US market drivers


Why do US banks change their core systems? There are some common themes when looking at what banks state as their main drivers and goals for such projects. There is plenty of chopping and changing, sometime more to do with the frustrations of the existing platform, it seems, than anything else. Other common goals are improved channel delivery, a desire to broaden the product range, and system consolidation. Overall, despite some banks heading in the opposite direction, the shift has continued to be from in-house to hosted.


Vendor dissatisfaction


When looking at why banks in the US change core systems, it becomes clear that a key reason is often, simply, dissatisfaction with the existing supplier. This seems most prevalent when the bank is on an outsource arrangement. There is no obvious correlation when it comes to the winners and losers among the suppliers within these shifts. One exasperated bank was Casey State Bank (CSB), with


ten branches across Illinois and Indiana and over $250 million in assets. It selected the Nupoint core banking solution from Computer Services Inc (CSI) on an outsourced basis in late 2012. CSB had been using the Precision offering from Fiserv on an in-house basis for over six years. However, Brad Wolfe, president and CEO of CSB, explained that it had become frustrated with this, and a combination of other systems. The bank had Precision, ComplianceOne from Wolters Kluwer Financial Services for loan and deposits management, an imaging system from a US-based provider, CSPI, and a local hardware company that was ‘trying to make it all work’, he said.


CSB hoped that by switching over to Nupoint on an


outsourced basis, it would be able to cut its IT costs and reduce the complexity of its operations. CSB opted against upgrading its existing Fiserv systems, as Wolfe felt there were some issues with the vendor. ‘We don’t get a lot of service out of them,’ he said. He added that whilst there was a great sales pitch from Fiserv, the vendor’s attention to the bank wavered after implementation.


Reading between the lines, it was possible to see similar frustration at Busey Bank, a $3.5 billion institution with 43 branches across Illinois, Indiana and Florida. This also moved to CSI’s Nupoint. The bank’s executive vice- president and CIO, Leanne Kopischke, believed the system’s usability and functionality gave the bank a powerful tool. Busey had previously been using Fiserv’s Navigator and Expedite, but a number of factors, including the need for greater efficiency and user friendliness, facilitated the need to improve its core banking system. Busey found that CSI was more accommodating to its business needs. ‘Everybody has different requirements, and for us they were high service levels, having a strategic partner that would


US Financial Services Technology Market Report | www.ibsintelligence.com 13


help us grow, usability on our front line and integration support,’ said Kopischke. It was interesting to hear Jack Henry’s VP and CTO,


Mark Forbis, on the subject of why a bank shifts from one supplier to another. With the end of the de novo in the US (at least for the foreseeable future), new deals are, by definition, replacements. ‘It feels like, to us, that when we get a customer, most of the time the catalyst is service,’ he said. Each of the main vendors had solid solutions, he felt, but sometimes a problem is that a data center isn’t performing. There might be an unlocking of the clients from a particular center in a particular state where this occurs. On occasions, he added, the core is changed because a bank wants to improve its channels. This might not always be the intention at the outset, as banks can always select new channel offerings separate from the core, but when they see the integration that is available by taking a new core as well as channels, this can influence them. ‘It is a bit like going to buy new tyres but ending up buying a whole new car,’ he said.


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