Why Jyske Bank joined Bankdata Lene Weldum, General Manager Bankdata

Why Jyske Bank joined Bankdata
Lene Weldum, General Manager
Bankdata
Topics
The Danish banking sector
(from an IT-perspective)
Bankdata – in very brief
Why Jyske Bank gave up on their
in-house development strategy
The money-side
The Danish banking-sector and
the supporting IT-landscape
# Danish banks
2007:
147
2013:
89
And counting…
(At least 6 banks in process of merging to 3)
The IT-landscape in Danish
Banks - 2009
IT development
IT operations
Danske Bank
In house
IBM
Nordea
In house
IBM
Jyske Bank
In house
JN Data
Sydbank, Alm. Brand
bank, …
Bankdata
In house
Arbejdernes Landsbank,
Handelsbanken, …
BEC
In house
Spar Nord, Kronjylland,
…
SDC
IBM
The IT-landscape in Danish
Banks – spring 2010
IT development
IT operations
Danske Bank
In house
IBM
Nordea
In house
IBM
Jyske Bank
In house
JN Data
Sydbank, Alm. Brand
bank, …
Bankdata
In house
Arbejdernes Landsbank,
Handelsbanken, …
BEC
In
JNhouse
Data
Spar Nord, Kronjylland,
…
SDC
JNIBM
Data
The IT-landscape in Danish
Banks – autumn 2010
IT development
IT operations
Danske Bank
In house
IBM
Nordea
In house
IBM
Jyske Bank
In house
Bankdata
JN Data
Sydbank, Alm. Brand
bank, …
Bankdata
In
JNhouse
Data
Arbejdernes Landsbank,
Handelsbanken, …
BEC
In
JNhouse
Data
Spar Nord, Kronjylland,
…
SDC
JNIBM
Data
The IT-landscape in Danish
Banks - 2013
IT development
IT operations
Danske Bank
In house
IBM
Nordea
In house
IBM
Jyske Bank, Sydbank,
Alm. Brand bank, …
Bankdata
JN Data
Arbejdernes Landsbank,
Handelsbanken, …
BEC
JN Data
Spar Nord, Kronjylland,
…
SDC
JN Data
Bankdata’s position in the
Danish banking sector
Jyske Bank
2010
2013
Bankdata
Bankdata
Danske Bank
BEC
Danske Bank
BEC
SDC
SDC
Nordea
Nordea
Measurement: Banking-balances in Danish member-banks
Bankdata in brief
Bankdata – the fundamentals
Bankdata is located in
Fredericia (HQ) and –
as of November 2012 Silkeborg, Denmark.
Bankdata was founded
in 1966.
Bankdata is owned
100% by the members
Bankdata has only a
few (insignificant)
number of servicecustomers
Bankdata members ownership
Sydbank
41,0%
30,0%
Other banks
(11)
Jyske Bank
29,0%
Staffing structure in Bankdata 2013
650 employees
1% 2%
4%
Mangement, HR,
Admininstration
Development and
development support
Security and Audit
Customerservice
92%
Jyske Banks strategic decision
Why change IT strategy?
(From Jyske Banks internal presentation)
Challenge
Jyske Bank wants to grow substantial in markets share
The IT-department does not have the resources to support the business
model and the ambition for growth
The ongoing consolidation in the financial sector – also in the supporting
IT-structure – will cause Jyske Banks relative IT-costs to increase
Possible solutions
Increase access to IT resources
1.
Substantial growth in Jyske Banks development center
2.
Collaboration with others
Why change IT strategy?
(Bankdata’s perspective)
Jyske Bank’s IT-solutions were
comprehensive and supported the
business extremely well
From an IT-perspective, the systems
were very complex and difficult to
manage/enhance
Jyske Bank had no recent history of
acquiring banks, so the IT-department
and IT-solutions were ill prepared for
merging data from another bank
Rating
Concerns regarding collaboration
around IT-development
Main concerns
1 of 3
Is IT a competitive factor in itself?
No!
Amongst Bankdata’s members:


