Challenger bank Hampden will start operating in the first quarter of 2015, following its decision to use a cloud-based banking platform from Oracle.
The Edinburgh-based private bank, previously known as Scoban, is using Oracle Flexcube and cloud services for its digital banking operations. It will be the first UK bank to use cloud applications based in Oracle’s UK cloud datacentres.
Oracle’s software will manage the bank’s core banking, as well as direct and mobile banking operations. It will be provided from Oracle’s UK datacentre based in Linlithgow, Scotland.
The managed service from Oracle aims to aggregate data from different sources to allow the bank to better understand customers and offer personalisation.
Hampden CEO Graeme Hartop said there is growing demand for private banking services in the UK.
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“Increasingly, private banks are focusing on wealth management rather than core banking – a gap in the market which we seek to address with the help of Oracle," he said.
"We view delivery of outstanding client service as a priority, which in today’s world needs to be supported by the best technological core banking platform available."
New challenger banks that have emerged since the financial turmoil which began in 2008 are able to use off-the-shelf IT from suppliers. This gives them an advantage over traditional banks that are hindered by legacy systems, which are expensive to maintain and were not designed to work alongside new technologies such as mobile and big data.
A recent survey of 2,000 people by banking software supplier Fiserve revealed 80% of people would trust a bank if it had the right technology in place. More than half (56%) said a new bank would have an advantage over rivals if its IT was reliable.