Platform for growth

Riyad Bank of Saudi Arabia has adopted a new payment processing platform to help it deal more flexibly with the demands of new products. Daniel Stanton reports.

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By  Daniel Stanton Published  October 2, 2006

|~|riyadbanktwo200.jpg|~|Isted and Fourie: Riyad Bank wanted a more functionally rich platform and to become more flexible when developing products.|~|Riyad Bank is one of Saudi Arabia's largest providers of Islamic and conventional banking products, so it needs to be able to process payments reliably and cost-effectively.

In common with many other banks, an outside firm processes many of its card transactions, but the system it previously used was based on the processing cycle for Western banks, which was far from ideal for the Middle East.

Last year, Riyad Bank made the decision to switch to VisionPLUS, the strategic processing platform of First Data International, which is a leading provider of electronic commerce and payment solutions for financial institutions and merchants around the world.

Stuart Isted, senior account manager, First Data Middle East, says: "One of the major issues we had is that the Riyad processing platform was a UK-based platform, so Monday to Friday, nine to five. That was always going to be an issue. So when we put together our strategy, this was based around VisionPLUS and was also going to be UK-based but offering Saturday through to Friday processing days."

Chris Fourie, operations manager, consumer finance department, Riyad Bank, was involved in the implementation, which went live in May this year. He says that the bank had many reasons for changing its system, and for choosing First Data in particular.

"It was basically a more functionally rich platform that First Data presented to us," he says. "It also helped us with overcoming some of the shortcomings in the previous system, so from both a functional and a shortcoming perspective it made sense for us to move across to the new platform."

There were several drawbacks with the old platform, Fourie explains. "The major ones were the time it took on the old system to implement new products," he says. "It was far more rigid in the way it set up new products for development, whereas on the new one it's more flexible, more parameter-driven."

With Riyad Bank aiming to expand into a range of new and varied products in both the Islamic and conventional banking sectors, any system needed to be able to cope with the offerings the bank may come up with in the future. While it may be hard to calculate the return on investment for a project like this, the extra agility the bank now has is invaluable.

"The other problem also had to do with inherent shortcomings in terms of field values. We could not, for example, process large monetary value items - they had to be split into different items," Fourie continues. "Now VisionPLUS allows us to do all of those things."

Although the switch from one system to the other took place over a single weekend, the planning behind it took nine months, including training for the staff who would be using the system. ||**|||~|riyadmain200.jpg|~|Fourie: The new system is doing exactly what he wants it to do.|~|"I was pleasantly surprised how quickly the staff took to it and how quickly they became the masters of it," says Fourie. "We had lots of training. There was a whole change management process that we put in and it consisted of general classroom training, training alignment sessions, key meetings, one-on-one meetings, detailed training for specific areas.

"This was an ongoing process in the background. We used a train-the-trainer process, where we trained specific people in specific areas to became experts and they then retrained their areas. It was very successful," he says.

The implementation itself went smoothly and did not require Riyad Bank to upgrade any of its hardware. "Basically, all we had to do was change the interfaces and our processes," says Fourie.

"It's taken us a while to settle it down, but it's doing exactly what we want it to do. I know that our marketing department is looking at some additional products in the near future - they're definitely starting to make use of the flexibility of the product.

"The main benefit is the six day processing so we know we won't be on a Monday to Friday processing cycle. That has really brought benefits to us in terms of aligning the product to the way we would like to do our business today," he explains.

In addition, he believes the platform's greater flexibility will put the bank in a position to be able to develop new financial products at a lower cost, and with a quicker time to market.

One of the products on the horizon will see Riyad Bank develop and introduce an Islamic bank card. It will be the first new product to be put onto VisionPLUS since its implementation. However, Fourie believes that VisionPLUS is well-equipped to handle the demands of such a development.
Again, the flexibility of the platform helps make the implementation less demanding of time and effort.

"Customisation to implement an Islamic credit card does not require hundreds of hours' worth of development," says First Data's Isted. "It's all down to parameterisation, so the system is actually available for the client to manipulate the parameters, put it through a testing programme, and of course if it needs to be Shariah-compliant it goes through the bank's internal Islamic procedures.

"All of our products are Shariah-compliant and all of our products can issue Islamic credit cards, so by using the core functionality we haven't needed to go down the customisation road. This is critical for our clients especially when we talk about launching a new Islamic product. We don't have to deal with that customisation and it won't cost you any money, apart from business as usual, and that's great news in a specific platform."

First Data and Riyad Bank have worked in partnership since 1994, and recently announced that they would continue their alliance for a further five years, with First Data to provide additional services. During this time, First Data will process both Visa and MasterCard credit card portfolios for Riyad Bank, in addition to providing secure PIN print and mail services.

Adnan Al-Joyan, senior vice president, retail banking services, Riyad Bank, says: "The new platform will enable Riyad Bank to offer an extended suite of financial services products and will support new customer acquisition and cross-selling to our existing customers.

"We are dedicated to delivering first-in-quality and first-in-value services in Saudi Arabia, and First Data is the partner we can trust to provide reliable, high quality services that enable us to deliver what we promise to our clients."||**||

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