ELITE 8 2012: Michael Redeker Implements a New Core System with a 'Big Bang'

The potential implications of core systems replacements are so vast that most bank CIOs opt to mitigate the risks by taking things slowly and cautiously, converting one piece of the business at a time. But when it came to replacing his company's legacy core systems, Michael Redeker, CIO of ATB Financial (CD$32 billion in assets), knew caution would impede the bank from achieving the goals of the initiative.

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So when the Edmonton, Alberta-based bank began reviewing options and potential technology partners, the question was, "What was the most effective way we could go through that process, and how would we assure a viable solution at the end of the journey?" Redeker recalls. As the RFP process began in 2007, the bank decided to go with a "large footprint" -- an end-to-end solution from a single vendor. This would help ATB Financial avoid replicating the legacy "bowl of spaghetti" that had resulted from years of add-ons and updates. "We wanted a core application that ran our organization," Redeker says.

In 2008, ATB Financial selected SAP's core banking solution -- making it the first bank in North America to implement the system, according to Redeker. "They had a solution we could add on to and mature as an organization," he relates.

But it wasn't just the scope of the technology that was unique. ATB Financial implemented the new core system "with a big bang," Redeker says. "We decided to do everything at the same time. We converted all customer records, all of our financial records, a full cutover of our suite of applications … on one weekend."

Not that it was easy. In the initial months after the system went live in September 2011, Redeker acknowledges, there were challenges around system stability, data conversion and the ability of the bank's employees to use the new tools. Knowing that such an aggressive rollout inevitably would encounter glitches, Redeker and his team relied on communication to get through any rough spots. "This was a large, complex implementation, but what made it successful is the collaboration among the folks across the organization, to continuously focus on improving the stability and improving the tool for our associates and what we were delivering back to our customers," he says.

Another success factor was the "very transparent conversation," the bank had with its 700,000 customers during the migration. "We were very open and honest with them" in communicating the difficulties of implementing the new system, Redeker notes. "We said, 'We know we're going to have some challenges, but trust us, we'll be there for you.' That ... really afforded the technology team the time to fix the issues once we went into production."

Asked why the bank committed to a game plan fraught with potential risks, Redeker concedes, "I will be honest -- as the CIO, I was very nervous about going down this path." But the anxiety and hard work have more than paid off. "Having gone through this, I am actually a big fan of what we accomplished," he says. If the conversion had been approached function by function, "It would have been a seven- to 10-year journey and significantly more expensive than the big-bang approach." Instead, ATB Financial was able to reap the benefits of its "tightly integrated solution" in a relatively short period of time.

The project also involved significant infrastructure enhancements, Redeker points out, and occurred at the same time as replacement of 75 to 80 percent of the bank's application suite; an IVR upgrade; and build-out of its disaster recovery site. "We truly transformed the entire organization," he says. "I'm quite proud of the team and what they accomplished in the past three years."

Speed-to-Market Improvements

ATB Financial already has seen significant benefits from the new core, including improved speed to market. "We were actually able to roll out a mobile app five months after we went in production," Redeker reports. "We are able to roll out new products in days versus our old legacy systems that would have taken weeks," he adds. "We are able to make changes much more frequently and get the benefits of those changes in a much shorter timeframe."

But this is just the beginning, according to Redeker. "We've just scratched the surface," he says. "Once we learn more about what the solution can do, it will help continue the transformation of our organization and how we provide services to our customers."

The scope of ambitions for the new core system are in line with the mission of IT at ATB Financial. "Our role is to roll out the most advanced technology, which enables our customers and our associates to connect and complete banking transactions for the benefit of our shareholders and our organization," Redeker explains. "We need to implement and support world-class solutions that enable our associates to be successful with our customers." And those customers must be able "to do their banking as seamlessly as possible -- they don't notice the technology, they just know they can comfortably bank with us."

Technology also is the enabler of ATB 2.0, a strategic framework that defines the bank's goals and how it intends to achieve them. But, Redeker emphasizes, it's more than a traditional mission statement. "We're changing our world by putting people first and making dreams come true," he says, explaining that this means helping customers meet their objectives. By doing this, "We'll ultimately create value for our customers as well as for our associates."

This aligns with the bank's three strategic goals. "We want to be first in every market we choose. We want to be the place to work. And we want to be loved by all Albertans," Redeker explains. The foundation of these aspirations are four strategic pillars: leadership, innovation, process and understanding. "As the CIO," Redeker says, "I look at each one of them, and make sure I'm partnering up with our line-of-business heads to make sure we're executing collaboratively in each of these strategic pillars, so we can collectively achieve the dream of ATB 2.0."

Elaborating, Redeker says, "Understanding is knowing everything we can about our customers and our associates, so we get the most value out of our team, as well as the best services we can provide to our customers." He explains that this accomplished with technologies that include big data, data mining and data warehousing "that provide the information and … understanding of all our banking transactions, all the data we utilize around our banking activities, as well as around our customers."

Process is about streamlining transactions and improving efficiency ratios. "Every banking transaction runs through IT. We need to work effectively with the business units to define what processes they have, and how they leverage the technology effectively from end to end," Redeker says. Meanwhile, leadership encompasses everything from implementation of the SAP core banking solution to executive development.

Regarding the pillar of innovation, Redeker says, "It's not about looking at the next shiny object and saying, 'Here's what we think we want to do,' but actually transforming your organization -- how it utilizes technology for the betterment of our customers and our organization." According to Redeker, the IT organization plays a key role making that happen by partnering with the bank's innovation center to manage the risks of innovation and by testing leading-edge solutions, such as the new core banking system.

"It's a passion to continuously improve and think out of the box," Redeker continues. "We want to change, we want to continuously improve, we want to make a difference and be relevant."

Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio