g 2012 analysis
It became clear when the 2012 analysis was underway, but also perhaps for observers ahead of this, that 2011 wasn’t the low point for the sector after all. The depressed nature of the core systems market continued and, indeed, 2012 was the quietest yet. Far from deciding to replace their legacy platforms, most institutions were willing to keep them patched up for at least another year. This was still particularly the case among mid-tier and larger banks, with no return to the pre-crisis activity in this segment. Some of the projects that started ahead of the financial and economic turmoil rumbled on and a few saw breakthrough cutovers during 2012, but large banks setting out on such a journey comprise low single figures each year. From a geographical standpoint, the one ray of light
was Africa, with appreciably more sales in 2012 than 2011, while at least a few other regions more or less held firm. The clearest drops were in Central and South-East Asia (far less activity in markets such as Bangladesh and Nepal), and Western Europe. The lack of life in the latter was reflected in the fact that the core banking system heavyweights, Oracle FSS and Temenos, picked up one and two deals respectively (a small domestic bank in Southern Europe for the former, two small international operations in Luxembourg for the latter).
the core, rather than the core itself. Understandably, compliance and risk management
No doubt much of the activity continued to be around remained areas for
investment, with this likely to have a dampener effect on the core systems market. In the long-term, the way to avoid adding yet more software, spreadsheets and extraction programs is to streamline the architecture, but the burden of the requirements means that stop-gap solutions are the order of the day for many. Much the same was true in payments. While not a focus of the Sales League Table, there was a lot of work going on in 2012, particularly in Europe for SEPA, which looked likely to push the core system replacement plans down the ‘to do’ list for another year. The activity here often mirrors the core systems market, with typically less than optimum solutions being implemented to meet the regulatory deadlines rather than banks seeing this as the moment to streamline and transform. At the channel level, there was a fair amount of activity,
particularly as banks realised that mobile banking was not a fad and that their first generation internet solutions had already become outdated. Once more, the best channel delivery, with seamless movement between the channels, fast time-to-market, slick support of multiple devices, and real-time, single customer view, are likely to need a solid, real-time core, but for the time-being there are still improvements that can be made by putting new layers in
front of the legacy. Of course, when talking about the lack of activity in the
core market, it is important to remember just how much activity there was up to 2008, so there are plenty of tier three and four banks that have had successful projects in the last decade and are benefitting as a result, with no need to replace. What has been more surprising is the lack of enthusiasm for core renewal by the rest. There will be a competitive advantage for those that have newer platforms but, for under pressure managers, perhaps fearful of their jobs and/or their own institutions’ long-term futures, that seems insufficient to embark on the multi-year, high-risk renewal programmes. There were a couple of other factors that are worth
noting. First, the need for renewal as a result of industry consolidation had abated of late. Where suppliers, most clearly Temenos, acquired companies for their user bases, there were initially pronouncements about support for only another three or five years. A few users moved, although not always to the new owners’ systems, but most did not and, in time, the reality of the situation and the desirability of the continued maintenance revenue meant the old systems were given a stay of execution. Those acquired systems, such as Viveo’s
V.Bank, are dying but it is a longer death than initially intended. Second – and suppliers are not going to like this – there
is an argument that the lack of new systems is one of the biggest reasons for the lack of new sales. When banks analyse the options, they are often underwhelmed. For one thing, despite the fact that the Sales League Table looks well-populated, there is fundamentally too little choice. Most systems on the Table have roots of 20 years or more, a fair few look to be in decline, there are understandable concerns about the delivery track-record of the sector, and many systems can be excluded as soon as a bank defines a few high-level requirements. For instance, if you want a core system that is proven for mid- to high-end retail banking, the shortlist will pick itself; if you want a system which is live and proven for universal banking in any particular country, then again it really doesn’t need much analysis to identify the systems that qualify. What about real-time processing, a 360 degree customer view, truly flexible workflow to support process reengineering, perhaps Java or .Net rather than older technology? Of course, suppliers would argue that a 20 year-old
system means 20 years of investment, based on input from many banks, ensuring best practice. And it would be wrong to be too dismissive of some of the smaller suppliers and more regional or lower profile systems. Some of these, such as Lebanon-based BML Istisharat and Norway-based CBA, have quietly gone about significant rewrites. Sword Apak in
Market Dynamics Report
www.ibsintelligence.com
27
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112 |
Page 113 |
Page 114 |
Page 115 |
Page 116 |
Page 117 |
Page 118 |
Page 119 |
Page 120 |
Page 121 |
Page 122 |
Page 123 |
Page 124 |
Page 125 |
Page 126 |
Page 127 |
Page 128 |
Page 129 |
Page 130 |
Page 131 |
Page 132 |
Page 133 |
Page 134 |
Page 135 |
Page 136 |
Page 137 |
Page 138 |
Page 139 |
Page 140 |
Page 141 |
Page 142 |
Page 143 |
Page 144 |
Page 145 |
Page 146 |
Page 147 |
Page 148 |
Page 149 |
Page 150 |
Page 151 |
Page 152 |
Page 153 |
Page 154 |
Page 155 |
Page 156 |
Page 157 |
Page 158 |
Page 159 |
Page 160 |
Page 161 |
Page 162 |
Page 163 |
Page 164 |
Page 165 |
Page 166 |
Page 167 |
Page 168 |
Page 169 |
Page 170 |
Page 171 |
Page 172 |
Page 173 |
Page 174 |
Page 175 |
Page 176 |
Page 177 |
Page 178 |
Page 179 |
Page 180 |
Page 181 |
Page 182 |
Page 183 |
Page 184 |
Page 185 |
Page 186 |
Page 187 |
Page 188 |
Page 189 |
Page 190 |
Page 191 |
Page 192 |
Page 193 |
Page 194 |
Page 195 |
Page 196 |
Page 197 |
Page 198 |
Page 199 |
Page 200 |
Page 201 |
Page 202 |
Page 203 |
Page 204 |
Page 205 |
Page 206 |
Page 207 |
Page 208 |
Page 209 |
Page 210 |
Page 211 |
Page 212 |
Page 213 |
Page 214 |
Page 215 |
Page 216 |
Page 217 |
Page 218 |
Page 219 |
Page 220 |
Page 221 |
Page 222 |
Page 223 |
Page 224 |
Page 225 |
Page 226 |
Page 227 |
Page 228 |
Page 229 |
Page 230 |
Page 231 |
Page 232 |
Page 233 |
Page 234 |
Page 235 |
Page 236 |
Page 237 |
Page 238 |
Page 239 |
Page 240 |
Page 241 |
Page 242 |
Page 243 |
Page 244 |
Page 245 |
Page 246 |
Page 247 |
Page 248 |
Page 249 |
Page 250 |
Page 251 |
Page 252 |
Page 253 |
Page 254 |
Page 255 |
Page 256 |
Page 257 |
Page 258 |
Page 259 |
Page 260 |
Page 261 |
Page 262 |
Page 263 |
Page 264 |
Page 265 |
Page 266 |
Page 267 |
Page 268 |
Page 269 |
Page 270 |
Page 271 |
Page 272 |
Page 273 |
Page 274 |
Page 275 |
Page 276 |
Page 277 |
Page 278 |
Page 279 |
Page 280 |
Page 281 |
Page 282 |
Page 283 |
Page 284 |
Page 285 |
Page 286 |
Page 287 |
Page 288 |
Page 289 |
Page 290 |
Page 291 |
Page 292 |
Page 293 |
Page 294