Bank Santander is well versed in the challenges of large IT
integration projects following mergers and
acquisitions.
The group is migrating its core IT systems onto a single platform
and has begun work to develop a new banking system based on Java
technology.
The £170m IT consolidation project is expected to save its cost
each year. Half the savings will come from reduced IT expenses and
half from more efficient back-office operations, according to
research firm Celenet.
The project aims to streamline the bank's IT infrastructure
following acquisitions. The Santander group owns two major banks,
Santander Central Hispano and Banesto.
"As a result of its aggressive acquisition strategy, Santander,
like so many other large banks, has been left with a tangle of
disparate IT systems, which have significantly inflated costs,"
said a report from Celenet on Santander's IT.
"The scales of economy that should accrue to merging banks as a
result of greater scale remain elusive, most often because the
technology and operations of the acquired banks are not integrated
and continue to run separately."
In 2002 Santander began the Partenon project to consolidate its
banking systems.
This has involved moving its main banking systems onto the Banesto
platform.
The migration is being overseen by a subsidiary created by the
Santander group. The second stage of the IT project, which began
this summer, involves developing a new banking system for the bank
branches.
Santander bank uses IBM mainframe architectures and IBM's DB2
database technology. It uses a single customer database, from its
Banesto subsidiary, for all applications across the bank.
Having a single database has delivered a range of benefits,
according to Celenet.
"All of a customer's relationships with the bank, be it mortgages,
deposits, cash management, cards, brokerage services, or insurance
products, are automatically linked and immediately visible to bank
employees. This leads to higher cross-sell ratios, higher levels of
customers satisfaction and better operational performance," said
Celenet.