Information Management and
Transaction Services
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Our information management activities in 1999 focused primarily on migrating
the HypoVereinsbank branch system to a single new bank-wide platform. In
fact, we accomplished the technological requirements associated with the
merger in record time, while also carrying out a number of customer-oriented
process improvements. Our customers now enjoy the combined advantages of
a dense network of modernized branches together with a broad spread of
conveniently-located ATMs. As for Y2K preparations, we completed the
necessary work well on schedule, while keeping the cost to a manageable level.
We continued to systematically optimize our technology infrastructure, and
also entered into a strategic cooperation agreement with SAP that will give us
the wherewithal to develop and introduce new bank controlling systems. We
intend to concentrate the transaction services we offer in the Financial Markets
Service Bank with a view to providing alternative offerings on the Internet and
making them available to the market.
»The Internet is changing consumer
habits radically. Innovative service
offerings and our multi-optional
approach to sales will help us achieve
a leading position in the e-business
marketplace.«
Dr. Eberhard Rauch
Board member
B A N K - W I D E P L AT F O R M E N H A N C E S E F F I C I E N C Y
B R A N C H M I G R AT I O N C R E AT E S C O S T S Y N E R G I E S
AND PROCESS IMPROVEMENTS
The harmonization of HypoVereinsbank's information systems,
successfully completed in 1999, was the largest project of its kind in
German banking history. In less than eight months, about 1,000 facilities
were supplied with new technology and more than one million accounts
were transferred to the new system. With the successful completion of this
work, we laid the technological foundation enabling us to realize merger
synergies projected to save half a billion euros by 2001. At the same time,
HypoVereinsbank’s customers enjoy the combined advantages of a dense
network of state-of-the-art branches operating on the same technology
basis and a conveniently-located spread of ATMs.
Innovative controlling
In addition to the branch migration project, we established a common
systems platform for our headquarters and brought all our security
systems under a single controlling system. By consolidating more than
150 different computer systems under the Windows NT platform and
adapting them to the needs of the new bank, we created an innovative
technological infrastructure – available for use by all divisions and companies of the Group – for controlling the Bank's business and operations.
The Bank's intranet system, which already receives more than 4.6 million
visits each month, is fast becoming established as the in-house information hub of choice, replacing the formerly prevalent print media. The
in-house e-mail system is also intensively used by our employees.
In addition to systems integration work, we also invested substantially in
modernizing our computer systems and telecommunications
infrastructure. In all, the Group invested some €917 million in
information technology in 1999, compared with €776 million in 1998.
T O TA L C A P I TA L S P E N D I N G
O N I N F O R M AT I O N T E C H N O L O G Y
€ millions
Infrastructure and
service units
Vereins- und
Westbank
Other domestic and
foreign Group companies
Corporate divisions
and other parent bank
444
74
181
218
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SMOOTH TRANSITION TO THE NEW MILLENNIUM
We not only completed our Y2K preparations on time, but we also managed
to do so with the industry's lowest costs in relative terms of only about
€50 million over the entire changeover period, posted to operating
expenses. The tests conducted during the course of 1999 created a sound
basis for the transition. All our programs were Y2K-compliant by the end
of June 1999. In the crucial days from 30 December 1999 to 4 January
2000, we monitored all our systems from a control center set up
especially for this purpose. Everywhere in the Group, the transition went
off smoothly.
M U LT I W E B O P T I M I Z E S M O N E Y T R A N S F E R O P E R AT I O N S
F O R C O R P O R AT E C U S T O M E R S
Faster payment
processing
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Internet-based electronic transaction processing makes it possible for companies to harmonize all their business processes, from production and
delivery to customer service. Payment processing is an important element
of this process. The MULTIWEB platform, developed by HypoVereinsbank
at the head of a team including other companies as well, serves as an
interface between our accounting systems and those of our customers. It
simplifies the processing of money transfer operations while meeting
strict security standards.
