The Bank's heart transplant: how Danske's Baltic banking systems underwent their biggest transformation

Tadas Karkalas, Head of Baltic Business Strategy & Change at Danske Bank

karkalas You sometimes have to come to terms with the fact that bank work can be convenient, dull and slow. I then thought back to the Easter weekend in which we launched our new banking system. The project, named BALIN, was like heart transplant surgery.

In fact, any single mistake could have opened the way for inconvenience to thousands of customers across the Baltic States, extra strain for our employees, financial losses, and, potentially, reputational risks for the Bank. Today we remember this project as a unique professional experience. We kept our promise to deliver the project on time, smoothly, and according to our well-laid plan.

Three in One
The new banking system, known as the Baltic Single Instance Forpost, merged existing banking systems in Lithuania, Latvia and Estonia. Three countries with three different banking systems, different approaches to IT management and product development.

We had to remove the old heart of the bank, and replace it with a new one without damaging its complex business processes. Time was limited – two years were set for the implementation of the project, and the system migrations could happen only during the weekends. This is a very short time to implement a new banking system, not to mention creating entirely new business processes. The bank had to start operating as one Baltic organization – not as three separate entities.

Preparation - As a Military Exercise
Preparations took place in a military fashion. We knew that without good preparation and proper organization, it would be impossible to accomplish the tasks we set ourselves with: to create one banking system and Baltic organization with aligned business processes, products and governance.

It was only after investing a lot of time in setting the groundwork for the project that we signed a two-year contract with a Forpost vendor, Forbis. Together with Forbis and EY Baltic, we defined the do’s, the how’s, what principles to follow, the decision-making process, program governance and the timeline how to deliver everything in 24 months. This groundwork was key to our success.

Our transformation journey began in 2014, when the Danske Bank Group approved a new Baltic banking strategy. One of its primary elements was the introduction of a unified banking system. In 2015 BALIN program started with Gap analysis. In 2016 we signed contract with Forbis.  At the end of that same year, Lithuania migrated to the newly created version of the Baltic Single Instance Forpost, and in July 2017, Latvia moved too. Estonia's migration was the most difficult and took place in several stages – at the end of 2017, most of the functionality required for Estonia was implemented, while relevant customer data and banking product information was transferred over the 2018 Easter weekend.

How did we do it?
This was a unique project, with around 150 people working round the clock. We conducted the migration only after testing scheduled changes and rehearsing planned migration process. Migration rehearsals were conducted in close-to-live conditions, during the weekends. Changes were implemented in test environments, and were tested both by business and IT representatives. Data reconciliation (cross-checking pre and post-migration critical business data) were performed. Everything was managed via Command Center responsible for cut-overs.

JIRA system was used for all testing, headed by a permanent TMO - Testing Management Office. All of the product owners were involved in the testing phase. This allowed us to ensure that entire system's functionality is thoroughly and accurately tested.

Another unique aspect of BALIN was the Real Time Audit. It is common practice to conduct an audit after the project has been completed; in this case, it was performed regularly throughout the duration of the project. This helped us to quickly identify risks and solve them, then record all decisions and changes.

Teams communicated in various ways. We scheduled regular meetings, and used data sharing and storage platforms (sharepoint and LiveLink), group e-mail addresses, visual tools (A3 project plans illustrating the individual project phases), function-specific Skype chat and messaging channels.

Success was built on the foundation of business and IT teams working together towards a mutual purpose. This was the case for both individual teams as well as the overall program steering committee (Operational Steering Committee).

Why did we succeed?
The acronym BALIN officially stood for Baltic Integration. But for us, BALIN had another meaning: the dwarf Balin from the "Lord of the Rings" and the metaphor of travel. A real journey, full of unexpected turns, obstacles and dangers. However, it also gave us a community spirit and a sense of comradery – a journey in which everyone grew and learned a lot.

We implemented the project in accordance with the principle ‘Plan A. Because there is no plan B‘. A unified purpose, a strong team management and competence, the ability to balance between Waterfall and Agile methods, continuous effective communication, clear priorities and decision making, and strict compliance. In the end of BALIN’s journey we could proudly state - “Promised & Delivered”. Not many businesses can state this, as globally up to 70% of comparable business transformation projects never reach their goals.

BALIN experience proved to be the recipe for a successful business transformation, and it has been used in the Baltic Transformation Program, which includes both exiting from Estonia and the termination of the banking business in the Baltic States.