Client Background
The client comprised two leading banks in the GCC exploring a combination and seeking a single, modern technology platform for the merged entity. The two banks ran different generations of their core and surround applications, with differing levels of in-house development, so choosing which stack to carry forward had significant implications for cost, risk and customer impact. The integration design also had to accommodate the transition to Shariah-compliant operations within a tight regulatory window, which required re-mapping of deposit, financing and treasury workflows. The core banking vendor had proposed two integration options, and Cedar was mandated to validate their pros and cons, identify the stronger technology stack for future needs and recommend the optimal integration roadmap.
Cedar’s Approach
Cedar applied a structured, criteria-driven evaluation anchored in guiding principles agreed for the merger: cost effectiveness, limited change management, effective internal controls, minimal disruption, faster time to market, mitigated operational risk, limited customer impact and regulatory compliance. The work ran through four modules:
Merger Context and Workshops – Cedar held workshops with both banks and the core banking vendor to understand the strategic drivers, the proposed options and the assumptions behind their timelines.
Technology Stack Analysis – Using a seven-layer architecture framework spanning channels, servicing, core applications, mid-office risk and compliance, support functions, middleware and infrastructure, Cedar mapped the two banks' applications against each other across 18 application areas. Each pair was rated on eight weighted parameters, including version and end-of-life exposure, reusability versus rework, flexibility and future-proofing, vendor roadmap, API-driven modularity and alignment with the merger objectives. The result was a target application blueprint that favoured the more modern, vendor-supported stack while retaining best-of-breed support systems.
Option Assessment – Cedar tested both vendor-proposed options for their pros, cons, risks, cost and customer impact. The analysis showed that one option relied on an outdated surround stack and parallel upgrade and conversion activity that created compounding delay risk, while the other aligned to the target stack but underestimated migration and testing effort.
Roadmap Design – Cedar then designed a balanced alternative that combined the speed of the first option with the target-stack alignment of the second, supported by a phased timeline and critical success factors.
Strategic Outcome and Way Forward
Cedar recommended a hybrid pathway in which a Shariah-compliant model bank is built on the latest core banking version immediately, with no dependency on the merger approval, while the portfolio conversion proceeds in parallel. The second bank then migrates directly onto the target stack, with data migration and testing run concurrently, an extended testing window to contain risk and a defined integration day followed by stabilisation and decommissioning of legacy applications. Compared with the original options, this approach keeps both banks on a modern, standardised stack, de-links the conversion from any merger delay, absorbs potential slippage in the model bank build and protects product sales and customer experience throughout the transition.
Cedar identified eight critical success factors, including combined hardware sizing, end-to-end integration beyond the core vendor's stack, dedicated resources from both banks, a change freeze, vendor alignment, standardised Shariah-compliant processes, early approval for masked data sharing and timely porting of existing customisations. The agreed next steps are joint steering committee approval of the roadmap and integration principles, ordering the model bank build, and establishing an IT integration PMO and workstreams, supported by augmented specialist resources and a change agent network for adoption.