Cutting Cost to the Core: How a Leading Asian Bank Saved 75% by Moving to Unix

by Bart Narter, January 6, 2010
Case Studies
Asia-Pacific

Abstract

Philippine National Bank was able to cut IT costs by 75% by moving off legacy software and platforms to a new modern infrastructure, while continuing to grow the business at double-digit rates.

In a new report, Cutting Cost to the Core, Celent studies Philippine National Bank (PNB), the former government-owned bank of the Philippines now turned private (nongovernment) bank traded on the Manila Stock Exchange. PNB was able to achieve stunning reductions in IT costs by moving to open systems and modern application software. The bank was running FIS (formerly Kirchman) Bankway International on the IBM mainframe and moved to Oracle Financial Services Software Limited (formerly i-flex solutions) FLEXCUBE running on HP Superdome and HP-UX.


"This kind of cost reduction is a game changer for PNB and its competitors,” says Bart Narter, Senior Vice President of Celent's Banking group and author of the report. “The bank reduced costs across the board: hardware, OS, storage, application software. Other banks would be well-advised to look at their own costs with a clean sheet of paper."

This report examines how PNB came to the decision to move core systems, the selection process that drove them to choose FLEXCUBE, and the implementation and roll out. The report also documents the benefits of the new system: lower total cost of ownership on both the IT and operations sides, better reporting, and better customer experience.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

3

Introduction to the Bank

4

Deciding to Make the Move

7

Selecting a New Core System

9

Making the Move to FLEXCUBE

14

TCO

19

 

Migration

19

 

Platform

19

 

Software

20

 

Operations

22

 

Customer Experience

23

Business Benefits

24

Conclusion

25

Leveraging Celent’s Expertise

26

 

Analyst Access

26

 

Support for Financial Institutions

26

 

Support for Vendors

26

Related Celent Research

28

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