In parallel with these developments, we extended the line of products we
offer in the international clearing business. In September 1999, we joined
the Euro Banking Association (EBA) clearing system so that we can offer
cross-border money transfer services in the euro-zone. Through our
participation in IBOS, a strategic alliance of leading international banks,
we at HypoVereinsbank are able to offer transaction services throughout
the euro area. Our customers benefit from faster money transfers and
more efficient cash management.
We have responded to the special security needs of our private customers
and professionals by introducing a new money transfer system based on
the especially strict HBCI (Home Banking Computer Interface) standards.
We intend to enhance security further during the course of 2000 by
introducing new programs for processing securities transactions.
E - B U S I N E S S : S TA N D A R D S C R E AT E S O U N D B A S I S
F O R W O R L D W I D E E X PA N S I O N
E-business is among the fastest-growing sectors in the world economy.
Many businesses, however, have grave reservations related to the security
of electronic transactions. Leading-edge financial institutions can build a
strategic advantage by establishing themselves as the guarantors of the
security and reliability of electronic transactions.
Together with other major banks, we founded New York-based Identrus in
1998. The consortium, which has since grown to include twelve international financial corporations, has established a worldwide standard for
digital signatures. This technology enables our customers to do e-business
all around the world on a firm legal basis.
In 1999, in collaboration with the three major Frankfurt-based German
banks, we acquired Hamburg-based TC TrustCenter, which had already
established a strong market presence. This acquisition provided us with
the infrastructure required to issue Identrus certificates.
S U B S TA N T I A L I M P R O V E M E N T S T O R I S K C O N T R O L L I N G S Y S T E M S
Software developed
in-house boosts
security
Sophisticated information systems are the most important guarantors of
modern risk controlling. Having invested substantial sums to upgrade
these systems, we have made considerable progress in this area, including
an exhaustive new system to monitor market risks. Borrower risks are
monitored using a software program developed in-house specifically for
our needs. The program computes up to 16,000 scenarios on the basis of
a portfolio model. To manage property risks in the full range of real estate
we finance, we will first develop an underlying valuation methodology
that is integrated in the portfolio model system.
O U T L O O K : C R E AT I N G A N E W A R E A O F C O R E C O M P E T E N C E
Information management helps to increase efficiency and enhance the
value of a company. We intend to develop this field into a market-oriented
area of core competence for the Bank, with the aim of further boosting
profitability. The transformation of some units from cost centers to profit
centers will tap significant efficiency gains in this area.
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Networked information technologies are a key factor in achieving a
competitive edge. HypoVereinsbank is using this foundation to develop an
electronic media net known as System E. The modular design allows this
innovation to be implemented throughout the Group. Conceived to handle
capacity in excess of 10 million customers, the system takes into account
local factors like language, reporting, and accounting. System E forms the
backbone for the success of expanding our bank of the regions in Europe
strategy.
Strategic cooperation
with SAP
We were the first German bank certified by SAP as a Customer
Competence Center, enabling us to improve the support services we
provide to our subsidiaries around the world. At the end of 1999, to
support our System E development, we entered into a strategic
cooperation agreement with SAP to produce an internationally usable
system for monitoring banks and other providers of financial services. By
deepening our involvement in this cooperative venture, we will be able to
integrate new market segments more easily and respond more quickly to
market opportunities.
Moreover, we intend to step up our e-business activities. Last year we
began to develop applications utilizing chip cards based on digital
signature techniques. We will use this technology to upgrade our Internet
presence, providing more information about the Bank and building up an
infrastructure for e-business transactions. Innovative solutions such as a
scalable Internet platform, the introduction of efficient content
management techniques and customization technologies, are currently in
the process of being implemented.
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New transactionbanking subsidiary
We will increasingly market our transaction services under our own
brand. With this in mind, we have amalgamated the activities of Probank
and the FMS unit to form Financial Markets Service Bank GmbH, whose
mission it is to offer transaction banking (meaning handling services
relating to securities and payment transactions) as a profit center both
inside and outside the Group. Such services are already very much in
demand, notably from new banks on the Internet.
