Special Supplement: Core Banking - Economies Of Scale - M&A Considerations, Namely Cutting Costs, Are Becoming A Major Driver For Core System Replacement. Heather McKenzie Explains.(TowerGroup)(EFG Private Bank)(Company overview)

Banker, The, May, 2006 by MCKENZIE, Heather

Byline: Heather MCKENZIE

The impact of technology on a merger or acquisition is not considered as much as it should be, according to Robert Hunt, senior research analyst at US- based financial industry research company Towergroup. He says: "When an acquisition or merger takes place, the organisations will look at the customer base and the market potential, but technology is only brought into the equation at the end."

This is a mistake, he adds, because banks with older, legacy core systems will find it difficult to merge operations. "Many of the older core banking systems don't have good documentation and the databases are not relational.

"Sometimes the documentation with older systems is so weak it is difficult to ensure that a conversion...

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