RCBC Achieves Reliability, Stability, and Business Growth with Red Hat Enterprise Linux

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October 7, 2013

Rizal Commercial Banking Corporation (RCBC) needed to overcome the constraints of its legacy system, which hampered the bank’s business growth and customer service activities.

Customer: Rizal Commercial Banking Corporation (RCBC)

“We are impressed with Red Hat Enterprise Linux’s stability and reliability and its ability to run our banking applications efficiently.” - Jennie Lansang, Chief Technology Officer, RCBC

Geography: APAC
Country: Philippines


Business Challenge:

Rizal Commercial Banking Corporation (RCBC) needed to overcome the constraints of its legacy system, which hampered the bank’s business growth and customer service activities.

Software:

Red Hat® Enterprise Linux®

Hardware:

IBM z10 mainframe server

Benefits:

Since the technology transformation, which included a new core banking system running on Red Hat® Enterprise Linux®, RCBC has improved IT efficiency and can support business growth and better adapt to industry changes.

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Background:

Rizal Commercial Banking Corporation (RCBC) is a leading, private bank in the Philippines with assets of more than US$8 billion, more than 400 branches, and a network of approximately 1,000 automated teller machines. The bank’s more than 5,000 employees serve retail, corporate, consumer, small and medium enterprises, and microfinance clients nationwide. Its long-term business goals include becoming the Philippines’ most admired and trusted financial services group and increasing shareholder value. The bank also aspires to have 10 million new customers by 2016—up from its current customer base of 4.04 million.

Business Challenge:

Aging core business system hampering business growth

RCBC has been dependent on its core banking system running on IBM mainframe to support its banking operations for more than 20 years. The aging system could not cope with changing business requirements, which hampered business growth and customer service activities.

Prior to deploying the new core banking system which runs on Red Hat® Enterprise Linux®, it took 10 months for the bank to generate new account numbers for the main business center.

In addition, new deposit products often required application development because of unavailable features, taking up to 167 days to develop. Changes in withholding tax rulings took four months to complete.

Automating end-to-end processes such as credit and loan management and cross-institutional deposits became increasingly complex and time consuming.

Solution:

Selecting a solution

To overcome these technological constraints, the bank looked for a solution that could integrate functionality, including credit approval, loan documentation, central liability, customer information, bill purchase, trade services, and loan origination, into one system that could be used across RCBC and RCBC Savings Bank, its retail banking subsidiary.

RCBC needed to replace its core banking system to support its long-term objectives of further enhancing its position as one of the leading universal banks in the Philippines, and increasing shareholder value.

The bank needed a technology solution that could:
• Provide more accurate and real-time data
• Quickly launch new products
• Adapt to customer requirements
• Enhance customer service through seamless system integration
• Handle a larger volume of transactions and customers

RCBC wanted a highly integrated, core banking solution with features covering deposit, customer relationship management, teller, loan, and trade and general ledger modules.

These functionalities needed to be migrated to a high-performance, secure, scalable machine in a stable and modern IT infrastructure.

After careful evaluation, RCBC picked a core banking solution that ran on Red Hat Enterprise Linux.

Benefits:

Easy to deploy and use, stable, reliable

Red Hat Enterprise Linux is very easy to use and deploy and RCBC took just under two weeks to install 10 partitions of the bank’s IBM mainframe.

The new solution has also been running smoothly since its implementation.

“We are impressed with Red Hat Enterprise Linux’s stability and reliability and its ability to run our core banking applications efficiently,” said Jennie Lansang, chief technology officer, RCBC.

Open, secured and portable

With Red Hat Enterprise Linux supporting the core banking system, RCBC is now able to grow and adapt to changes without technological constraints. For example, the logic was removed from the generation of account numbers because of the new solution, enabling new numbers to be created easily.

Generation of new account now involves just changing a parameter setting in the new system. New products being developed mostly require just parameter definitions. If the features required are already pre-existing in the system, then it is just a matter of parameter definition and testing.

Automation of end-to-end processes can be done easily without the need to create new procedures. In addition, the deployment of applications takes just three days instead of one week.

Based on open standards, Red Hat Enterprise Linux gives RCBC a secure and cost effective platform that is portable across multiple hardware platforms.

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