Make-up And Evolution The Market


To understand today’s market and offerings, it is worth spending a short time considering its history. For one thing, even some of the current best-selling offerings have roots that go a long way back. At the outset, the source of retail banking systems tended to be the US. Over time, other applications emerged from elsewhere around the globe, with Europe, Australia, the Middle East, Asia, and Asia Pacific all making contributions. India became an ever more important source of software, including offerings from some of the domestic heavyweight suppliers. Another, rarer source, has been the in-house development that has been turned into a commercial offering. And a third source has been other sectors, with suppliers seeking to move their applications across into the typically higher-value retail domain. The early US-derived offerings were primarily mainframe- based and typically came out of individual banks or groups of banks. Some remained firmly in their domestic markets; some tried to make it onto the international stage and failed, due to their single currency nature and/or the fairly broad differences between retail banking in the US and the rest of the world. Two that made their mark in a big way outside of the US were Systematics and Hogan. The former made strong inroads in Latin America and Asia Pacific; the latter moved into Europe. These were primarily systems for mid-to-large banks. The


source code was typically provided and this formed the basis for bespoke developments. Big US banks were among the recruits. Systematics gained Citibank, Chase and Chemical Bank as customers, for instance. However, by the start of the 1990s, the systems were showing their age, with flat files no longer in favour. Both changed hands. Systematics was acquired by Alltel, Hogan by Computer Sciences Corporation (CSC). While sales continued to come in, the systems started to shine less brightly as the decade progressed. Also back at the start, there were a number of smaller US-


derived offerings, from the likes of Eastpoint Technology (with a Wang-based offering), Kirchman, Jack Henry & Associates (with an IBM midrange-based solution), and Capital Services Group, with Capbank (later to metamorphosise into Baton Rouge and its Total Concept offering). At the end of the 1970s, Citibank started to sell an in-house developed IBM midrange- based system. This was ultimately taken up by Fiserv and


became ICBS (rebranded today as Signature). At around the same time, a DEC and Mumps-based system was emerging from a US company called Sanchez, set up by two brothers (now FIS’s Profile). As the 1980s progressed, other systems started to emerge. Out of Australia came Financial Network Services (FNS), with a system developed at State Building Society of New South Wales (today the system is known as TCS Bancs). The system moved into Asia Pacific and the Middle East. In Spain, a development towards the end of the decade at Caja Cantabria produced a mainframe-based system called Altamira, which started to be touted by Andersen Consulting. Today it is Alnova within Accenture. There were a few other local systems, plus a couple of packages that were sold for a while and then disappeared without trace. However, the market was not overflowing with solutions. During the 1970s and 1980s, most banks opted for the in-house route. While packages flourished on the more standard international banking side, there was less of a market in retail banking. The banks’ retail business was usually confined to their domestic markets, they had large IT resources, and there was a belief that one size did not fit all in this sector, with a competitive edge to be had from these core systems. The resultant solutions became embedded at the heart of the organisations, with a mass of interfaces. They stretched to millions of lines of code, much of it poorly documented and unstructured. The maintenance costs spiralled upwards and the task of extracting and replacing them became ever harder, so too sourcing of expertise. Lower down the scale, there was a requirement for systems to support ‘universal banking’, typically for smaller entities based in developing markets. Ireland-based Kindle successfully moved into this niche with its Bankmaster system, so too Citicorp subsidiary, Citil, with Microbanker. Over time, a number of pure corporate banking systems gained retail banking functionality as well. This was true of the GWB system from Unisys and Equation from Kapiti. Even a system such as Misys’ Midas, which is today viewed as an out-and-out corporate banking solution, gained retail banking modules.


Universal Banking Systems Market Report | www.ibsintelligence.com 5


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