Ringkjøbing Landbobank.
By medias declared “Danish Champion in
banking” 4 years in a row
Banks who have had to seek mergers
Main concerns
2 of 3
Does a bank loose it’s identity
when running shared IT?
No!
Even though the banks are delivering the
exact same online-bank to their customers,
the customers don’t realize this (partly due
to “colors and visuals”)
Online banking – perception
(2007)
Main concerns
3 of 3
Is collaborating with other banks
around IT-development an uphill
and ongoing battle?
Yes and no
The banks do have to spend time at meetings
and finding common ground
(“mid/high” common denominator)
But they also derive benefit from other banks
ideas
Competitiveness
The major up’s!
1 of 2
A large and technological sound IT-system
A much better IT-solution for the business customers
Significant cost reduction (numbers later)
Significant growth in IT resources available for “free”
development
A large chunk of anyone's IT resources now a days held up in
supporting/managing old IT-systems and complying with new
legislation
The major up’s!
2 of 2
A setup geared for merging banks
Since decision to move to Bankdata, Jyske Bank has acquired
two banks.
The first one is merged into Jyske Banks IT-system; the second
one scheduled for may 2014
A setup where other banks (= Sydbank) contributes
with business knowledge in the IT-development
projects
Jyske Bank does not have to participate in all projects
Especially attractive when dealing with the many legislationprojects
The major down’s!
Jyske Bank lost their 100 % influence on every aspect of IT!
They gave up a lot of business functionality
But they gained a lot of new and improved stuff as well
A large upfront negative response from the private
customers
Consumer-organisation,
”TÆNK”, test
June 2010
Danske
Bank
Navigation
Nykredit
Jyske
Bank
6
9
Ease of read
7
Userneeds
Sydbank
Amagerbanken
Nordea
Lån&Spar
bank
7
9
10
6
10
8
7
9
8
8
9
3
7
7
7
9
4
9
Userexperience
3
7
3
7
5
4
3
Communication
8
10
5
9
10
9
8
Design and clarity
6
8
3
9
8
3
10
33
49
32
50
50
34
49
Total
Onlinebanking in DK
May 2010
The major down’s!
Jyske Bank lost their 100 % influence on every aspect of IT!
They gave up a lot of business functionality
But they gained a lot of new and improved stuff as well
A large upfront negative response from the private
customers
Quickly subdued with a few improvements
An enormous task with preparing to migrate a complete
bank in a “big bang”
On the positive side: They have a very “clean” bank today
The numbers
Cost - Savings
(million Euros per year)
Savings estimated at time of
signing (1.9.2010)
2013
2014
2015
35
37
38
Cost - Savings
(million Euros per year)
2013
2014
2015
Savings estimated at time of
signing (1.9.2010)
35
37
38
Savings estimated 1.9.2011
35
39
41
Cost - Savings
(million Euros per year)
2013
2014
2015
Savings estimated at time of
signing (1.9.2010)
35
37
38
Savings estimated 1.9.2011
35
39
41
Savings estimated 1.9.2012
36
45
52
Thank you
Lene Weldum, [email protected]
Appendix
Collaboration model in Bankdata
Collaboration model
Board of directors
Advisory Committee
Resorts – 9 in total
Bankbasics
Selfservice
DW/
BI
Markets
xx
Bankbasics
Selfservice
DW/
BI
Markets
xx
Product management councils – 9 in total
Collaboration model
The board of directors is led by the chairman
of the board.
All other governance groups are led by
Bankdata
The banks have enormous influence on Bankdata’s
development plans
But in the end Bankdata will take responsibility for
outlining the total development plan, because


Bankdata is the one, objective part
Bankdata has to take responsibility for matching the
demands for development with the resources and
competencies
Collaboration model
Board of Directors
CEO’s of 6 banks
Chairman of the board: CEO of Sydbank
Bankdata rep.’s: CEO & CTO/COO
Responsibilities:
Strategies for Bankdata (as a company)
The economic framework for Bankdata

Rolling 3 years strategic budget
Uphold the principles for collaboration –
amongst themselves and in their respective
banks
Collaboration model
Advisory committee
CIO’s of 6 banks
(same banks as board of directors)
Led by: Bankdata’s CEO & CTO/COO
Responsibilities:
Advise Bankdata’s management about overall
priorities for use of Bankdata’s resources
Oversee the project-portfolio and follow up
on implementation (benefits realization)
Uphold the principles for collaboration
Collaboration model
Resorts (9 in total)
Each resort covers a “Line of Business” (LoB)
E.g. “Markets”, “Selvservice”, “Credit/lending”…
Each resort led by a development manager of the
respective line of business in Bankdata
Members: Line of business responsible from 3 or4 banks
Jyske Bank and Sydbank are members in all resorts
Each resort has a “Primary resort-responsible sponsor”

This is always either Jyske Bank or Sydbank
Responsibilities:
Outline the strategy for development in the LoB

within the resource-limitation set out by the advisory committee
Ensuring that applications/systems within LoB are maintainable
and supporting the business needs
Ensuring cost/benefit is estimated for all projects in the resort
Following all development projects within the resort
Follow up on implementation and benefit realization on delivery
Collaboration model
Product Management Councils (PMC)
Each PMC covers a “coherent product suite”
E.g.: Accounts, Payments & Cards,
Each PMC refers to a resort
Led by: Product department manager from the LoB
of Bankdata
Members: Subject/product leaders from 3 or 4 banks
Jyske Bank and Sydbank are members in all PMC’s
Responsibilities:
Making sure the systems are functioning and supporting
the day to day use in the banks
Propose “maintenance-projects” to the resort in order to
keep the systems “fit and proper” for ongoing use
Proposing renovation-projects for systems which are
considered not fit for longtime use or further development