SCB TechX, Publicis Sapient breathe new life into banks with Core Modernization

Publicis Sapient senior director of technology Ronnie Mitra and SCB TechX head of architecture strategy Kaweepap Kongkittisan explained that the concept simply assists banks in identifying which of their core businesses need to be transformed and which new technologies to adopt to deliver the experiences customers expect.

Their comments came during a panel discussion at Money20/20 Asia, which took place in Bangkok on April 24.

"When we say core banking modernization as an innovation enabler, we truly mean that it unleashes all of that. If you can address the heart, we can begin to address all of the other issues. Everything becomes easier, cheaper, and less risky to execute," Mitra explained.

Kaweepap used the analogy of a car to explain his point. A car that has undergone renovation may appear new and modern, but if the engine remains the same, the car will have a problem while driving, he said.

It is the same with Core Modernization, he said.

“Core Modernization is the process of overhauling critical business systems. Consider the business's core operations and data. These are frequently supported by older, less adaptable IT systems, similar to the rusty backbone of a building. Core modernization entails transforming these core systems into more modern, efficient designs,” he explained.

What drives the need for Core Modernization?

While many banks and financial institutions around the world are now leveraging the power of cutting-edge cloud-based core platforms to disrupt the industry, accelerate product development, and create new and innovative customer experiences, some are frequently hampered by creaky legacy core systems that stifle growth, suffocate innovation, and ultimately fail to meet customer expectations.
 

And that is when Core Modernization is required, the two tech gurus said.

"If they can modernise the core, they will be able to attack with innovation while maintaining their place in the complexity of banking rules, which represents some of the bank's true value," Mitra said.

To demonstrate the efficiency of Core Modernization, Kaweepap provided some examples, such as a bank's inability to use artificial intelligence to conduct data analysis.

Core Modernization will make banks realise that their core data is locked in an old system.

"And with modern core architecture, we can begin to extract the data. So, as a bank, I could begin to better understand my customer. I could begin to drive the data models for chat bots to provide better customer journeys. "The tech is always available, but when the data is locked in, I can't use it," he explained.

Core Modernization: Proof of Success

In 2021, SCBx, the parent company of Siam Commercial Bank, and Publicis Sapient formed a joint venture to launch SCB TechX, ushering in next-generation financial services and digital technologies in Southeast Asia.

A true cloud native entity, SCB Tech X helps institutions reinvent how they engage with their customers and drive significant efficiencies in the back office. With a scalable and flexible business model, SCB Tech X delivers innovations at speed.

Today, with a progressive modernization approach, Publicis Sapient takes a modular, iterative approach to Core Modernization for its customers. This approach enables customers to achieve faster results, increase return on investment, and reduce risk to the organization and business.

"One strategic example is that we are assisting one of our customers, a leading Southeast Asian bank, in migrating its core, including 25 million customers and payments, from a 1960s mainframe core to a modern cloud-native platform by partnering with an Asian core banking software vendor. We are running both old and new cores for our client's progressive modernisation journey, ensuring that both old and new systems can coexist and operate concurrently during the migration," they noted.

They pointed out that the impact of Core Modernization ranges from technical cloud migration to improved brand reputation and customer satisfaction, with positive feedback from both customers and employees. The reduction in manual processes, incidents, and downtime has allowed for a more resilient and agile operation.

What's next?

Publicis Sapient sees Thailand as a regional leader and is committed to expanding its local team while exploring new opportunities as the ASEAN digital economy grows.

"Thailand's burgeoning fintech ecosystem, coupled with its supportive network of investors, accelerators, and industry players, solidify its position as a leader in ASEAN," said Dave Murphy, Publicis Sapient executive vice president and head of Financial Services for Europe, the Middle East and Africa, and the Asia Pacific.

Despite being a mature banking market, he said Thailand had untapped potential, particularly among the rural population and the unbanked.

Forward-thinking banks have a unique opportunity to reach out to these underserved segments with tailored digital solutions that address their specific needs, he added.

In terms of digital transformation in the banking sector across ASEAN, he pointed out that several countries are similar to Thailand, albeit at different rates. Singapore stands out for its advanced fintech ecosystem and progressive regulatory landscape, which promotes innovation in digital banking.

Meanwhile, Malaysia and the Philippines are rapidly adopting digital banking solutions, owing to their large populations and growing middle-class segments. Vietnam also presents a promising market for digital banking, thanks to rising smartphone penetration, a young, tech-savvy demographic, and a thriving neobank landscape.

Publicis Sapient, which is part of Publicis Groupe, is a leading global digital consultancy that helps large enterprises, like Goldman Sachs, Marriott and Walmart, transform digitally. It has 20,000 employees and over 50 offices worldwide.