two mid-tier UK banks came out with decisions for their core retail operations – Nationwide and Co-operative Financial Services, turning to SAP and Infosys respectively (Nationwide pressed on and had some cut-overs in 2012 and 2013 but the Co-op, for a variety of reasons, gave up, with a £151 million IT systems write-off). In the Netherlands, F van Lanschot sought a fairly radical overhaul, so too KAS Bank (there was a major down-sizing aspect to this latter project). In Iceland, Kaupthing Bank had sought to transform its operations and Glitnir was seeking to do the same with its One-G project. It looked as though in the new-look post-crisis financial
services market there would be a return to traditional values and ways of competing, with the emphasis back on things like operational efficiency in transaction banking (payments has been a focus), customer service, rich and flexible channel delivery, time to market for products, ability to cross-sell, liquidity and risk management and control. To a degree, the experiences of the last few years should have emphasised this – for instance, those banks that could take savings over the internet benefited from the high degree of churn of funds as the crisis set in. The pressure to stand out from other banks will not go away and, indeed, should
become more intense. There does seem to be a pick-up in urgency in at least the analysis being done by some of those banks that have been left intact, even if this isn’t equating to large numbers of strategic decisions at present. The landscape of change, driven by the advent of digital
and its implications to the technology architecture, could perhaps be summarized across four broad trends that are observed, in some shape or form, across global, regional and local banks. Even for those who have not adopted these as yet, the currents are felt to be quite strong that will indeed propel the investments and management focus in the direction of these: 1. Driving the channel and touchpoint integration 2. 3.
Leveraging data and analytics driven architecture
Improving the payments engine with the digital emphasis
4. And of course, the central, core banking engine And when it comes to core banking systems, based on
how old the platform is, and how much it lends itself to the demands of the new age, the options that banks have vary between upgrading to a later version and simply having it replaced.
The methodology
It is always useful to outline the methodology used for the Sales League Table and important to understand what it does measure and, as importantly, what it does not. IBS, by virtue of being the specialist in the operations and core banking systems space, tracks the market throughout the year, so picks up a lot of the selection decisions. Many are covered in our monthly flagship, the IBS Journal. At the end of the year, we go to the core system suppliers and ask them to provide us with a list of the new-name deals for the year. New-name means we are not looking at sales to existing customers (upgrades, additional modules, new sites). We also do not include hosted microfinance deals as these were looking as though they would misleadingly skew the results. For the same reason, we have also from 2009 discounted the low-end Indian deals, mostly also sold on a hosted
basis. These have proliferated as a result of the opening up of this end of the Indian market, all have gone for domestic solutions, and as a result the suppliers of these would see artificially inflated results which would not reflect what the Table is all about: international business. For all the science, here as at an individual deal level, we will factor in common sense, so will consider the merits of supplier claims – for instance, if a bank had a single far-flung site for a system and then signed a large deal for head office or for a number of other sites after a competitive tender, then we would not exclude this from the count. On ‘borderline’ cases, we enter into one-to-one discussions with the relevant parties to allow an informed decision (suppliers can become fairly passionate about their rankings so dialogue is common). Discussion and judgement is also applied to how we deal with particular systems. It is fairly common for suppliers
to claim that two or more systems are actually a single platform so should be granted a single total. We resist such a move until we are convinced that the integration has been done and there is truly sufficient fusion to constitute one platform. This explains why a small number of systems have seen a different categorisation and handling over time. Suppliers are allowed to submit their new-name wins on an off-the-record basis, in which case their identity will
not appear. However, we cannot accept totals without the names. Once we have received the submissions, we do our cross-checking (such as versus the previous years’ claimed wins, with all known deals and installations held on a single
10 Market Dynamics Report
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