Technology Shift Creates Offshore Opportunities For US Core Systems
NEW RESEARCH REPORT BY MERCATOR ADVISORY GROUP
Recent events indicate that the US market for core banking systems will experience increasing rates of technology change, primarily driven by offshore suppliers. Offshore suppliers have experienced tremendous uptake for their new core system technology in developing markets, but are now developing strategies to penetrate the US market – and recent wins in the US market suggests the US market is warming up to the idea.
In 2003 Fidelity Information Systems bought Alltel and acquired the Corebank product. Corbank was rewritten in 2003 to implement a component-based development environment that utilizes web services and modeling as implementation and development methodologies. In August 2005 Oracle purchased a controlling interest in i-flex Solutions product, FLEXCUBE (that implements a component and model-based development and execution methodology), to replace its existing core system with an eye towards lowering the bank’s operating costs while also speeding the introduction of new bank products and services. And just this March Metavante announced that it will implement the Temenos CoreBanking product for large financial institutions in the US market. Tim Sloane, Director of the Debit Service for Mercator Advisory Group and the author of the report indicates that these events likely indicate a strategic shift that will slowly ripple through the core system market;
“These moves by Metavante and People’s Bank are clearly the most significant proof point that these new architectures will, at a minimum, be carefully evaluated by US financial institutions on a very broad scale. But it is important to recognize that these adopters have carefully investigated and then embraced these new architectures, so it appears extremely likely that more US financial institutions would come to the same conclusion – that these new architectures and integration tools will simultaneously lower operating costs while increasing the speed of deploying new and enhanced products and business processes.”
This report is 23 pages long and contains 8 exhibits.
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