Laying the foundation for the digital future of Switzerland’s third largest bank
Raiffeisen and Avaloq have jointly developed Switzerland’s most innovative retail banking platform for the Raiffeisen group of banks. Historically, Raiffeisen’s IT and business process architecture was highly fragmented: client master data, current and savings accounts and credit positions were kept in 246 separate installations of Dialba (as the previous system was known) and processed at each of the individual Raiffeisen banks. Twice previously Raiffeisen had tried – unsuccessfully – to move away from the Dialba software before deciding to work with Avaloq.
Raiffeisen Switzerland is a key player in the Swiss banking sector: with the 253 cooperatively structured Raiffeisen banks and their 896 branches, it offers the densest subsidiary network in Switzerland. With 3.8 million clients, it is the country’s third-largest banking group and a leader in the retail sector. For more than 150 years, the member-owned, cooperatively structured banks have stood for a strong local presence, a high degree of advisory expertise, and products that are tailored to clients’ needs.
Independent banks and branches migrated in 7 waves: 246 banks, 6 branches and the central Raiffeisen bank
Assets under management
Clients in Switzerland
Switzerland’s third-largest banking group
Payment transactions per day (Raiffeisen central bank)
Employees and users of the new platform
Raiffeisen and Avaloq
Then and now
Raiffeisen has relied on Avaloq for its payment services and core banking functions since 2009. On average, more than one million transactions were being processed with the Avaloq Banking Suite every day; on peak days, this number reached two million. With annual volume growth of 7% and 400 million transactions in 2017, this success showcased the true scalability of Avaloq’s technology.
This positive experience motivated Avaloq and Raiffeisen to establish the joint venture ARIZON towards the end of 2014, with the aim of ultimately replacing the legacy system Dialba. The idea was to facilitate an integrated view of all client positions, such as cash, securities, loans or mortgages, and to consolidate all business functions and processes on a future-ready and flexible system.
The partners were aware from the outset that the migration of over 253 separate systems – some of which had varied, miscellaneous data structures – to a central platform would be a profound but fascinating challenge.
Launch of Project Rainbow
ARIZON had not only set itself the goal of developing Switzerland’s most innovative retail banking platform for the Raiffeisen banks, it also pursued an ambitious roadmap from the outset, with the aim of operating all 253 institutions on the new Avaloq solution by the start of 2018. At the same time, the ARIZON team was aware that a high degree of flexibility and adaptability would be required for such a vast project with a high number of stakeholders.
The platform had to fit all the needs of the 253 separate banks and branches. As such, the new solution was designed for front-to-back efficiency, the automation of compliance, and the facilitation of processes and user journeys, e.g. new client onboarding. Avaloq’s unique architecture was the precondition for a project of this size, allowing all banks to ultimately rely on one single source of data.
Platform development and migration
The appropriate migration of the individual banks to the new platform was critical to the project. Together with all the stakeholders, ARIZON decided to migrate the Raiffeisen banks over seven ‘waves’ that would each include a certain number of banks. The switchover from the Dialba system to the ARIZON Core System was a technological breakthrough but a migration of all banks at the same time would not be within the boundaries of appropriate risk management.
In January 2018, the first 22 pilot banks went live. The decision to carry out the migration in stages proved to be the right one: due to the diverse nature of the banks, it was hard to test all the functionality upfront. Indeed, due to this approach, it was identified that some of the Raiffeisen banks needed additional functionality.
Successful pilot phase and rollout
The 22 pilot banks agreed that the ARIZON Core System was ready for further migration steps in the summer of 2018. Thanks to this pilot phase, further banks could be quickly and reliably migrated to the new system in a “migration factory” approach: another ten banks went live in August, a further 35 on 30 September, and more than 30 banks in October.
Following further migration waves, the project was concluded by the beginning of January 2019, and all the Swiss Raiffeisen banks have been live on the Avaloq solution since then – an unprecedented success story and one of the largest such projects in global retail banking.
“This new core banking system allows us to provide our employees with a new platform. With this, Raiffeisen Switzerland is laying the foundation for the agile implementation of future digital projects. We would like to thank everyone at Avaloq and ARIZON who has been involved in the project for their constructive and professional work.”
Rolf Olmesdahl COO and Member of the Executive Board of Raiffeisen Switzerland