Years of double-digit growth stretched Banca Transilvania’s core banking system to breaking point. CEO Robert Rekkers explains how the bank embarked on a long-overdue upgrade.

A complete core banking system refresh is the stuff of nightmares for most IT heads. But when the business expands at the speed experienced by Romania’s Banca Transilvania, it quickly becomes a necessity.

Banca Transilvania – the only locally owned bank of Romania’s big five – was ranked seventh among central and eastern Europe’s highest movers in The Banker’s 2010 Top 1000 World Banks. It has consistently achieved double-digit operational growth for some years and has expanded its network from 40 branches in 2002 to more than 500 today.

Rapid growth can even catch its architects by surprise, however, and the bank is now swiftly outgrowing essential systems, says chief executive officer Robert Rekkers. It currently boasts more than 1.5 million active clients and handles some 6 million accounts with a Misys-supplied core banking platform, which Mr Rekkers says is really only designed to handle 1 million clients at most.

All systems go

Mr Rekkers says Banca Transilvania enjoyed an excellent relationship with Misys, and is at pains to point out that this system has served it well. However, a rate of expansion that exceeded everyone’s expectations meant an upgrade was long overdue. “Growth became one of the decisive rationales for choosing a new core system,” he says.

For Mr Rekkers, the key priorities were a scalable system that would be able to grow with the bank and allow an expanded online banking offering alongside fully integrated delivery channels, such as card systems and mobile banking. To do this, it needed the latest software, middleware and hardware, he says. A truly resilient system, able to run with no interruptions was also crucial, as was the ability to run pre-existing banking software provided by Hewlett-Packard.

Banca Transilvania eventually settled on a package from Oracle, but it did not rush into the decision and spent nearly two years in analysis and discussion of the different opportunities and alternatives before finally selecting its new platform. The project will cost the bank more than €50m and will be implemented over an 18-month period, says Mr Rekkers.

It is a big investment but Banca Transilvania has big plans for the future. “We’re ambitious, we want to become a bigger bank in terms of the number of clients and to be very active in the corporate, retail, SME [small and medium enterprise] and medical markets we service,” says Mr Rekkers. The bank’s medical sector business – which it created after government healthcare reforms in 2007 made many of the country's medical professionals self-employed – has shown particularly strong growth. Mr Rekkers claims the bank now dominates the sector, providing specifically tailored products to numerous high-value customers with consistently low non-performing loan rates.

Home run

To achieve its goals, the bank must be able to compete on an even footing with multinational rivals, and a modern core system will be vital in allowing it to do so, says Mr Rekkers. “As a local bank, we want to have the same kind of technology as our international competitors,” he says. In fact, he is confident that the new platform may even give the bank something of a home-market advantage over more lumbering competition. “On a local level, a lead over the competition is exactly what we’d like to achieve,” he says.

Banca Transilvania’s existing links with Oracle were crucial in arriving at a decision on the platform. It already enjoyed a strong relationship with the US firm, having deployed its database services, says Mr Rekkers, adding that this link gave the bank the confidence to work with Oracle on such a tough project.

This confidence extended to the project’s execution, and Banca Transilvania elected to undertake the installation directly with Oracle, without the help of an external system integrator. It is also a sign of the bank’s future technology strategy, says Mr Rekkers, noting that Oracle’s presence in the region – which includes a support centre in Athens and more than 30 banking customers in the Balkans – was particularly appealing.

“We will implement this core banking system and then take more products from Oracle to upgrade ourselves and be at the forefront of technology,” he says. “We believe banking and technology is going to be implemented much faster than in the past, and the crisis has taught us to be extremely efficient and to look at ways to become as competitive and as technology-driven as possible.”

factbox 

CV – Robert Rekkers

2002 CEO, Banca Transilvania

1999 Country manager – president, ABN Amro (Romania)

1997 Country manager – president, ABN Amro (Colombia)

1994 Vice-president/head of commercial, ABN Amro (New York)

1992 Deputy manager, ABN Amro (Paraguay)

1989 Company financing department officer, ABN Amro (Frankfurt)

1987 Dutch department officer, ABN Amro (Paris)

1987 Training in international management, ABN Amro (Holland)

1985 Training in the field of corporations, ABN Amro (Holland)

1985 Law school (Rotterdam)

1984 University of Business – economics (Rotterdam)

1977 Atheneum B 

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