Core banking replaced with Islamic banking

LONDON: Albaraka Bank Limited, the South African subsidiary of Bahrain-based Albaraka Banking Group B.S.C. (ABG) last year initiated an intensive project to replace its core banking system with the Equation Islamic Banking and Branch Automation System from Misys Plc.

The multi-million Rand IT solution is stated to be in line with the bank's holding company's strategic direction.

Commenting on the systems change, Albaraka Bank's Information Technology Manager, Naushaad Khan, said: "The acquisition of the Equation Islamic Banking and Branch Automation System was the result of the existing core banking system, which supported our business requirements, having reached the end of its life-cycle. Importantly, we have identified tremendous opportunities for leveraging the functionalities and systems automation offered by Equation in terms of Islamic banking, which will contribute strategically to the bank's competitive edge."

The bank's equation project was launched towards the end of 2008, with phase one implementation taking place during the second quarter of this year. Phase two will follow later this year once the core systems have been successfully bedded down.

ABG, an Islamic banking group with units in 12 countries and a global branch network of some 300 branches, is rolling it out to select ABG subsidiaries around the world, inclusive of the South African banking operation, shares a latest press update.

With dramatic increases in the cost of doing business during recent years, Albaraka Bank's migration to the Equation banking system will realise a reduction in business costs through the automation of processes and the attendant positive contribution of operational efficiencies throughout the bank's business environment, adds the press release. In addition, it is anticipated that the system's Relationship Management tools will enable staff to enjoy a 360 degree view of customer profiles and dealings with the bank.

Albaraka Bank Limited was established in 1989 and has pioneered Islamic banking in South Africa as an alternative to conventional interest-based financial services provision and is the country's only fully-fledged Islamic bank.