30 March 2007

For any business, rapid expansion is a dream come true – but if its technology can't support that growth, then what seemed like runaway success can become a nightmare of failed expectations. When DenizBank faced this double-sided issue, it realised that in order to support expansion, it needed to migrate its core system.

Based in Istanbul, DenizBank originated as a state-owned bank in 1938, recommencing operations a private entity after Zorlu Holding acquired it from the Turkish Government's Privatisation Administration in 1997. Now part of European financial group Dexia, DenizBank has grown to become one of the largest private banks in Turkey, offering a wide range of financial services. The past nine years have seen its expansion to 256 branches employing over 6,000 people, with assets of $9 billion (€7 billion) as of September 2006.

"We started from scratch in 1997 and we've grown very rapidly," says Dilek Duman, chief information officer of DenizBank and chief executive officer of its daughter company Intertech. "We were using a Unix operating system with the Adabas database for our core banking system, but as we continued to grow we found there were some performance issues with this system."

The key problem was the system's scalability – if it could not keep up with the bank's expansion, it would not be able to support business growth. DenizBank is one of 13 affiliates that constitute the DenizBank Financial Services Group, which is guided in its growth by four basic principles: ·Maintaining a disciplined credit culture and effective risk management ·Keeping costs under control ·Marketing concept focused on customers and niches ·Viewing distribution channels as portals to enhance the customer experience.

In addition, DenizBank wanted to quickly provide customers with new products. These customer-focused principals could not be maintained as the bank expanded because the core system could not provide the necessary combination of flexibility and consistency. "The Unix system was transactional-based, and worked like a calculator," says Duman. "But today, it's important for the business to automate these processes. We wanted to design a new banking platform that would not only cover core banking, but would also provide all the applications the bank needed – the business process management (BPM) concept."

In order to automate processes and help bring new products to market faster, DenizBank was using more Windows-based applications and servers. But the Unix-based application could not easily integrate with these. As the use of Windows grew, the system became more difficult to maintain and the Unix system had difficulty in running end-of-day and end- of-month operations within allowable timeframes.

DenizBank realised that in order to continue growing while maintaining its standards, it needed to upgrade its core banking and supporting infrastructure. "We decided to use in-house development," explains Duman. "When we started in 1997, there was some outsourcing. We bought different software from other companies and integrated it. But it's very difficult to manage the outsourcing of core business. Core banking is very specialised for a bank, and outsourcing it created difficulties for us – so we decided to bring it in-house at the start, in order to speed up development."

The new solution needed to help DenizBank provide a single, unified banking platform to serve all distribution channels, including branch offices, kiosks, ATMs, Internet banking, interactive voice response call centres, and mobile solutions. In addition, it needed to enable the agility the bank needed to respond quickly to market opportunities, while supporting high-volume transactions with low latency and enhancing data management.

Intertech is the daughter company of DenizBank. We work with Intertech to handle all our IT issues," says Duman. "Whether it's operations, software, development or outsourced management for IT, everything is included."

DenizBank worked with Intertech to create the Intertech Financial Advanced Computing Environment (inter-F.A.C.E.), a new banking system that would replace the old UNIX-based application.

So the two companies went to work with the aim of building the new banking solution. "Once we had decided to develop a banking platform, the first step was to analyse the options," explains Duman. "Initially, we looked at three solutions – Intertech has another solution, which is based on Oracle technology, so we did some performance tests with that. We also looked at an Oracle Unix solution, but our tests found that the performance of these solutions would not be sufficient for the future growth of the business."

Another option was to develop the system using Microsoft technologies. Both DenizBank and Intertech were already impressed with the performance of Microsoft products in other areas of the bank's operations, and they were also aware that integration would be easier with Microsoft. In addition, the products outperformed the other technologies that the bank considered.

The inter-F.A.C.E. solution was therefore created in a development environment consisting of the Microsoft Visual Studio 2005 development system and Microsoft .NET Framework version 2.0. It uses Microsoft SQL Server 2005 Enterprise Edition (64-bit) for its database, running on the Windows Server 2003 Enterprise Edition (64-bit) operating system.

Analysis began in April 2005, and coding was started in June of the same year. Intertech set up a team of around 30 software developers and ten analysts, all with expertise in creating banking applications. It took them just five months to complete the new cashier application, which Intertech began rolling out to branches in November 2005.

