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Tech visionMarch 1 2012

Ecobank expansion calls for core systems upgrade

Ecobank's CEO Arnold Ekpe explains how the bank upgraded and centralised its core system across operations in 32 countries, boosting efficiency and saving money along the way.
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Ecobank expansion calls for core systems upgrade

Mass IT rollouts are never easy, especially those involving something as fundamental to daily operations as a core banking system. When the installation takes place across more than 30 sub-Saharan African countries, the complexity and logistical difficulties are ratcheted up several notches.

By 2006, such a rollout had become a necessity for pan-African banking group Ecobank Transnational, however. Since opening its first subsidiary in Togo back in 1988, the bank had expanded to encompass operations in 12 countries, and was eyeing up expansion to a further 18. The strain was beginning to tell on IT systems, explains CEO Arnold Ekpe. In particular, the bank’s core platform – Temenos’s Globus system – which had been in place since the bank's inception, was proving less and less efficient as it grew due to the non-centralised nature of its installation.

“Globus had served us well for quite a while, but it was a distributed system so each subsidiary stood on its own,” says Mr Ekpe. “We found out that over time, that became more difficult to support as the number of countries increased.”

Centralising control

Once the decision to change to a modern, centralised platform was made, Ecobank began a comprehensive nine-month evaluation period, looking at the various core banking applications on the market. The final choice, Mr Ekpe says, was between moving up the scale from Globus to Temenos’s T24 system or to changing provider and opting for Oracle’s Flexcube product.

Bandwidth capacity has increased and [the] quality of service has improved... Connectivity was actually the main problem we faced given the poor telecoms infrastructure in Africa

Arnold Ekpe

In the end, the latter won out for a variety of reasons, in particular because Mr Ekpe had experience with the system from his time as CEO of United Bank for Africa, and more importantly because Flexcube helped address specific regulatory requirements in Francophone countries. Mr Ekpe adds that the fact that it was multilingual was another selling point, since Ecobank is now present in English-, French- and Portuguese-speaking countries and is on track to add Spanish to the list when it opens in Equatorial Guinea in the second quarter of 2012.

Actual installation of the platform was a two-year project, during which Ecobank’s operations in 32 countries were converted to Flexcube and equipped to be run centrally from a newly built $50m facility in Ghanian capital Accra, and, in case of emergencies, a London-based back-up.

Infrastructure issues

As with any project of this magnitude there were, inevitably, some hiccups. However, these had more to do with local infrastructure than the technology itself, Mr Ekpe says. In particular, a lack of bandwidth availability sometimes proved troublesome. When the project was started there was just one overworked submarine cable across western and central Africa. Now there are three, with a further two in the works.

“Bandwidth capacity has increased and [the] quality of service has improved,” says Mr Ekpe. “Connectivity was actually the main problem we faced given the poor telecoms infrastructure in Africa.”

One of the biggest challenges was simply ensuring that links between local subsidiaries and the Accra facility were secured, by building in double redundancy for each piece of connectivity. “We made sure that if one went down we’d have a second, and if a second went down we’d have a third,” says Mr Ekpe. “Basically, we just had to pay more to ensure reliability and consistency.”

We will allow the platform to run for a while and be fully stabilised, but the next stage for us is shared services

Arnold Ekpe

Despite these difficulties, however, the project actually finished a month early, and within budget. The latter, even Mr Ekpe admits to being a trifle surprised at.

Training for change

After installation came training and change management. No small task in a workforce accustomed to a system that had been in place for more than 20 years. “It took a while, but personnel are getting much better at using the system, and as they do, its overall performance is getting better too,” says Mr Ekpe.

Many of these advantages are due to the centralised nature of the system, which has done away with lengthy end-of-day, or end-of-month processing, and helped bring annual increases in IT costs down drastically. But Ecobank’s IT ambitions do not finish here. It now plans to integrate other Flexcube services, including expense management and securities models.

“We will allow the platform to run for a while and be fully stabilised, but the next stage for us is shared services,” says Mr Ekpe. “Since we have a common platform, we can look at some services, such as payments, which are being handled in individual countries [and centralise them too], improving the efficiency of the institution as a whole. It’s strategic cost management really, and we can do more with less on a centralised platform.”

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