At a corporate level, late in 2006, it was announced that Open Solutions was to be acquired by the Carlyle Group and Providence Equity Partners. A definitive agreement was signed which saw the supplier change hands in a transaction valued at over $1.3 billion. The deal was approved by stockholders in February of the following year. In mid-2007, the vendor gained its then largest core banking system deal, with Michigan-based Flagstar Bank, the 16th


The arrival of DNA


Around this time, TCBS /TCCUS was going through a revamp and rebrand. The ‘total refresh’ process took place between 2006 and 2008 and had an investment put at $100 million. This period also saw investment in infrastructure and people, as well as management and organisational changes. A separate payments spin-off was set up, specialising in the North American ATM/POS market. In summer 2011, it was bolstered by the acquisition of the assets and staff of Calypso Canada, a local provider of communication and processing services for ATMs. As a result, the total number of devices on Open Solutions’ ATM network exceeded 12,000. The rationale of this enterprise-wide transformation, said the company, was to facilitate Open Solutions’ growth in the following ten to 15 years. The TCBS/TCCUS system was converted


from the


client-server application to a Microsoft .Net core processing platform with Oracle relational database. Nine different lines of source code were consolidated into one. The only thing that remained unchanged was the system’s financial data model, with ‘the entire new system built around it’, according to Open Solutions’ SVP of strategic channels at the time, George McGourty (he left the company in late 2011 to join Misys). The vendor then offered the new version, called DNA, to the TCCUS/TCBS users for free, with a two-year window to upgrade. The company wanted everyone to be on the same platform, so that it didn’t have to maintain multiple systems and decide which systems to invest in for the future, explained McGourty.


G&F Financial Group was the first credit union in Canada to convert to DNA. By mid-2011, all but 20 Canadian credit unions (on Celero’s Eroworks) were on DNA. The remaining credit unions were due to migrate to the new platform before the year-end. A major differentiator from competitors, according to Open Solutions, was that it now came with a DNAappstore, an international community of DNA users and partners that collaborate, develop and share various applications and functionality based on the DNA platform without changing the source code. This has been taken up with enthusiasm by a number of users, particularly Redstone Federal Credit Union, and in the 18 months after the launch of the appstore in May 2011, Open Solutions claimed 900 apps had been downloaded. There was also another version of DNA, CUnify (covered in the wider Fiserv entry), which was aimed at very small credit unions in the US, with under $100 million in assets. DNA underpins a number of regional bureaux. For instance, there


80


largest thrift in the US with $15.4 billion in assets at the time (the bank sold parts of its network after the financial crisis hit). Fiserv Inc., announced that its DNA™ account processing


platform was selected by Farm Credit Services of America (FCSA). Fiserv technology is likely to be used by FCSA for modernizing its loan accounting and servicing for agricultural real estate loans, operating lines of credit, installment loans and rural home loans


is COCC, a client-owned supplier based in Connecticut, with an outsourced core offering, Insight, which is a white-labelled version of DNA. The vendor’s acquisition trail continued. In 2007, it made a purchase in Canada, of Fincentric Corporation. Open Solutions’ chairman and CEO, Louis Hernandez, cited the buyout as being consistent with the vendor’s global expansion strategy. He believed this deal would ‘solidify our position in Canada’. Although there was not an immediate announcement of the discontinuation of the Fincentric core platform, Open Solutions’ model was consistently to try to move user bases to its own flagship system. Fincentric had a retail banking system based on Microsoft technology that was widely used in Canada. It also had made a few incursions to the US and elsewhere, but much of the activity had been in its home market in the years directly before it was bought.


The Fincentric system was known as Relational Banking System (RBS, an early DOS version) in the late 1980s, then as Ovation (a Windows version released in 1995), followed by Wealthview. A move was made to sell the system internationally, particularly working with local partners, such as EDS, Siemens and Compaq. The Canadian roots meant that, from the outset, the system was multi-lingual. It was centered on SQL Server, was written in C on the server and Visual Basic on the client. However, Open Solutions appeared to find it difficult to build on its position with Fincentric. One Wealthview user – Stanford Federal Credit Union (US-based $1.2. billion institution) – was known to have opted for DNA. The deal was announced in 2011. Also, Canada-based software house, CGI, signed to move its bureau from Ovation to Wealthview, then ultimately to DNA. By 2011, Wealthview was no longer promoted. However,


‘it is kept alive and well in the maintenance mode’, according to McGourty. By then, the system had 22 users in Canada and 25 users outside, some of which were described by McGourty as multi-billion dollar entities, so the company continued to ‘make small investments’ in the system, to enhance and support it. In due course, he said, the Wealthview users would be offered a DNA upgrade path but in 2011 the vendor saw no interest from them in embarking on large-scale core banking conversions. This ‘maintenance mode’ was expected to continue until 2020 or so. The system sells in reasonable numbers and the supplier claimed that in 2013 more than 50 users renewed their contracts.


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


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