was for ‘a one-stop solutions provider’, the deal was by no means guaranteed and Bintube said that he would search elsewhere if necessary. By the end of 2011, Bintube said that the system was live, supporting accounts for directors and staff, and with a hoped-for start date of 6th January 2012. There were a couple of leaner years for Path, in 2010 and


2011, from the perspective of new-name wins. From 13 new- name deals in 2009, it slumped to four in 2010 and three in 2011. In fact, Path’s lower total in these two years could be attributed less to the general decline in deals available than to an apparent loss of traction. It won nine of 17 Islamic deals in the Middle East in 2008, seven of 15 in 2009, two of 15 in 2010 and two of twelve in 2011. Temenos overhauled its regional competitor in 2010, winning three Islamic deals compared to Path’s two, and each won two deals in 2011. A notable departure at the end of 2011 was Moukadam, who left to join rival SAB after 18 years at Path. At SAB, Moukadam took the position of managing director of its newly-launched subsidiary in Dubai, SAB International, to cover the Middle East, English- speaking parts of Africa, Asia and Asia Pacific. In terms of market conditions, Kateeb explained that a combination of the economic distress in Europe and the Arab Spring had ‘created a lot of uncertainty in the region’. While many banks had large cash reserves, some were in acute difficulty. The most recent example was Bahrain-based Arcapita Bank, a Path client, which owned a portfolio of Western companies and had faced rising borrowing costs


Revived sales


Towards the end of 2011 and into 2012, Path claimed to be seeing an increasing number of discussions, circulation of RFPs and so on, an assertion that was subsequently backed up by a revival in new-name sales. The supplier had signed two deals of late, comprising Bank Nizwa in Oman, the first standalone Islamic bank in the country, and Bank Asya, a Turkish Islamic bank, for a new operation in Iraq. Kateeb was most optimistic about North Africa, specifically Morocco, Tunisia, Egypt and Libya, where authorities were now more amenable to Shari’ah- compliant finance. ‘From past experience, a change in regulation presents an opportunity,’ Kateeb felt. In Egypt, Path had acquired a local firm in 2010, INC Egypt, which developed investment software for SMEs and was touted as part of its plans for African expansion.


A further tangible sign of the activity was two signings


for Path in Q1 2012. First, Bank Dhofar became the third iMAL taker in Oman, followig on from Bank Nizwa and Ahlibank. Oman-based banks had been decreed by the country’s authorities to fully separate their conventional and Shari’ah-compliant activities, so there were a number of tenders for dedicated Islamic core solutions circulating at this time and a number of implementations already


338 under way.


Bank Dhofar’s new subsidiary was set up to provide universal banking services in accordance to the Shari’ah principles, so it signed for a complete, front-to-back office solution from Path, including internet and mobile banking modules, said Kateeb. Cedar Consulting helped the bank with the selection, and Path’s main contender for the contract was Infosys, which was Bank Dhofar’s incumbent supplier. Infosys’ Finacle was selected there in 2008, to replace the Misys Bankmaster legacy solution. Other vendors, including Temenos and ITS, were evaluated at earlier stages. The bank had an aggressive timescale to launch, says Kateeb, and the first phase – gap analysis and requirements – has already ‘kick- started’. Banks in Oman are rushing to capitalise on the Islamic banking opportunities so time is of the essence, he says. The other deal at this time came in Pakistan, with Burj Bank opting to replace Sungard’s Ambit core system with iMAL. The bank went through rebranding in 2011, until then it was known as First Dawood Islamic Bank. It was also known as Ambit’s (Symbols at the time) first fully-fledged Islamic customer in Pakistan and only second globally. The deal was signed in 2006, when the bank was formed. ‘Ambit,


Universal Banking Systems Market Report | www.ibsintelligence.com


since uprisings in the country. ‘The investment banks are struggling, and transparency has been lacking. Issues are still arising, and people don’t know what is going on at these banks and what their exposures are,’ said Kateeb. This accounted for the lack of new deals, said Kateeb, and in the meantime Path had been focusing on broadening its solution to capture follow-up business with existing customers. Risk management, business intelligence and reporting tools had been redesigned, and new modules written including mobile banking and corporate internet banking. Meanwhile, Kateeb felt that the average size of new deals


had decreased compared to previous years, and this had coincided with suppliers discounting their systems. ‘Some of the deals we elect not to go after as they are not going to be profitable,’ he said. He cited Military Credit Fund, which signed with ICS in November 2011, as an example. This, along with Al Baraka Turk Participation Bank, which also signed with ICS, for its branch in Erbil, Iraq, went for around $200,000, Kateeb claimed. ‘When you sell a core banking system for $200,000, this sets a precedent, and it’s very hard to persuade another bank, even if it is five times the size, to pay $1 million.’ Kateeb also felt that international vendors like Temenos and Oracle had been offering in the region of 50 per cent off, although Temenos’ CEO, Guy Dubois, had recently stated on an analyst call that ‘we have been able to defend our pricing’.


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