IBS Journal March 2015


business from the three dominant domes- tic vendors (Fiserv, FIS and D+H) via its SaaS version of T24 derived from the 2013 acquisition of Trinovus. ‘Banks, communi- ty banks and credit unions are extreme- ly upset by underinvested products,’ he suggested. The US market experiences between six and seven per cent churn per annum, estimated Arnott, and Temenos hopes to be able to pick up a share. Temenos has also gained its first live site in the country for T24, Independence


National Bank, as it switched to the new system on 1st December last year. Temenos is continuing the scaling up


of its resources in the US, and has further bolstered its presence with the acquisition of Philadelphia-based loan origination and collections specialist, Akcelerant. The acquisition comes with a $50 million price tag, with a further $5 million due subject to an earn-out over the next three years. Akcelerant will bring $15 million in reve- nues, although it is only expected to be


break-even in 2015, reaching group mar- gins by the end of 2017. Akcelerant claims 600 customers, mostly in the credit union space, and brings 130 staff. CEO, Jay Mossman, will stay on as CEO with the remainder of the management team, and will join the Temenos USA management board. Moss- man claimed that 60 per cent of credit unions with over $1 billion in assets in the US run Akcelerant’s software, and that 75 per cent of its revenue is recurring.


Farm Credit Bank of Texas to pioneer Misys front-to-back commercial lending offering


Farm Credit Bank of Texas (FCBT) is like- ly to be the first customer to go live with Misys’ CustomLender lending origination and credit workflow management front- end integrated with the supplier’s syndi- cated lending system, LoanIQ. Misys add- ed CustomLender to its product suite last year when it bought US supplier, Custom Credit Systems (CCS). FCBT, a cooperatively-owned whole- sale funding bank, has been a user of LoanIQ since 2008. It replaced FIS’s ACBS. The bank provides services and funding to 14 parent banks across New Mexico, Texas, Alabama, Mississippi and Louisiana. These originate the loans, with the focus on agri- cultural businesses, as well as offering res- idential loans. Michael Elliott, CIO at FCBT, explains


that the bank started its search for a front- end ahead of Misys buying CCS. Indeed, at that stage, CustomLender was resold by Sungard, within a bundle of solutions that were branded as Ambit Commercial Lender. There are four other US farm credit banks and one of these, California-based AgFirst Farm Credit Bank, had bought Ambit Commercial Lender in the first half of 2014. There is a close working relation- ship between FCBT and AgFirst, including sharing a lot of syndications, says Elliott. This was one influence for FCBT. There was also a good functional fit and, from a start- ing list of 42 systems, the Sungard solution ended up in pole position. The validation of that decision was


underway ahead of contract signing when


it was announced that Misys was buy- ing CCS. Elliott believes the acquisition of what he describes as a ‘very flexible, con- figurable system’ was inspired by Misys’ ambitions to move into the mid-market. A benefit of the acquisition for FCBT is that previously it would have had to build all of the integration between LoanIQ and CustomLender, now this is part of Misys’ roadmap. FCBT is still separately taking a couple


of the components that made up Ambit Commercial Lender, including Sungard’s Optimist credit risk management solution. For CustomLender, a benefit is that AgFirst is a couple of years ahead of FCBT so some of the requirements that are specific to its farm credit model will have been made. However, AgFirst does not use LoanIQ, so this will be a key difference. Elliott says LoanIQ is ideally suited


to the bank’s structure as it is ‘relatively loosely coupled’ and has a ‘multi-tenant structure’. The bank was also reassured by the number of large US banks with the system, including a couple that had decid- ed to move from ACBS. Between ACBS and LoanIQ, the bank had acquired Jack Henry’s relatively broad Silverlake core banking system but this did not work out. In LoanIQ, Misys has a complex engine that needed to be simplified for FCBT; Jack Henry had a simple engine that needed to be complicated. The bank decided, after some effort, that the former was easier than the latter. The analysis stage for the Custom-


© IBS Intelligence 2015


Lender project is underway, at the end of which FCBT will have a better idea of timescales. The emphasis will be on not rushing, says Elliott, as this will be a ten- year asset and the main goal is to satisfy the needs of the 14 banks, with the focus being improved competitiveness and reduced operational costs. The LoanIQ implementation went reasonably well, although there was considerable room for improvement in Misys’ professional servic- es resources at that time, says Elliott. How- ever, LoanIQ had less of an impact on the associate banks than will be the case with the new front-end. ‘It will change their whole world.’ The Optimist component will be


quicker to implement, with Elliott expect- ing a go-live in some pilots before the end of the year. ‘There is also a large data ware- house initiative underway, there are lots of different turning wheels,’ he says. One of those wheels is a major upgrade of Loan- IQ. FCBT is on version 6.5, which is written in Smalltalk. It has version 7.x, which is Java-based, on a test basis and will need to move to 7.4 as there is functionality coming in this version, particularly for pay- ment disbursement, that will be needed. It will be this version that CustomLender will be integrated with. Within Misys’ rebrand- ing of its product set, LoanIQ is now Misys Fusionbanking LoanIQ and CustomLender is Fusionbanking Credit Management Enterprise. Together, they are marketed as the Fusionbanking Lending front-to-back office solution.


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