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IBS Journal June 2015


SAP claims ‘another record year’ for banking software business


This sector is still dwarfed by SAP’s other verticals, but its appetite to grow and take on global and regional software competitors is clearly strong.


any core banking system implementations there yet,’ he explains). SAP for Banking core banking system: the US aspirations


The mid-tier sector consisting of region- al and super-regional banks is the target market for SAP in the US, and the vendor


around eight system selections. None of these, however, are the Hogan


core system users, and the earlier partner- ship with Hogan’s supplier, CSC, seems to have gone into a dormant mode. SAP’s management has expressed its disappoint- ment at the lack of deals here, as there was expectation that the Hogan user base would be willing to move away from its ageing software (which is now largely in maintenance mode, with CSC carrying out bespoke work on its existing instal-


the shrinking pool of Hogan specialists (as they are reaching the retirement age). -


ment, with CSC and SAP striking a part-


later, the two parties took a step further and announced a cloud-related partner- ship, with SAP core system now available to the US clients on the CSC cloud. There has been no spark of enthusiasm so far (and of those very few that have initiated an IT overhaul, other suppliers were chosen, to IBS’s knowledge). One long-standing user, Keybank (the bank also runs FIS’s Systemat- ics), has recently gone on the record saying that it is happy with its existing core and has no plans to change it. It has described the platform as ‘rock solid’ but over time its functionality has been reduced to just transaction processing, supplemented by an enterprise service layer around it that deals with all the business logic. Anoth- er Hogan user, PNC Bank, is focusing on applying the Banking Industry Architecture


16


Sapphire 2015, Orlando ©SAP


Numbers so far -


cial services generated $1.5 billion in revenue for the vendor in the last year. Revenue generated by cloud-based products and services increased by 65 per cent in the sec- tor in 2014. There are now 1000 people in SAP’s banking unit. The partner revenue share


is 25 per cent, and there are plans to increase it to 40 per cent in the next couple of years, says Rieker. So far, 3000+ partner resources have been enabled. ‘Around the world, over 650 million accounts are managed with SAP for Banking


today. It took us ten years to get to this number, and we’ll double it in the next two to three years,’ Rieker states. ‘Our message to the market is clear: bank simple, run sim- ple, transform simple. Simple wins!’


Network (BIAN) compliant framework around its core software rather than tak- ing the ‘rip and replace’ route, at least for the time being (an in-depth case study on PNC’s technology strategy can be found in the March 2015 edition of the IBS Journal).


‘CSC and SAP have invested a lot in the resources and have built up expertise, so we are fully prepared for the time when the banks are ready to move,’ Wainwright com- ments. There are a dozen or so Hogan users in the US.


© IBS Intelligence 2015


www.ibsintelligence.com


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