A SAP retail study in Europe, the Middle East and Africa indicates that banks see cross-selling as a major driver for business growth, but this is hampered by the fact that most institutions have their information stored in silos.
"There is a big focus on cross-selling, but they can`t do it because of silos," says SAP banking solutions director Gerald Faust. "And this is a global trend."
He says the retail study began in 2003, with the aim of finding out from banks what their primary strategy was. The group intends to have 100 banks participating in the study by the year`s end.
Faust, who visited SA last week, says the study shows that the main strategies are cost cutting and business growth, with cross-selling the main driver for growth.
"That is directly influencing our development in the next two years," he says, adding that the group is moving towards a services-oriented architecture approach.
Faust was in the country to talk to local banks about SAP`s loan solution, which can now manage the entire lifecycle of a loan.
"We were always associated with the back end, but now we are also involved in the front end," says Jacques Swart, SAP Africa financial services industry solution manager.
Faust says this is the only standard package that can manage the entire loan lifecycle.
"One of the main drivers behind the need for a single view of the customer is Basel II," says Faust.
The second Basel Capital Accord, or Basel II, determines how much capital banks must set aside to cover unforeseen hazards. This it does by prescribing how to identify, measure, monitor and manage the full range of risks to which the banks are exposed. The greater the risk, the greater the amount of capital needed to cover it.
"Banks are now trying to gather information from the back end," Faust says. "But the major driver is business growth, and banks are saying that they have to get rid of their silos.
"And it is achievable. Deutsche Postbank in Germany brought together 40 different systems. They have that single view and they are profiting from it."
Swart says although most banks are able to achieve an overall view of the customer, they have to open multiple screens to do so. "But to get from a single view to true customer centricity, they will have to change people and processes," he adds.
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