Once again, shared-services architecture will be the buzzword for the Asia Pacific Conference and Exhibition (Apconex) on Banking Excellence 2007 held from 9 – 11 May at Jakarta Convention Center. Anyway, what’s a shared-services architecture ?
This year Apconex main theme is “Achieving Banking Excellence through the Implementation of Shared-Services Architecture.”
Shared-services architecture was introduced last year at Apconex 2006, dubbed Arsitektur Teknologi Perbankan Indonesia (ATPI) –National Banking Technology Architecture. This new architecture enables one bank can share their technology resources with other banks. As a result of that, banks will have stronger bargaining power when dealing with technology vendor.
As we all now, banks today face pressure to comply to new regulation such as Basel II. For smaller banks, the cost of compliance can be very huge. On the other hand, IT vendor tends to see this compliance pressure as some kind of ‘windfall opportunity’ to sell their so called solution –which is okay for me. But some banks are left with little or no choice except to adopt to vendors offerings.
collective resources
ATPI enables banks to utilize IT resources collectively to achieve compliance. Though banks share the same resources, they still competing with each other. At least, banks could concentrate more on products and services rather than technical issues.
This IT resources is not provided by a service provider like in IT outsourcing. Banking industry stakeholders –that includes banks, service providers, and IT vendors- will collectively provide those resources, managed by a self-regulatory body.
One scheme is that IT vendors that serves big banks will provides initial IT investments in ATPI. Then, the operational cost of running that ATPI will collectively shared by other ATPI bank members. Of course, this involved a common standard. ATPI will develop lots of standards for core banking or ATM switching.
This shared-services architecture reminds me of utility computing, in which IT resources is delivered just like electricity, pay as you use model. But in ATPI it’s not a service provider, but all stakeholders build and operate the infrastructure together.
challenges
As good as it can be for banks, not all parties quite happy with ATPI, mostly big banks and IT vendors or service provider (outsourcing providers). Big bank had spent billions to build up and maintain their infrastructure, why bother share it with other banks ? IT vendors or service provider seems reluctant as ATPI will change their business models and weaken their bargaining position.
Sigma Cipta Caraka –one of the major IT outsourcing company for banks- didn’t see shared-services architecture as threat to their business model. Instead, the company packed all of their products and services for banks, then re-branded them as “Bancology.” That was a smart move. Sigma’s marketing message for Bancology is as a ‘framework’ for banks. It consists of core banking system, delivery channel, supporting system, management information system and middleware.
For Apconex detailed conference agenda click here.
image from www.wolffsamson.com
