A new IT base for Bausparkasse Schwäbisch Hall

Bausparkasse Schwäbisch Hall is perhaps the best-known building society in Germany and – with more than 6 million customers – it is certainly the largest. For more than 90 years, it has been a building and loan expert and partner for private construction financing. With some 3,300 employees in the office and more than 3,200 advisors in the field, Schwäbisch Hall is present throughout Germany and provides its customers with reliable and competent advice and support.

Schwäbisch Hall set itself a strategic goal to ensure that this success story can continue in the coming decades: It aims to become the leading provider of building and living solutions in Germany. Sustainable and profitable growth will be achieved in building society savings and, in particular, in construction financing. For this purpose, construction financing should first be significantly expanded and developed.

The need for change

The long and proud history and success of Schwäbisch Hall have always been supported by state-of-the-art IT systems. As with many banks, financial service providers and insurance companies, Bausparkasse Schwäbisch Hall’s IT infrastructure has been built and maintained in-house for decades. The result was a solution that was perfectly tailored to the needs of the organization, but increasingly unsuitable for meeting future requirements:

• The existing system could only be adapted to the increasing regulatory requirements and new market requirements with considerable effort.
• As the end of the technological life cycle was reached, it became increasingly difficult to find staff with the appropriate qualifications.
• Customer expectations had changed: Fast, efficient and flexible systems have become increasingly important

A new platform as the basis for future development

In order to achieve the strategic goal, the technological infrastructure had to be comprehensively renewed.
No more investment in individual components of the previous solution – the in-house developed, HOST-based core banking system needed to be replaced by a modern core banking platform based on SAP. This makes technical and process-related performance improvements possible, enables digitalization and automation and prepares Schwäbisch Hall for future regulatory and technological requirements.

Wavestone as the largest implementation partner

This pioneering project at Schwäbisch Hall went under the name of NEXT and was the largest IT infrastructure project in the company’s history. As the largest implementation partner, Wavestone successfully assumed the role of system integrator with the substantial responsibility it entails.

The modernization of the core banking system was a challenging and highly complex project. The new IT system was set up over a period of six years with a focus on the construction financing business. Not only was the existing system converted during ongoing operations, but the operational division also grew significantly during this time. Meanwhile, high demands on security, stability and availability posed additional challenges. Other examples of transformation in the sector clearly illustrated just how challenging complex projects of this kind can be, even resulting in some cases in considerable financial damage and loss of reputation.

Wavestone successfully completed one of the most ambitious IT projects in the industry together with Schwäbisch Hall and SAP / SAP Fioneer as software provider. The excellent and close cooperation between all partners was a key success factor. In a process lasting several years, IT was transformed across the entire company. A core banking system was developed and implemented for Schwäbisch Hall that makes it possible to better reach more than six million customers and offer them the best possible service via a wide range of access channels.

Multi-year process

The initial project consisted of a thorough review and a development phase as the basis for successful implementation. The gradual transfer of new lending business to the new SAP platform began in 2019. Due to the coronavirus pandemic, the solutions often had to be developed, tested and coordinated from home. The existing business and all associated data was gradually migrated in 2022. Overall, more than one million loan agreements, such as building society loans, advance and interim loans, annuity loans and associated insurance products were transferred to the new platform. A total of four migration tranches and 13 software releases each involved up to 300 employees working remotely and on site during the go-lives. It was critical that ongoing business operations was not impaired for customers or for the field and office staff.

With the migration complete, Bausparkasse Schwäbisch Hall is now in a position to process both the existing loan business and the fast-paced new business developing very efficiently on the new platform.

Success factors

Various factors were decisive for the success of this complex project:

• Breaking down the extensive project into realistic intermediate steps
• Efficient scope and release management in order to be able to handle both normal day-to-day business and the IT transformation process in parallel
• Intensive internal communication boosted motivation, strengthened commitment and maximized performance among team members
• Introduction of new project work methods, especially those involving agility
• The early involvement of users through information, training and education
• The use and coordination of specialized external service providers
• Closest attention and top priority of the entire top management as well as intensive cooperation with the project team

Securely into the future

With the successful implementation of the new IT system for loan processing, all partners have jointly created the basis for completely shutting down the old system. The entire construction financing processing now runs on a future-proof system that enables Schwäbisch Hall to respond to customer requests and regulatory requirements quickly. In addition, more data is available that can be used for the development of new business models, products and services as well as for corporate management.

Following the successful migration and IT modernization, Bausparkasse Schwäbisch Hall now has a modern, SAP-based core banking system instead of a historically grown monolith, thus placing the customer at the center of all services and enabling significant increases in efficiency in the future. This means that Bausparkasse Schwäbisch Hall is ideally positioned for future challenges and further steps to digitalization.