12 - 18 October 2000

Merging banking and technology through PROFIT

by David Kelleher

The traditional image of a bank has changed considerably over the past few years. Technology and changing market forces have played a key role in bringing about this change.
Gone are the days when banks were solely looked at as a depository of one’s money or else a source of lending to purchase property or other goods. Today banks have diversified their products to the extent that traditional banking is but part of a wider range of financial services now being offered to customers.
Another important change in the local banking sector is that greater attention is given to the needs of
the banks’ customers. In fact, a great deal of focus is given to relationship banking.
The advent of faster technologies and the streamlining of platforms on which banks operate has resulted in many banks looking at technology from a different perspective. Customer needs – which now go beyond simple banking transactions – have “forced” banks to improve their
IT infrastructure to meet these requirements.
Bank of Valletta, which caters for half of Malta’s banking needs, over the past three years, has embarked on a project aimed at not only consolidating its IT services to function on a common platform but also to implement a retail banking system using state-of-the-art technologies.
“Over the past 36 months, since mid-1997, we have carried out a heart transplant on the bank. This is no easy task and the success rates of similar projects both locally and even abroad has not been very good.
“At BOV we are very pleased that we undertook such a task and today, have successfully made the transition,” Victor Denaro, executive head, Information Technology Services Division at BOV, told The Malta Business Weekly.
In mid-1997 the bank embarked on the setting up of the PROFITS banking system, which creates a common platform incorporating all the bank’s IT requirements.
“Between 1997 and January of this year, we set out to analyse, automate and test the new system. In the seven months up to August 2000 we successfully converted over 50 branches, agencies and departments to run on the new system,” Mr Denaro said.
“During that period we converted all customer data, all accounts and all our products to work on one single platform,” he added. Yet, why carry out such a drastic change to the bank’s IT infrastructure?
“The previous system we were using became outdated. It worked fine on a client account basis but it was not scaleable and could not be adapted to changes in the financial world. It had certain limitations,” Victor Hili, BOV’s systems manager, explained.
“This new system allows the bank to operate in such a way that it facilitates the concept of relationship banking, thus allowing the customers’ needs to be addressed with priority,” Mr Denaro said.
The old mainframe systems had its limitations. PROFITS constitutes a uniform and integrated front-office and back-office environment for branches, central departments and alternative delivery channels (phone, internet, and so on), fully supporting 24-hour real-time processing of banking operations.
Utilising user-definable security rules adaptable to specific auditing policies and procedures, PROFITS facilitates standardisation of operational flow, and maximises productivity and quality of customer service. Moreover, its customer-centred architecture and modular design ensure the easy creation of new banking products and facilitate the implementation of relationship banking practices, according to the ever-changing needs of the financial market.
“Apart from utilising Open Systems, PROFITS allows the bank to go online and offer banking services in real time. With the new system, the bank will also be able to enter the e-commerce, smart cards and mobile banking markets,” Mr Hili explained.
This technology will enable customers to bank from the comfort of their home using the Internet. The introduction of high speed access and wireless technology will, in the near future, also permit the bank’s clients to use their mobile phone to carry out bank transactions.
“This was an infrastructural change. The customer will not see a tremendous change but he or she will notice a difference, especially in the way the bank staff deals with clients,” Mr Denaro added.
The new system has been running on its own for the past week after the old mainframes were shut down.
“We did not want to introduce PROFITS with a big bang. It was more sensible to merge our operations using both systems and slowly switch from one to the other. It has been an enormous task and the investment has been enormous,” Mr Hili said.
Bank of Valletta is also renowned for the level of training given to its staff.
Over 1,000 personnel have been trained to use the new system at the bank’s training centre in Valletta.
“We have had tremendous support from the staff who attended training sessions after a day’s work. It has been a great and all-round effort. Our staff have not only been trained to use PROFITS but they have receiving training in soft skills such as marketing and customer relations,” Mr Denaro told The Malta Business Weekly.
“We would also like to thank our customers who were very patient with us over the transition period,” he added.