IBS Journal Supplement 2015


to have a vendor that has experience and presence across Europe, and can provide a harmonised solution that can alleviate the issue of dealing with multiple jurisdictions and local regulations. The bank was also looking to reduce costs and consolidate technology, she adds. ‘As PKO is a public bank [it is traded on the Warsaw Stock


Exchange], it had to go to market to evaluate the available prod- ucts before making a decision,’ she says. ‘The bank issued an RFP not because it was unhappy with us, but because it had to do it.’ It spent two years researching the options, both local and interna- tional. Boucheron-Saunier muses that it opted for ACI, as ‘we are financially stable, already in place at PKO, we think of standards Europe-wide and can address international expansion’. Base24- eps is already in place at a number of institutions in Europe, such as Crédit Agricole Cards and Payments, which acted as a reference


site, she says. Crédit Agricole, a customer of ACI since 2009, signed for a complete overhaul of its payments solutions set-up in 2012, underpinned by Base24-eps on IBM Power 770 systems. The project came with a €300 million price tag. The implementation work at PKO is already underway. ‘Big things will happen this year and the next,’ Boucheron-Saunier says. The completion is expected by the end of 2016 or possibly mid- 2017. ACI is working with the bank directly, and Boucheron-Saunier points out the vendor’s commitment to the market: ‘we have local people that speak Polish and understand local culture’. The migra- tion to the new system will be phased, aimed at decreasing the bank’s costs ‘step by step’ by gradually removing the costs from the old system, she explains. ‘This way, the bank will not have to pay double, for the old system and the new one, which is often the case in technology transformation projects.’


...and wins court ruling in India


ACI Worldwide has won a legal battle after a year-long investigation by the Competi- tion Commission of India (CCI) found that it had not breached local competition rules. The complaint against the vendor came from a local system integrator, FSS, which had alleged that ACI had abused its position in the market to exclude it from providing services contracts for custom- ers using the Base24 payments software, instead insisting banks sign up for support contracts with ACI directly. However, the CCI ruled that the vendor had not breached the rules, stating: ‘the Commission con- cludes that no contravention of the provi- sions of section 3 [related to anti-competi- tive agreements] and section 4 [concerning abuse of a dominant position] of the Com- petition Act 2002 has been established in the present case’. In a statement given to IBS, ACI said:


‘We are pleased with this ruling by the CCI. Its detailed investigation has concluded that no contravention of the Competition Act 2002 is made out against ACI. We have always strictly adhered to participating in fair business practices in India and else- where around the world and we remain fully committed to our continued growth in the Indian market.’ FSS has a long history with ACI, hav- ing initially partnered with the vendor in 1991 to be a reseller of Base24, further extending this to become a certified dis- tributor and service provider in 1998. The dispute between the two vendors, how-


ever, emerged a decade later in 2008. ACI proposed a new arrangement whereby ACI terminated the distribution agree- ments with FSS and licence agreements between FSS and existing ACI customers in India were assigned to ACI India. ACI would then endorse FSS as a provider of servic- es of Base24 to existing customers in India, and FSS would be able to directly deal with them or go via ACI India. Then, in 2011, ACI announced its cus-


tomers would not be able to use FSS as a services partner, instead insisting custom- ers use ACI services exclusively, but lat- er retracted this after some banks raised concerns about the lack of choice on the market, citing the systemic importance of Base24 (it is claimed in the court filing that 95 per cent of ATMs in India are running the software). In submissions made to the direc-


tor general of the CCI, Indian banks using Base24 made the following remarks about the threat of having to change system: o ‘A substantial investment is already


made by us in creating the payment sys- tem. A change in the switch will require migration of customisation of the new plat- form.’ – Union Bank of India. o ‘Shifting from one switch software


to another switch software requires cus- tomisation in the new software for all the existing functionalities, which is prone to commercial and business continuity risk.’ – State Bank of India o ‘Shifting from Base24 to any oth-


© IBS Intelligence 2015


er switch application involves high time, efforts for migration and cost impact, risk of disruption of operations in providing banking services, in addition to reputation and regulatory risks.’ – Bank of Baroda However, in 2013 ACI once again


U-turned on this strategy, informing cus- tomers that they would have to cease ser- vice agreements with FSS, and instead sign up for the vendor’s ‘enhanced support pro- gramme’, which would replace the equiv- alent services offered by FSS. This subse- quently triggered the resultant legal action. This is not the first time that ACI has


had resistance from its user communi- ty regarding its strategy with Base24. In 2008, ACI announced that a host of legacy systems would be sunsetted in Novem- ber 2011. Base24 was among these, with the vendor promising to continue to sup- port the system (albeit with an increased support charge), whilst also encourag- ing all existing customers to move to the new Base24-eps. However, the announce- ment was met with trepidation from the user community, with concerns about the suitability of the system from a functional point of view, and questions raised about ACI’s capacity to deliver several hundred migrations in a short time period. The lat- est release of the software from the ven- dor, announced last year, was hoped to be a ‘tipping point’ for Base24 classic users to migrate to the new version, said Mitch Armstrong, director solutions consulting at ACI, when speaking to IBS.


www.ibsintelligence.com 9


round-up: who’s doing what


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