Emerson: Bank mergers can cause IT problems

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The mergers of banks can cause potential problems in the information technology (IT) systems of the entities concerned, based on a 2011 Ponemon Institute study commissioned by Emerson Network Power.

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To increase their chances of winning in an aggressive and competitive market, some banks have turned to mergers, said Gene Hayden, vice president and sales general manager of Emerson Network Power Asia Pacific.

“However, following a successful merger, core operating systems from two separate entities need to be streamlined for greater efficiency and lowered operational and maintenance cost,” he added.

He added that, “In that respect, critical IT infrastructure and support systems need to be flexible to be able to manage the load.”

According to Hayden, when two banks in the Philippines merge their systems and operations together, this resulted in high heat loads that need to be addressed immediately.

Handling additional applications also became a burden on the systems, which began to work double-time, eventually resulting in several hot spots. When flexible and scalable thermal management systems were in place, the banks were able to eliminate hot spots in their consolidated data center.

Technological advancements
The solutions to deal with the problems caused by merged IT systems of banks can be provided by Emerson.

“Optimizing the IT, infrastructure starts with power that is reliable and deploys exactly what is needed for maximum efficiency; followed by thermal management that cools down mission-critical equipment without over/under-compensating heat loads,” Hayden said.

The study also showed that customers are progressively shifting to new banking channels as they open up. Bank branch usage in Asia is down 29 percent (from 2009 to 2011), while mobile and Internet banking saw an uptick of 36 percent and 39 percent in developed economies and emerging markets, respectively. This preference of banking customers puts strains on the IT systems of banks.

“Technology has truly altered the banking landscape as we see it today,” Hayden said.

Rosalie C. Periabras

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