2023-08-24 04:23:01
August 22, 2023 Today at 06:00
Crelan’s flawed anti-money laundering policy is directly related to its long-standing difficulties in managing its IT.
Crelan (ex-Crédit Agricole) struck a blow more than two and a half years ago by buying the AXA bank. The group thus became the largest bank in the country following the big four in the sector (BNP Paribas Fortis, KBC, Belfius et ING).
To do this, Crelan had to put no less than 600 million euros on the table. Not to mention the 180 million euros needed to ensure AXA’s migration to Crelan’s IT infrastructure.
Despite this hefty IT bill, which also aimed to modernize the group’s infrastructure, it is surprising that the systems of Crelan and its subsidiary Europabank were not able to comply with the rules of the fight once morest money laundering.
Even today, Crelan’s banking agents still complain regarding, for example, difficulties in starting systems or consulting clients’ portfolios.
The group has thus drawn the wrath of the National Bank, the sector’s supervisory authority. For its part, it should be noted, AXA Banque was perfectly in order.
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Software issues
According to our information, Crelan invoked for its defense before the BNB its great difficulties in deploying the new banking software of the French supplier Sopra Steria in 2017when the new anti-money laundering rules entered into force.
This IT project, called NEXT, had been underway since 2015 and was to replace systems that were more than fifteen years old. It was ultimately frozen following only one of the five planned components was implemented. After that, the bank emphasizes once more, it turned its full attention to the takeover of AXA, thus relegating the application of the 2017 law to the background.
It remains to be seen whether these explanations will be convincing enough to avoid possible sanctions.
Computer problems have not disappeared. In June of this year, the system had major problems and, even today, Crelan’s banking agents still complain regarding, for example, difficulties in starting systems or consulting clients’ portfolios. These failures cause a lot of dissatisfaction.
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Long-awaited green light
The poor performance of Crelan’s computer system also explains the slowness with which the National Bank and the European Central Bank gave the green light to the takeover of AXA. Their own analysis had indeed revealed many shortcomings. They only agreed to approve the transaction following receiving a commitment from Crelan to invest heavily in its IT infrastructure.
In 2022, the promises made to regulators turned out to be too ambitious.
According to our information, the bank had identified 108 IT integration and migration projects. But last year, the promises made to regulators proved to be too ambitious.
Assisted by consultants Deloitte and Accenture, she narrowed them down to 76 projects focusing on migration, human resources and business “must-haves”, which must be completed by the end of March 2024.
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Plan B
The path is still long. So long that Crelan considered a plan B, consisting of migrating its IT to AXA, and no longer the other way around. In the end, it did not succeed, but it required numerous studies and caused, in the process, internal tensions.
Crelan’s Chief Information Officer (CIO) teams have formally “questioned the feasibility of the modified Plan A for March 2024.”
Thus, a document that we were able to consult mentions that the teams of the chief information officer (CIO) of Crelan have formally “questioned the feasibility of the modified plan A for March 2024”.
Shortly following Plan B was rejected, CIO Jeroen Ghysel, who was a staunch proponent of it, resigned with a bang.
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Experience with Centea
These difficulties are surprising insofar as Crelan had, until then, some experience in IT migration: in 2013, the Centea bank, acquired from KBC, had already migrated to Crelan’s IT platform. Sopra is still working on IT for Crelan, such as the Limburg firm Cegeka in Limburg, among others.
Crelan replies that the integration and migration operation relating to AXA Bank is a large-scale project which will take several years to complete. For her, the adaptations made during its implementation are normal in this kind of project.
The bank further specifies that it has opted for a progressive approach consisting in carrying out the innovative, essential and most relevant projects first. “The important thing is to be able to offer a quality platform and offer to customers, also following the merger. This is the priority and, in this respect, the project is progressing in line with the overall takeover planning.”
The summary
IT has been a thorny issue for Crelan for several years.
The group’s underperforming IT system was also one of the reasons why the green light for the takeover of AXA Bank took so long to obtain.
AXA’s integration and migration plans were scaled back, as they proved unfeasible in their original form.
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