Somers: What are your IT priorities for the next 12-18 months?
Suppiah: Regional integration is highest on our agenda. We are dedicating significant executive management focus and our best people in a multi-project programme to implement an integrated banking platform across the countries in which we operate. One of the key projects is a new regional core banking system. We call this ‘1Platform’ as it will serve as the foundation to our seamless and borderless banking vision. This in turn will allow us to rationalise, simplify and standardise processes across our footprint leading to greater efficiencies, agility in rolling out new products regionally and achieve a consistent customer experience in markets where CIMB operates in.
Other priorities include implementing a regional data centre and network strategy; as well as supporting the Group’s organic Southeast Asia expansion in countries such as Cambodia and Vietnam.
Somers: What are some of the emerging IT trends that you are keeping an eye on right now?
Suppiah: Green IT, particularly thin client technology and cloud computing is on our radar. Since 2009, we have been progressively replacing our computers at branches with thin clients. To explain, thin Clients are computing devices that function as access points to a centralised processing and storage unit (server). The devices do not have any hard drive to store applications or data locally. Thin client protects customers’ information and enhances CIMB Bank branches’ systems security. Thin client technology is definitely a win-win for the environment, for our internal cost imperatives as well as from a security standpoint. It also helps us improve customer service levels when we upgrade legacy desktops with faster thin clients. With a green IT strategy, the end state is one that frees us of costly, inefficient, legacy IT while enabling a flexible and agile environment.
Regional synergies from hubbing or shared investments are becoming increasingly important as there is much cost efficiencies to be reaped. We have successfully implemented several regional hubbing initiatives including our Treasury System.
Somers: While a number of banks cut their IT budgets during the global economic downturn, CIMB Group reinvested in business enabling technology. How has this strategic investment benefited CIMB Group thus far?
Suppiah: While most banks were cutting budgets, we have invested in enabling business. We took advantage of the lull to engage stakeholders better and obtained high quality input. This has proven to be the right strategy as we have witnessed impressive growth for the Group.
In Malaysia, we made significant investments in customer centricity and transforming customer experience across channels in retail banking. Regionally, our IT investments were led by a strong integration vision and carefully vetted business justifications.
While we focused IT investments on transformational business initiatives, we simultaneously placed a strong emphasis on cost efficiencies in our BAU (business as usual). All our IT investments follow through from business strategy.
Somers: How far in advance do you formulate your IT strategy; and how agile are such plans to market changes?
Suppiah: Given our pace of growth, thinking ahead is essential to scale capability to meet business demands. For instance, we commenced the 1Platform journey against the conventional thinking of “don’t fix it if it ain’t broken”. We recognised that the do-nothing impact would hit us five to six years down the road in terms of escalating operating costs and lack of agility to implement a business initiative or product across borders. We began the 1Platform journey in late 2008, in the relatively early days of the Group’s regional expansion. With the momentum in regionalisation, we are glad we started early. We are becoming increasingly cognisant of the significant benefit in time to market and cost that 1Platform enables.
Our IT strategy is two-fold. We are building a platform to deliver CIMB Group’s regional universal banking vision. We have a dedicated team working on transformational, multi-year roadmaps. At the same time, we respond to immediate business opportunities using our BAU team and a Programme Office to implement solutions for immediate cost savings or new business capabilities.
In a nutshell, we harvest immediate opportunities or continuously plan quick-win strategies while we work in parallel on our long-term priorities. We often reconcile between the two streams to ensure that our short-term versus long-term investments are aligned and cohesive.
Somers: To what extent has the CIMB Group achieved a single customer view across its multiple business divisions (i.e. investment, consumer and Islamic)?
Suppiah: We have made good progress to achieve a single customer view across a few business lines. Our current maturity significantly meets business requirements. As we enhance our data warehousing capability for the long term, we build tactical fixes to deliver immediate solutions.
Somers: Which areas of IT are too important to outsource and why?
Suppiah: We don’t outsource anything strategic. To assess if an initiative or process is strategic, we ask ourselves – is this how we differentiate ourselves from competition? Is there a proprietary or intellectual property component that is key to our strategy? Are our existing skills and domain knowledge essential to managing risk? Is there regulatory compliance to adhere to?
To quote an example, our treasury business systems have our proprietary business practices and risk management knowledge embedded. We require high availability to support trading and risk management activities. Therefore, both the applications and the corresponding infrastructure will not be outsourced.
Somers: How do you maintain a cohesive IT strategy across multiple regions in which regulations and market maturity significantly differ?
Suppiah: As we expand into different markets, regulations will inevitably be a challenge. Our existing IT strategies, especially around shared service synergies, have to be re-visited. We have learnt to use a dual-template model for any standardised system that is built so that we can either hub or implement a replica. Similarly we realise we need a growth-path oriented, multi-step Enterprise Architecture based on whether the current stage of our evolution is green-field, growing or large-scale in a specific market. There is a third dimension, which is harmonising IT strategy in a merger or acquisition scenario, and our approach to this is to blend the best of both sides. It is also critical for us to think through alternatives and getting the plan right so that we are able to balance between controlling complexity and imbibing new ideas.
It is also important to note that it is not necessarily viable that full standardisation or conformance to “head office” IT strategy should always be achieved. Fixing every last local deviation is not worth the energy. We believe in defining “across the board must-haves”, “preferred but not mandatory” and “develop locally” segments of IT strategy.
Somers: CIMB Group is poised for regional expansion across Asia, specifically its brokerage business in Singapore. How important is technology’s role in such expansion; and what do you anticipate to be the biggest technological challenges?
Suppiah: We use technology to enable differentiation strategies in sales and service and in all channels or customer touch-points. Technology also plays a powerful role in cost control by leveraging investments across borders, taking advantage of procurement scale, controlling risks, and disseminating best practises.
The demands of CIMB Group’s regional ambitions require our technology providers to be innovative, robust yet flexible. This challenging technology delivery equation is further compounded by cost efficiency requirements. We have to be path-breaking. We need to do it quickly and economically.
In building our ASEAN franchise, another big challenge is obtaining regulatory clearance on IT approaches that create cross border synergies. It takes detailed sharing sessions to ensure that the objectives, strategies, implementation plans and risk assessments are debated with the regulators to provide assurance that each country’s laws and regulations are not compromised.