Banks in the Asia Pacific region are embarking on core banking system projects over the next three years, according to an IDC Financial Insights report.
The study The New Core Banking Systems Marketplace in Asia/Pacific - It Gets More Interesting from Here examined the core banking modernisation plans of the 10 largest banks in 12 major markets across the region.
"We expect at least 32 of the top 120 Asia Pacific excluding Japan banks to undertake significant changes to their current core banking systems from now to 2015," said Michael Araneta, associate consulting and research director for IDC Asia/Pacific. The projects include not just whole-of-core transitions but also significant changes to key components such as chart of accounts, loans and deposit systems.
IDC revealed that new drivers for core banking projects include improvements in data management, enhancement of risk analytics and super-regionalisation.
"More than ever, banks would like to see their core banking systems help them cope with the onslaught of new regulations and the new reporting requirements that come along with the new rules. This requires better information management, common data models, and integration with core analytics and reporting systems," said Araneta.
Furthermore, as banks vigorously pursue single customer views and other enterprise-wide consolidated views, they discover that data structures in and around the core banking systems are far from ideal - multiple silos exist, the same customers have multiple customer information files, and product systems cannot be reconciled, among many other issues.
"The problem of disorganised data structures gets more severe for large banks that are growing regional businesses, or super-regionalising. Thus, we say that a gradual and iterative re-architecting of data models will be the best solution, and this will be intrinsic in many core banking projects moving forward," said Araneta.
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