Yorkshire Building Society (YBS) is setting up a Shared Services Alliance with HP. The alliance is intended to attract other building societies and banks and deliver shared economies-of-scale savings for data centre provision, services management, app development and client support services and back-end processing using the HP virtual cloud platform provided by the HP Enterprise Services UK unit.
The Shared Services Alliance aims to provide UK retail banking operators with a common back-end cloud computing platform run by HP. It can easily host any core retail banking application, such as mortgage and savings account processing, regulatory reporting, business intelligence (BI) systems and so forth, allowing aging siloed internal IT architectures to be put to rest.
YBS is the first to benefit from the partnership, in which it is a key player as an existing IT provider to other smaller players via its Yorkshire Key Services subsidiary. It will provide application software expertise, regulatory compliance and FS knowledge, while HP looks after the core banking software and services needs of Alliance customers.
The building society is abandoning its own internal IT infrastructure to seek economies-of-scale cost savings and instead focusing on developing its own front-end customer facing applications in future. The link-up is expected to allow the building society - the second largest in the UK with $45bn of assets - to increase its agility and new product speed-to-market; benefits which others joiners could share in as processing duties are effectively outsourced.
No additional newcomers have joined the Alliance as yet but YBS has long been an advocate of shared IT services for the building societies sector - as its Key Services subsidiary proves - so some announcements can be expected in the near future.
“The flexibility to meet ever-changing market needs and customer expectations presents major challenges for any organisation, but especially financial institutions,” said David Henderson, general manager, group change and chief information officer (CIO), Yorkshire Building Society. “Although the Yorkshire is already a successful provider of IT services through our Yorkshire Key Services subsidiary, this cloud-based Shared Services Alliance will offer a new way of working for the UK financial services market by moving away from a capital model to a service model, reducing costs and time to market.”
According to Jeremy Suddards, vice president, Financial Services Industry, HP Enterprise Services, UK&I, becoming more customer-centric while driving down operating costs is no longer a choice for retail financial services institutions: “it’s essential to survival. The key to success is to leverage the latest technology to deliver real value and the ability to adapt rapidly to change.”
By Neil Ainger