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Innovation in Financial Services

Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.

Misys and Temenos: who buys the story?

11 February 2012  |  5188 views  |  0

18 months ago, as I commented the 100 Software Vendors from American Bankers, Misys occupied the position #31 as technology provider to financial services and it receives 44% of its revenue from the financial industry. The company also boasts all the top 50 banks among its 1,300 customers. Misys has more core banking customers than any other non-U.S. core vendor, according to a recent Software Vendors Report, issued last week by Aite Group. In the U.S., it has some bank clients of its capital markets and Loan IQ lending software.

As part of the turnaround strategy led by Lawrie, Misys had recently developed a next-generation core platform called BankFusion. Heavily based on IBM Technology. An article published in January in Finextra, quoted Robin Crewe, CTO, Misys, explaining that

"With Misys BankFusion solutions now being available to customers with IBM's software fully integrated as standard, banks will be able to improve processes in-flight and scale rapidly with no negative impact to customer experience. The adoption of the IBM Information Framework brings even greater focus on processes within our development methodologies and a tighter consistency of specification, design and delivery of business solutions. Our customers will see more value for their investment and a functionally richer system that can be implemented more rapidly through collaboration with IBM."

Before counting in the takeovers from Viveo and Odyssey Financial Technology, Temenos appeared ranked #25 in the 2011 FinTech 100. Since several years, the Swiss based company says it has 1,500 customers in 125 countries. However the company has few U.S. clients to date, in recent years Temenos has won high-profile accounts such as Metro Bank in the U.K., a group of Mexican banks and North Shore Credit Union in Canada. The love stories with Tier-1 European Banks and Temenos has been rather rough. Although, the Odyssey acquisition has added visibility and more Front Office related business to the funnel.

Why then the stock markets and analysts are reacting so frown towards one of the biggest deal of the Financial Software Industry?

  • The general consensus is that US and Eurozone Banks are not really in shape to cope with mega Core System implementations (averaging 36 months from signing to go-live), meaning that T24 and BankFusion are not going to drive the sales in the following quarters.
  • I've read in a recent article in FT that Mysemenos (as I like to call the new company) will be able to save 100 Mio /year. However, restructuring and rationalizing had already show itself difficult to achieve as it was the case of Viveo in France. Consultants from Misys and Temenos are often very close to the Banks, and massive layoffs could also negatively impact the perception of the new company among their already nervous clients.

Sure is one thing: after the multi billion deal is completed, and as many of its famous clients, Mysemenos will enter the "Too Big to Fail" league.

TagsWholesale bankingWholesale banking

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