IBS Journal April 2017
EDITOR’S NOTE WHEN CORE BANKING AND FINTECH COLLIDE
IF CORE BANKING VENDORS WERE PREVIOUSLY UNMOVED BY FIN- TECH MANIA, THEY MUST NOW BE THINKING DIFFERENTLY
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Senior Editor Scott Thompson
Scott.Thompson@
ibsintelligence.com
part of the second wave in FinTech. The first wave hit the likes of payments and retail banking, essentially, any ser- vices that rely on the existing banking infrastructure. Now we are seeing challengers emerge with core platforms with accounts, cards and wallets, and all other services pro- vided by third parties through an API. Last year, OakNorth became the first bank in the UK to have its core system fully hosted on the cloud. It had previously wanted to go down this route, but because there was no cloud policy in place, was unable to make the leap. Things change, however.
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Other challengers are following suit. In mid-December, Metro Bank in the UK announced that it had moved its IT infrastructure, including its core banking operations (run on Temenos’ T24), its digital offerings (Backbase) and ATMs, to Rackspace’s cloud offering. It took Metro Bank 12 months, but in theory should take mobile-only ventures such as Starling, which has built its IT system from scratch, even less time.
As Francesca Gandolfo, Chief Operations Officer at OakNorth, pointed out to IBS Journal earlier this year, while it will be much harder for larger banks to move to the cloud due to their legacy IT infrastructures, more are considering it as a result of mounting pressure to cut costs and increase flexibility. Last year, Deutsche Bank admitted that it had been thinking about providers such as AWS and Azure for
ore banking systems can be viewed as
three years, and that while use of public cloud by big global banks is “very small,” it expects adoption to grow signifi- cantly in 2017.
But whilst being in the cloud is suitable for all, it might not be possible for everyone. This is because for many FIs, the biggest challenge is bureaucracy and the fact that often the IT department works separately to the rest of the business. If you don’t have support from the top-down, moving to the cloud will be a long-winded and painful process, Gandolfo argues.
Core banking, of course, remains a key area for IBS Journal. The January issue included our annual supplement, featur- ing interviews with the likes of Misys, Temenos, FIS, Path Solutions, Avaloq, Nymbus and Leveris. And in this edition, we bring you our annual Sales League Table (SLT), the definitive overview of the core banking market. Last time around, Temenos came out on top, reclaiming the number one spot, which it had held in 16 out of the last 17 tables. The study, the result of extensive research conducted by IBS Intelligence and Cedar Management Consulting, re- vealed that the banking technology sector was recovering from the 2008 crash, slowly but surely.
Who is top dog in the new SLT? And is the industry continu- ing its upward path? Turn to page 22 to find out.
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