CIMB Technology Has the First-Mover Advantage. From the perspective of super-regionalization, RHB has recently been making good on its promise to grow beyond Malaysia, with forays into north-ASEAN (Thailand and Cambodia). However, it has not rolled out a project in the mould of CIMB's 1Platform, thus making the latter the only feasible, plug-and-play candidate for the common core system of the new entity.
CIMB's sustained technological leadership also provides an invaluable repository of skill sets in innovation, and more importantly, the deployment of innovation to the mix. Perhaps the best way to measure the worth of such an advantage is to realize that it took three years ('only three years' or 'three years too long' is another debate) since the bank's last major restructuring exercise in 2006 before any semblance of a coherent product and IT management framework was seen - though the subsequent success stories are, as they say, history. IDC Financial Insights see that these years-spent will translate to years-saved for the merged organization.
Business/Technology Synergies Abound. The three parties involved have suitably different technology successes and aspirations. CIMB has also been recognized for diverse initiatives in digital banking, social media ("social banking" is their term), mobile account origination, low-dependency transactions, card-less withdrawals as well as integrated online banking.
Meanwhile, RHB Capital has seen, in turn, the region's most successful IT-enabled growth stories in the past five years. 'Easy by RHB' which was a mass market banking proposition was a feat attained through the use of low-maintenance branch models, revised account creation workflows, and competitive loan pricing. Its other investments in consumer banking (particularly in cards and payments) also paid dividends. MBSB, on the other hand, is a well-diversified financial service provider, with strengths in property financing and corporate/wholesale banking - but without the high-profile technology successes of the other two players in the deal.
Bearing such diverse portfolios in mind, it is easy to extrapolate that the post-merger company will be a universal bank with multiple competitive advantages in strategic segments. On the other hand, more prudent observers may speculate that such a capital venture could possibly weaken the brand affinity of the individual organizations.
Growing pains aside, IDC Financial Insights is excited for, at the very least, the number of technological precedents that CIMB-RHB-MBSB would potentially set. From the vindication of aggressive-yet-visionary IT investments of the past, to how technology might expedite the stabilization of the post-merger organization, pundits will have much to preoccupy themselves with for some time to come.
Michael Araneta is a Consulting and Research Director with IDC Financial Insights Asia/Pacific. Michael leads the Asia/Pacific Banking Strategies Practice and the Asia/Pacific IT Strategies Practice.
Ho Sui-Jon is a Market Analyst for IDC Financial Insights Asia/Pacific. He anchors the Financial Insights Innovation Awards program, as well as research on emerging technologies within Asia/Pacific's financial sector.
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