A large-scale system change is coming at OTP, here are the expected changes

OTP Bank is replacing its basic system, which forms the backbone of the bank’s IT architecture. According to expectations, this means that new products can be introduced more easily and quickly, the customer experience can improve, and background processes can run more efficiently. Customers can perceive the first results of the large-scale project with significant investment costs as early as 2025. We asked the bank and the supplier about the details of the project and the expected changes.

A system change is coming at OTP

OTP Bank is transforming its entire account management and lending system, which covers current and savings accounts, deposits, cards, payments and lending for retail customers and small and medium-sized businesses. In addition to the development of products, the new basic banking system also enables the improvement of architecture and back office processes – we learned from OTP Bank.

The financial institution is introducing a system called “IDC & Digital Lending” from an IT company founded in India, Intellect, which is based on an infrastructure called “eMACH.ai”, also supplied by them. According to the supplier, the new system is event-driven, microservice-based and API-compatible, and also uses cloud-based artificial intelligence models. “Intellect is a global player in the development of the technological background of banking, insurance and other financial services. It has 25 offices in 50 countries and more than 270 customers, and its products are present in Europe, America and Asia,” Rajesh Saxena, Intellect Global Consumer Banking, told our newspaper. , CEO of Intellect Design Arena.

What is the basic system and why should it be replaced?

Bank account management systems form the backbone of every bank’s architecture, as they integrate the operation of several business branches, while the stability of solutions in different customer segments also depends on them. Therefore, it is critical that such an integrated system is up-to-date, characterized by the latest technology and product capabilities, meets safety and regulatory guidelines, and is able to meet diverse innovation needs, as well as scale rapidly in parallel with growing customer needs. CAPEX can be reduced, efficiency can be improved and profitability can be increased by properly transforming the basic banking systems .

The financial institution explained to our paper that they want to make the basic architecture more flexible and scalable, which also enables greater availability. The current account management systems have been draining the bank for 20-30 years, but during this time not only the age of the support teams has changed, but also the challenges of technology and the business environment. “Together, these justified the formulation of strategic goals that can ensure the bank’s long-term competitiveness,” they added.

Exactly how long the project will take and how much it will cost the bank is a trade secret. But to our question whether the new or the old system will be cheaper to operate, they answered that it is difficult to compare the costs of the previous monolithic systems with those of the new solution, since digitalization significantly transforms the boundaries and expectations of applications and business processes.

Overall, the introduction of the new system, with its innovative options, rationalization of the architecture, scalable infrastructure and the ability to automate, aims to achieve a simpler and more cost-effective operation

– said Péter Csányi, Deputy CEO of OTP Bank, Head of the Digital Division.

What changes are coming?

The new base system can bring the following benefits:

• supports the bank in the introduction of innovative products and services through a platform built from reusable components, which provides access to ready-made and ready-to-use elementary services, business components and events;
• in addition to ensuring a high level of customer experience, market opportunities can be expanded with a marketplace providing composite functions tailored to countries,
• increasing the efficiency of the bank’s employees with cross-product workflow support and rule-based business parameterization;
• providing an infrastructure background that can be expanded depending on traffic and load using a cloud-native platform .

Artificial Intelligence

The new base system offers more artificial intelligence-based embedded functions. Typically artificial intelligence

• real-time credit assessment,
• customer-based behavior modeling (eKYC),
• used in the field of migration forecasting.

The IT supplier is investigating together with OTP Bank how and to what extent these capabilities will be integrated into the new account management system. In addition to all this, the capabilities of the system are being developed in the field of generative artificial intelligence.

Shorter time-to-market

According to the vendor, the bank’s business product managers will be empowered to define, refine and manage various business rules, workflows, fees, interest rates, exemptions, among other things, without relying on IT support and technology partners. This allows business product managers to launch or refine products based on their priorities, eliminating waiting time.

In the case of deposits and loan products, product settings typically involve several systems, but in the account management and lending base system itself – depending on the nature and depth of the work processes – it only takes 30-60 minutes.

According to the vendor, the new system has “integration and orchestration capabilities that simplify integration differences using open standards-based adapters and streamline end-to-end testing with built-in mock capabilities. These drastically shorten the overall time-to-market process for compared to a traditional account management or lending base product based on a traditional technology stack”.

Agile architecture

The agile organizational structure and the agile methodology are already well known from the past years, the essence of which is that by breaking down organizational silos (departments, departments), certain projects are carried out as equal partners in agile teams with clear deadlines, clear tasks and responsibilities, in a traceable manner.

The architecture of the new system will also be agile, so we asked what we mean by that. According to the delivery company, agile architecture allows business capabilities to be assembled and expanded as desired with full flexibility. This allows the bank to respond to changing business needs more quickly. This typically requires that the IT environment is scalable, configurable, customizable, composable, extensible and based on open standards.

Source: www.portfolio.hu/bank/20240202/nagyszabasu-rendszercsere-jon-az-otp-nel-ime-a-varhato-valtozasok-666831

For Media related info, please contact:  Nachu Nagappan Intellect Design Arena Ltd Mob: +91 89396 19676 Email: nachu.nagappan@intellectdesign.com

For Intellect Investor related info, please contact: Praveen Malik Intellect Design Arena Limited Mob: +91 89397 82837 Email: Praveen.malik@intellectdesign.com