Fincentric


Bolstered by the arrival of the venture capital money, Open Solutions made its swoop for Fincentric. Until early 2001, Fincentric was known as Prologic. It had a Windows-based retail back office system which was originally launched as the Relational Banking System (RBS) in the late 1980s. The system was subsequently rebranded as Ovation and then, in 1999, as i-Wealthview (subsequently becoming plain Wealthview). The Canadian supplier had remained independent and had gained success among small to medium-sized financial institutions, in North America and beyond, building an international user base. The system originated from a development at Richmond Savings, a Canadian credit union. Prologic was set up in Richmond in 1984 and worked on the development over the next three years. The new company was backed by a number of venture capitalists. The Canadian credit union market was an initial target, with considerable success either selling directly to the credit unions themselves or to their service bureaux. Until the first half of the 1990s, most activity was in Canada, with an office opened in Vancouver. The change from RBS to Ovation 1.0 officially took place in 1991. The original system was DOS-based. The Windows NT version of Ovation was launched in 1995.


The move outside of Canada occurred slowly. By the mid- 1990s, known international takers were limited to McLaughlin Bank in Curacao and two banks in Mexico, Banco del Sureste and Banco Industriale. In the UK, via a partner, it gained trade union bank, Unity Trust Bank, which cut over in April 1996. There was a multi-site deal from Amex Bank, a mutual fund/ service bureau deal from Nomura Research Institute, another deal in Japan at Nagasaki Kenmin Bank, plus a couple in Australia at credit unions. There was also a win in South Africa, at an offshoot of ABSA Bank, and then another at Old Mutual. In 1999, the largest private bank in Cuba, Cimex, signed, and there was another success in the UK, at Fleming Private Banking, then Cheshire Building Society. There was a network of partners and the likes of Microsoft and Compaq showed enthusiasm. There were also a few takers in the US, the largest being Houston-based Compubank. In Mexico, Banco Inbursa took Wealthview for a virtual bank. However, there was increasing competition in Fincentric’s Canadian market and a few setbacks overseas, including a cancelled project at Derbyshire Building Society. In the US, Amex Bank moved more slowly than intended, while a start-up bank of AMP in New Zealand, Ergo, gave up on an implementation. The supplier’s headcount fell from 280 to 180 and a number of US offices were closed. The main sales progress reverted to the low-end of the Canadian market, with the occasional US win, so basically where the supplier started. Takeover by Open Solutions was announced in April 2007.


Hernandez said the deal, for an undisclosed amount, came about as a ‘mutual agreement based on strategic fit’. He was not aware of any other business approaching Fincentric at this time. He cited the buy-out as being consistent with Open Solutions’ global expansion strategy. ‘Acquisitions are always a major part of how we think about markets,’ he said, adding that this deal would ‘solidify our position in Canada’ While Fincentric’s installation base outside of Canada was not extensive, it would bring ‘important relationships in many of the regions we are starting out in’, said Hernandez. These included central Europe, Latin America and Asia. He anticipated that the deal would see Fincentric fulfil the ‘promise and vision’ that some of its Canadian customers had looked forward to, the vendor not previously having been in possession of the ‘financial wherewithal’ to deliver. Hernandez believed Open Solutions had the ‘broader sweep’ of functionality, with Fincentric focusing primarily on the core processing and wealth management areas. Hernandez was categorical about the way forward: Although there would not be an immediate announcement of the discontinuation of the Fincentric core platform, Open Solutions would only carry the product ‘for a little bit longer’. There was no set timeframe for its demise, but its user base had been advised of Open Solutions’ plans. ‘What we will do is take the best of what they have and build it into our single platform and that will be the platform that we use going forward.’ Fincentric customers would then progressively be shifted to the new aggregated core platform, which would be ushered in as an upgrade somewhere down the line. In other words, Open Solutions planned to do with the Ovation/Wealthview users exactly what it had done with the client bases of its other acquired companies. Architecturally and philosophically, both systems had


‘enjoyed a lot of the same attributes’, said Hernandez. ‘We’re hoping to make an easy transition for many of those clients.’ Progress along this line, he added, would be dictated by the clients and the level of gap. Fincentric’s customer base would also be approached with the raft of products that would come with the shift to the Open Solutions platform Fincentric was brought into Open Solutions Canada, with


Fincentric’s president and CEO, Robert Nygren, remaining on board until 2008. Overall leadership of the Canadian operation remained with existing president, Blair Goulet (he left Open Solutions in late 2009). ‘All the operational heads will remain with the company and they will be blended into the Open Solutions Canada, North America and Asia operations,’ said Hernandez. Fincentric had taken a careful view on cost containment over the last couple of years, he noted. ‘They’re not heavy on excess personnel.’ Most of the employees would


Universal Banking Systems Market Report | www.ibsintelligence.com 113


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