"After the coding, we did a performance test at Microsoft in Seattle, and saw that we could handle one year of DenizBank's transactions in just eight hours," Duman adds. "It was unbelievable. This made Microsoft the obvious choice of platform for continued growth."

This initial rollout was only the start – DenizBank had chosen its technologies to enable ongoing development, creating an infrastructure that would support the entire banking system. "We started with the cashier screens," says Murat Tekcan, manager of the alternative distribution channels at Intertech. "But while we were working on them, we also developed the accounting infrastructure, account infrastructure, and in fact the infrastructure for the whole banking system."

This included customer definition and relation management, teller transactions, deposits, utilities payments, and relevant management information reporting. Further inter-F.A.C.E. modules include consumer loans, corporate lending and financing, contracts and collaterals, sales force applications, foreign exchange transactions and SWIFT integration, treasury, trade finance and risk management. As more applications are developed and rolled out, DenizBank continues to use is older Quantis application in parallel with inter-F.A.C.E.. The final inter-F.A.C.E. modules are due to be deployed in mid-2007, when the old system will be unplugged.

The benefits associated with the solution are exactly what DenizBank wanted – the technology is easily integrated as new functionalities are added to provide a single, unified banking environment that is agile enough to respond to changing demands and market condition. It has resulted in a better experience for both customers and bank staff.

"We are really happy with the system," says Duman. "The end users are very happy with its performance now, and as we add more functionality to it, they are also very happy about that. The user interface looks like Windows, so they know how to use the system and they don't need to be trained up. It's a very people-ready system."

Tekcan adds: "We've made work easier for our cashiers, which translates into a better customer experience. With the old system our cashiers had to work with one user interface to access customer information, another interface to work with banking information, and a third if they needed to access documents. Today, we have migrated all of the banking screens to the same inter-F.A.C.E. infrastructure. Branch offices can now serve all of the customer's needs from a single integrated user interface, which means customers get what they need faster than before."

This means that customers are getting products and services that are more tailored to their needs. But with a more efficient development environment, DenizBank can look beyond its core banking functionality. The new infrastructure supports the bank's existing distribution channels such as branch offices, kiosks, Internet banking and interactive voice response at call centres while making it easy to add new applications.

"The core development with .NET is very efficient, so we can develop very quickly," explains Duman. "It's now nearly 18 months since we started this project, and 70 per cent of DenizBank's transactions now come from this platform. But the range of applications doesn't end with core banking. We're also building a new framework for our distribution channels, which greatly improves our ability to respond to market opportunities."

As DenizBank continues to grow, it need not worry about supporting high- volume transactions – once all core banking is supported by SQL Server 2005 and inter-F.A.C.E., it will be able to support some 530,000 business transactions per day. Inter-F.A.C.E. is already supporting teller activities at all branches of the bank, and can easily handle all online transaction processing loads while being easily scalable to support future growth. Using the old system, end-of-day processing currently takes around six hours, but SQL Server 2005 will radically reduce this.

Key to ensuring optimal performance for the bank is the ease and efficiency of data management, and the Table Partitioning feature of SQL Server 2005 has improved this, enabling DenizBank to partition its largest table with a monthly sliding window to ensure ease of back-up and restoration of historical data, fast data deletion and data load, and minimal index fragmentation for historically-partitioned tables. This means that querying a single partition involve accessing less data than before, and the feature also makes it easy to seamlessly access archived data.

"We're exposing all of our data through the same interfaces and the same application," says Duman. "That's a very big benefit, and with Database Mirroring, we have the opportunity to keep a really hot standby. The combination of Database Mirroring and our clustering gives us the best of both worlds. We like the idea of combining different high-availability technologies into an integrated plan."

The future of retail banking lies in agility, and that comes from having the ability to integrate technologies, services and channels as and when needed. As DenizBank prepares to continue its record of rapid growth, its new solution has enabled a single view of the customer, integrated into a unified interface, along with the responsiveness that comes from the fast development and integration of new products. And as the banking industry develops and new channels emerge, it will be able to integrate these without breaking its stride.

"This solution also enables cross channel delivery," concludes Duman. "We have a channel layer so we can manage all the channels and provide the same service levels for all our customers at any point of contact. We'll also be able to integrate new channels as they emerge, because integration is extremely easy using .NET technology."