slowed, so he estimated there might be 50 to 60 closures in the year. Not surprisingly, regulation and compliance were a focus, so too fraud and mobile. He expected Phoenix EFE to have ‘good single digit growth’. Much of the focus was on ‘point solutions’ around the core and this could be at least as influential as the core functionality itself when banks came to select a solution,


The arrival of D+H


In August 2013, Canadian financial technology firm, Davis and Henderson (D+H), acquired Harland for $1.2 billion. Notably, Shivdasani retired shortly afterwards. The rest of the management, personnel and organisational structure was to remain intact and the US-based D+H team (which was much smaller than the Harland team) was to be integrated, totalling around 1700 staff in the country, according to Bill Neville, president of D+H, US. Phoenix was said to be of particular interest for D+H, and it was ‘very impressed’ with the solution, he stated. ‘We decided that the US community bank and credit union space is a market that we could make a difference in and do well in, and this acquisition gives us a lot more scale.’ D+H began its market analysis in Q1 2013. At the time, Harland stood out as ‘the only independent company that hadn’t already been purchased by another strategic player’. Open Solutions, for instance, had been acquired by Fiserv earlier in the year. Neville described the acquisition as a ‘low risk, high opportunity proposition’ as it would not only improve D+H’s competitive position in the financial technology market, but it would also underpin its strategy to expand in the US. He referred to the acquisition as a ‘reversed merger’, as D+H was the acquirer but had ‘very little operations in the US compared to Harland’. The combined entity now served approximately 6200 institutions in North America (5400 of which were Harland customers). According to Neville, there were two product areas that


‘come quite close’ to overlapping, although not in the core banking space as Phoenix EFE constituted the Canadian company’s first core processing offering. D+H had a set of loan origination products which are sold to large banks in the US, he said, whilst Harland had Creditquest, which covered the same functionality. Over time, D+H would look to combine both suites so that the vendor has a product set that ‘supports the entire asset range for banks’. The other area was D+H’s Mortgagebot point-of-sale and loan origination system which was similar to the Laserpro automated loan compliance solution from Harland. There were no plans to combine these or discontinue either one, said Neville, as ‘each system is successful and strong in its marketplace’. D+H would market them for specific sectors, but this ‘will not be for some time’. The Phoenix system continues to sell reasonably well in


the US. There were seven new takers in 2013 here. It started implementing Phoenix at $200 million asset Scient Federal Credit Union to replace a six-year-old Ultradata system. A


considerably larger bank, Massachusetts-based Country Bank ($1.4 billion) also chose Phoenix. The other five takers were New Jersey Community Bank, Farmers State Bank of Calhan, Business Allied Financial Services, Brentwood Bank and Pacific Crest Savings Bank. It also seemed that the vendor had resumed an international marketing strategy for Phoenix. In December 2013, D+H/Harland inked a deal with an unnamed institution in South Africa, its only non-North American win of the year for the system, with this a niche government-owned entity and with the deal seemingly coming via Deloitte. Meanwhile, ITS’s Ethix, now touted as a new core system, away from its Phoenix roots, continued to make progress, although the vendor itself underwent a major upheaval and senior management changes in the second half of 2013.


2014 saw Ohio-based American Savings Bank sign. It


was previously running a system known as Insight, a white- labelled version of Fiserv’s DNA platform. Preparations for the project were carried out during 2014, with the switchover being planned for September 2015. There was also an Ultradata deal at Nebraska-based Four Points Credit Union, to replace its legacy Spectrum system from Fiserv (which had been in place for 15 years). The credit union also signed to implement the vendor’s internet and mobile banking applications, remote deposit capture, item processing services, mortgage origination solutions and a loan servicing system, and aimed to begin implementation of the new systems in October 2014. Speaking late in the year, Hansen said the acquisition of


Harland and integration with D+H had been a success. ‘We have received additional investment, we have refreshed our branding and have increased our marketing efforts. There has been no friction between the merging companies as they are complementary.’ In the last year, D+H had hired an extra 200 people, and had also gained more traction outside the US. The main area of geographical focus is the Caribbean, where D+H is a member of the Caribbean Association of Banks (CAB) and is actively promoting the Phoenix system. Hansen indicated a handful of CAB-related deals were in the pipeline, adding to the already established users such as Republic Bank in Trinidad & Tobago and Jamaica National Building Society. In total in the year, there were seven deals for Phoenix EFE and three for Ultradata, all in the US. The next major corporate news was the acquisition in


Universal Banking Systems Market Report | www.ibsintelligence.com 83


he felt. The shift towards outsourcing continued. Shivdasani estimated 80 per cent of bank selections in Harland’s pipeline were in favour of outsourcing, with this at around 40 per cent for credit unions. One driver was the burden of regulation, he felt, with online fraud another. ‘It is very hard for smaller banks to have the infrastructure to keep the bad guys out.


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