIOs doing before the crisis?
Many banks were developing platforms around internet and mobile banking but were leaving their core platforms alone. This began to change three or four years ago, and the financial crisis was the catalyst for real change in the sector.
Tell us about any key UK customers you have
Well, Nationwide has implemented a full solution alongside a transformation project, Barclays has also taken on many elements of our platform, around HR and procurement. We are currently in discussions with HSBC and RBS.
So what are the key issues for those working in financial IT going forward?
Consolidation will see larger banks such as Deutsche Bank, which acquired many subsidiary banks abroad, want to create scale and a common set of platforms.
They will also be looking at the new channel space. Mobile and internet banking services need to be made as simple as services provided by Amazon or Google. We need to take the complexity out of the system.
Finally, the regulatory environment is being tightened up, with issues around transparency, risk and compliance now more prominent. This area, which requires extensive business analytics, is one of the strengths of the SAP platform.