Environmental Management
87
Our attention in 1999 was devoted largely to introducing a new environmental
management system. In terms of product ecology, our ethical investment
products performed well on the market, while we also optimized the ecological
impact of our operations. Finally, we plan to extend the range and scope of
our environmental controlling activities to conserve natural resources, thus also
cutting costs.
S U S TA I N A B I L I T Y M E A N S G R E AT E R E F F I C I E N C Y
P R O D U C T E C O L O G Y: O U R E T H I C A L
INVESTMENT PRODUCTS OUTPERFORM THE MARKET
We were the first bank in Germany to issue an index certificate on the
Dow Jones Sustainability Group World Index. The index, comprising companies that exemplify the principles of sustainable development, satisfies
the rising demand for high-yield investments in companies that conserve
natural resources. The strong performance exhibited by the Sustainability
Index demonstrates how companies applying the principles of sustainable
development are capable of achieving outstanding results.
Successful ethical
fund
Moreover, HypoVereinsbank continues to offer the Activest Lux Eco Tech
Fund, investing in environmental technology companies, as part of its
portfolio of investment fund products. The environmental management
systems of the companies in which the fund invests are all rated aboveaverage in quality by EIRIS, an environmental rating agency. Over the
last five years, Activest Lux Eco Tech has outperformed all the ethical
funds currently on the market.
O P E R AT I O N A L E C O L O G Y:
P R O J E C T S B E G I N T O Y I E L D R E S U LT S
88
HypoVereinsbank concentrates on programs upholding procurement
standards for expendable supplies and materials, reducing paper consumption, and above all establishing effective environmental controlling
capabilities. In 1999, we developed a waste disposal concept devising a
uniform separation system for all HypoVereinsbank facilities in Germany
while also optimizing the handling of reusable waste materials. The Bank
began to implement this concept in stages at all its offices in December
1999.
OUTPERFORMANCE OF THE
H Y P O V E R E I N S B A N K S U S TA I N A B I L I T Y I N D E X C E RT I F I C AT E
Dow Jones Sustainability
Group World Index
400
MSCI World Index
300
200
100
Dec.
93
94
95
96
97
98
99
E N V I R O N M E N TA L M A N A G E M E N T:
C O M M U N I C AT I O N F O S T E R S N E T W O R K I N G
Environmental
management prize
Our environmental management program is based on the formation of
decentralized networks. The environmental network established in 1998,
the year of the merger, unites offices and departments in all the Bank’s
corporate and service divisions. The members of this network act as
review partners and opinion leaders for the implementation of the environmental management system.
Taking the results of a survey of customers, shareholders, environmental
experts and employees as a basis, we developed an environmental mission statement stipulating the requirements, goals and measures of our
environmental policy. This statement serves as the authoritative basis for
our environmental management system, which was rated number one
among German banks in a study published at the end of 1999 by Ökom,
an environmental rating agency. Our commitment to social responsibility
as evidenced by our contributions to the task force known as “Munich
Financial Industry and Local Agenda 21” was also honored with the
Munich Environmental Prize in December 1999.
OUTLOOK:
E N V I R O N M E N TA L R E P O RT H I G H L I G H T S S U S TA I N A B I L I T Y
Environmental controlling is a vital instrument for monitoring our operational ecology program. We intend to further optimize our controlling
program by applying the 80:20 method, which means optimizing 80%
of our consumption of natural resources such as energy, waste and paper
by analyzing and monitoring the biggest consumers of these resources,
which account for 20% of our facilities. In this manner, we can achieve the
greatest possible impact while keeping the related costs within reasonable
limits.
Ecological controlling
optimizes resource
deployment
HypoVereinsbank’s first Environmental Report, to be published by
mid-2000, will be guided by the principles of sustainable development. In
surveying and describing our product ecology and operational ecology
programs, we also take the economic and social impact of such measures
into account. The practical implementation of sustainability principles is
not only ecologically sound, but ultimately more efficient as well.
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