Phoenix Finastra (D+H)


The story of the Harland-derived Phoenix system beyond the US was for a long while largely centred on International Turnkey Systems (ITS) in the Middle East, South-East Asia and North Africa, with a Shari’ah banking slant, and to a lesser extent another partner, Australia-based Data Action. There has also been some activity in South Africa, via Deloitte, with a win here in late 2013. Harland itself was focused more or less solely on the US, although it made some direct sales in the Caribbean. The history of the Phoenix system is rather complex but, essentially, it came out of the lower end of the US market in the early 1990s. It shone brightly for a while as a new and flexible addition to the market and gained a number of partners and deals, but was hit by some problem sites and then changes of ownership. It eventually landed back in the US, within Harland Financial Solutions, which included involvement from some of the original


system developers. It has an extensive US user list and Harland continued to evolve the system, which provided a degree of stability after several years of uncertainty. The evolution led to Phoenix EFE (known as Phoenix International outside the US), a reworked version for Microsoft .Net with functional and technology extensions. Its latest branding is Phoenix System International (introduced following the acquisition of Harland by Canadian software vendor, D+H, in 2013). In parallel, ITS launched an Islamic banking platform, Ethix, which appeared to be an amalgamation and further development of Phoenix, the Tradewind trade finance system and Getronics branch system. In March 2017, Vista Equity Partners, owner of Misys, announced the acquisition of D+H, in a deal estimated to be worth around $3.6bn. In June 2017, the two firms were merged to form Finastra, touted to be one of the largest banking technology companies in the world with more than 10,000 employees, 9000 customers across 130 countries.


Origins


The Phoenix banking system originated within a group of small US banks. It was launched as a commercial offering in the early 1990s, and was owned, in its formative years, by the original developer, Phoenix International, (until this was acquired in late 2000 by London Bridge Software). Via a few steps, the system now resides back in the US, at D+H. There are a relatively large number of users, including a fair few overseas but the progress has not been particularly smooth. Within D+H, it resides alongside a host of other systems, with sales in the US typically concentrating on the community bank space (where it has more than 100 users).


Phoenix International was established in 1993 by Bahram


Yusefzadeh. He had previously set up a company called Nu- Comp back in 1969. Here, he had headed the development of a retail banking system called Liberty. At its height, the system was installed in around 260 sites. Nu-Comp was acquired in June 1986 by Broadway & Seymour. Yusefzadeh became chairman of Broadway & Seymour until November 1986, when he moved to Kirchman. He worked here for six years with its AS/400-based retail banking offering. Yusefzadeh claimed that he championed a client-server rewrite of the Kirchman system but that this was rejected. As a result, he left to do it himself, setting up Phoenix International. A number of the company’s early recruits were from


Yusefzadeh’s Nu-Comp and Kirchman days. Ralph Reichard joined in late 1994 as chief operating officer. He came from Newtrend but was previously president of R&D at Kirchman and, prior to this, regional manager at Broadway & Seymour. The senior vice president for marketing and sales was an ex-Nu- Comp and Kirchman employee, and the head of client services


was an ex-Kirchman and Broadway & Seymour employee. One other notable recruit was Raju Shivdasani, who came on board as senior vice president for international sales. He had been president of Fiserv’s CBS business from 1990 to 1996. A later addition was Brian Morgan as international sales manager, an ex-Winter Partners employee. Yusefzadeh recruited a consortium of 26 regional US banks. These took a 40 per cent stake in the new company, which provided Phoenix with over $1 million of capital, plus input during the design of the system. The target platform was Unix and additional funding was gained from Hewlett- Packard. HP provided ‘seed money’, technical help, and free computers. It was one of a number of investments made by HP at around this time, as it sought to bring banking applications onto its HP-UX version of Unix. As a result of the tie-up, Phoenix was contractually tied to selling the system solely on the HP platform in the US and Canada for the first few years. The two companies were targeting the ageing domestic systems, including that of Kirchman and those of the mainframe brigade. They also intended to sell outside of the US. The two pilots were Old Sage Farmers Bank and First National Bank of Homestead. The former was a subsidiary of one of the consortium members, Iowa-based First Citizens Financial. The second was not from within the consortium. Work started on the development in 1993, with the pilots going live in the second half of the following year. Phoenix claimed that all of the consortium members were committed to taking the system. First Citizens’ chairman, O J Tomson, became Phoenix’s first chairman. Tomson and Yusefzadeh first met 20 years earlier, when the latter was still at Nu-Comp. Four


Universal Banking Systems Market Report | www.ibsintelligence.com 69


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