The integration of the IT operations of German banks,
Commerzbank and Dresdner Bank, which announced a merger yesterday,
will be a challenge because of each bank's extensive use of
proprietary software.
Commerzbank, which is acquiring Dresndner Bank for £5bn, has
established a joint integration team that will be responsible for
merging their IT systems.
Bob McDowall, analyst at TowerGroup, said bringing together the
IT infrastructures of the two companies will be a challenge because
both use in-house built systems.
"The German banks have traditionally used proprietary systems
and when you use these, rather than third-party systems,
integration is more difficult. There will be some challenges
rationalising proprietary systems."
He added that due to the use of in house built systems, German
banks usually have big IT departments. "They will rationalise IT
but it could take some time."
Banks that
use
off-the-shelf systems can migrate their entire infrastructure
to use the same systems during a merger. This is usually possible
by negotiating with the suppliers, said McDowall.
According to Commerzbank, office jobs including IT will be cut
as a total of 9000 jobs are shed.
About 70% of the 9000 redundancies will be in the back office,
control and production units, as well as in investment banking. A
total of 2500 will be outside Germany.
The combined workforce of the two banks is almost 67,000.
Commerzbank employs a total of 1000 people in the UK with 400 of
these in the back-office. Dresdner Bank employs 2000 people in the
UK.
