Yorkshire paves a path in shared services with HP alliance
While global international banks dream about creating shared industry utilities to reduce cost and risk, a decade-old model established by the UK’s second largest building society is being moved to a modern delivery platform managed by HP.
Since the turn of the century, Yorkshire Building Society has offered its own platform to other building societies and currently has three others using the platform.
The society has today announced it has established a Shared Services Alliance with HP Enterprise Services UK to offer the service to a wider range of UK financial services institutions.
“Although the Yorkshire is already a successful provider of IT services through our Yorkshire Key Services subsidiary, this cloud-based Shared Services Alliance will offer a new way of working for the UK financial services market by moving away from a capital model to a service model, reducing costs and time to market.” said David Henderson, general manager, Group Change, and chief information officer, Yorkshire Building Society.
Henderson said that Yorkshire had always had interest from other potential users of its system, but “we are not primarily a software and IT supplier” and had felt it necessary to turn them away, so the concept of working with a partner had been born.
At this stage, Yorkshire and the three existing users of the system provided by Yorkshire Key Services, will not be moving to the new platform. Henderson said that it would continue to operate its own data centres. The deal allows the society to diverge from the version of the platform that HP will develop, but in practice he says that this is unlikely.
The deal with HP means that new users can be supported by the new delivery mechanism, which is built on HP Enterprise Cloud Services – Virtual Private Cloud, part of the HP Converged Cloud portfolio. This will provide Shared Services Alliance customers a cloud services platform with data centre, service management, application development and client support, while Yorkshire will contribute its core application software, industry expertise, regulatory compliance and financial services knowledge.
HP, supported by the Yorkshire, will deliver fully-hosted core applications for retail finance services. Services will include a mortgages and savings solution, regulatory reporting, business intelligence and business process outsourcing. HP will develop the additional software and services.
Jeremy Suddards, vice president, Financial Services Industry, HP Enterprise Services, UK&I, said that users will be able to use the component nature of the platform to add additional services onto the basic banking functionality. “There’s no reason they couldn’t add credit cards or other services,” he said.
Suddards said that “driving down operating costs is no longer a choice for retail financial services institutions – it’s essential to survival”. While HP also works with the large international banks, there are opportunities for mid-tier institutions to take advantage of the cost savings shared services can offer. It is a model that is routinely used in the Nordic and Central and Eastern European regions, he added.
Neither party would disclose details of the deal, which has been under discussion for more than a year, with final contracts signed in July. HP staff are currently working with Yorkshire on transferring knowledge across. Suddards said that the partners hope to announce the first new customer later this year.