Keytrade Bank is moving from legacy core banking technology to a cloud-based platform from Infosys’s Finacle subsidiary in a move that will help it “leapfrog” in-house development.
The Benelux-based online bank, with operations in Belgium and Luxemburg, is replacing its legacy core banking system with Infosys Finacle’s core banking software as a service, hosted in the public cloud with Microsoft Azure.
Part of French banking group Credit Mutuel Arkea, Keytrade Bank has about 130 staff and is headquartered in Brussels. The bank’s CEO, Thierry Ternier, said: “As the sponsor of the project, I am a strong believer in the programme because it will strengthen the foundations of our company and make us future-proof to tackle the challenges of a fast-moving environment.
“Our ultimate goal is to create value and satisfaction for our customers and employees. I am convinced that this programme will be a major enabler in reaching those strategic goals.”
The deal is further evidence of the growth of India-based IT services firms on the European continent. Sanat Rao, global head at Infosys Finacle, said the deal was another milestone in the Indian IT services giant’s expanding presence in Europe, claiming “it underlines our commitment to helping European banks stay ahead in the digital age”.
Legacy core banking systems are increasingly being replaced by cloud-based alternatives, with huge cost savings when compared with maintaining in-house core banking systems. The retirement of legacy core banking systems was discussed for years before cloud computing technology came along and finally started the process.
Banks are rapidly moving to cloud-based core systems as fintech competitors eat into their market share. These challengers are cloud native and able to operate at lower cost than those banks using traditional banking systems. While large banks can afford to invest in the cloud technology and skills required to keep pace with digital change in the banking sector, smaller banks, such as Keytrade Bank, with limited resources, are choosing cloud-based software-as-a-service options.
Last week, Swedish bank Ikano announced it was moving to a cloud-based core banking system from another Indian IT services firm, Tata Consultancy Services. Ikano moved to the TCS software so it could standardise its core banking system across the multiple European countries it operates in. The use of different core banking software in each country resulted in “siloed operations, inconsistency in customer experience and risk management pressures”, according to the bank.