“We chose Microsoft because of its flexible technology that gave us a fast time to market – the bank only had three weeks to go live with the first three branches.”

Banking start ups often present challenges, but none could have been more daunting than during the crisis facing Serbia’s financial system as it re-emerged from years of civil war. In early 2002, 12 banks in Serbia went into liquidation and the government needed to act quickly to restore investor confidence, in case ordinary citizens lost their life savings. The only answer was to create a new bank that would offer new hope to all Serbians.

The Belgrade-based National Savings Bank of Serbia (NSBS), which is majority owned by private companies, was given the mandate to transfer 2.5 million customer accounts from the failed banks to a new database. The government took the responsibility for underwriting the transferred accounts by issuing 16-year bonds and then creating a secondary market for the debt. NSBS already generates 75 per cent of all the securities trading in Serbia and is now targeting small and medium-sized businesses.

Mladen Jevtic, executive director of IT, NSBS, says: “We didn’t exist as a banking institution before 2002, but the economic crisis was so severe that time to market became the most critical factor. Our mission was to create a completely new bank on a green field site. The business plan gave us one week for planning and two weeks for implementation involving the core banking system, software, hardware, and security policies.”

Two years later, Jevtic is convinced that not only was the solution he chose correct but, even if time pressures had not been as severe, NSBS would have chosen Microsoft® technology. The bank’s performance since opening with three branches in 2002 validates that choice. NSBS now has 80 branches, 1,050 staff, 3.5 million accounts, assets of US$120.336 million, and a return on equity of 22.25 per cent.

NSBS chose a core banking module from Pexim, a Microsoft certified partner, and used the Microsoft Windows Server™ 2003 family for its 40 applications. The decision was based largely on a desire to minimise total cost of ownership through a high degree of manageability, with the Microsoft .NET Framework, as its programming environment. The .NET Framework is an integral component of Windows® operating system that provides a programming model and runtime for Web services, Web applications, and smart client applications.

Jevtic takes up the story: “We chose Microsoft because of its flexible technology that gave us a fast time to market—the bank only had three weeks to go live with the first three branches. Only Microsoft could offer us an operating system, software, hardware, e-mail, and security that would be easily integrated and match the skill sets the local labour market with minimum retraining.”

 Using the Microsoft .NET Framework and Microsoft Visual Studio® .NET development system, NSBS based its IT infrastructure on Microsoft SQL Server™ 2000 Enterprise Edition, because of its ability to serve a large number of clients. Jevtic says: “We are really proud of the fact that in nearly two and a half years we’ve seen no performance degradation as our database has grown from zero to 200 GB. SQL Server intelligently tunes and adjusts itself to accommodate database growth which is happening at the rate of 36 GB a month.”

With Microsoft Office XP for its desktop environment, NSBS has an end-to-end Windows-based solution scalable for future growth in financial services in Serbia. Jevtic says: “It scales up and out better than any other solution, uses resources more effectively, simplifies management, and performs better than our most optimistic expectations.”

As prosperity and stability have returned to Serbia, demand has grown for e-banking services. Jevtic says: “We used the .NET Framework 18 months ago for all our intranet applications. The core banking module provided by Pexim, turned out to be very successful and was also developed using the .NET Framework.”

The e-banking service is supported by Microsoft Identity Integration Server (MIIS) 2003. MIIS improves identity and access management for customers by enabling them to integrate information from multiple repositories for a single, complete view of user information.

From a standing start NSBS now supports 1,000 users concurrently accessing its database from multiple applications generating 300,000 complex ‘update’ transactions a day.

Bank Goes Live in Only Three Weeks

The financial crisis in Serbia after the collapse of 12 banks caused a huge economic upheaval. Savers needed a new secure home for their accounts where the government could deliver them appropriate compensation. NSBS became the custodian for those accounts, but the new bank had only three weeks to go live in order to restore overall confidence in the Serbian financial system.

“We could not have afforded to waste a single day,” says Jetvic. “Our business plan was quite clear – planning one week, implementation two weeks. We’d seen Microsoft presentations in Belgrade and Hanover. However, there was some pressure from consultants not to go with it. Microsoft was my choice from the beginning and I have never doubted that it was the right decision.”

Fast deployment coupled with better integration by using the Microsoft .NET Framework has helped NSBS to keep labour costs low both in the start-up phase and now that the bank is developing in services and niche markets. The flexibility of Web services with the .NET Framework is enabling NSBS staff to turn new business ideas into profitable products in record time and gives it the ability to adapt quickly to changing markets.

Tellers Reconcile Accounts in Minutes Not Hours
By using the .NET Framework, NSBS has managed to automate many of its business processes that in other banks take hours rather than minutes. This has helped the new bank to enjoy a low total cost of ownership and increased productivity.

Jevtic says “Tellers normally take up to two hours to go through their reconciliation process at the end of the business day, but at NSBS they now do it in 10 minutes.”

Jevtic continues:” We have been able to reduce overtime for IT systems maintenance by as much as two shifts in our head office and we’ve made significant time savings in transaction time in our branches. Our staff are able to do more things in less time and as a result staff morale and customer satisfaction is very high.”

Integrated Customer Focus
By deploying Microsoft technology throughout the enterprise, NSBS has empowered its staff to deliver an integrated customer focus to its 3.5 million account holders. It is enabling the bank to satisfy existing customers and win new business by giving them the right information on time.

Jevtic says: “When customers come into our branches, we can serve them more quickly than our competitors, because we have automated our core banking systems. We are also now looking at new business areas, including small and medium sized businesses.”

The new service for businesses which is being launched in May will revolutionise the processing of banking credits for small businesses. “It is the first core banking application done completely in the .NET Framework,” says Jevtic.

IT Infrastructure Wins Award for Bank
The leading edge technology deployed from Microsoft by NSBS has won it recognition from a leading professional body in Serbia. The Federal Association of IT Experts, which also covers Montenegro, last year awarded NSBS first prize in the financial sector for the quality of its IT infrastructure.

Jetvic says: “This is a great differentiator for our bank, because we are now a reference site for other banks. It is being noticed now in Serbia that an investment in an IT infrastructure is the key to generating better financial results.”