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Siddharth Udani

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Siddharth Udani - Consulting

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Banks choose technology or solutions?

28 April 2009  |  9723 views  |  1

It’s rather a very interesting debate whether banks choose the 'right' solution or a solution thats 'fits' their technology landscape. Though most of the Requirements are driven out of business change, how much of influence does business have on technology solutions? And whether do they actually care?

With banks getting global and larger, there have been various initiatives for a common technology landscape to reduce buy/maintain costs to build a scalable bank. Having fat support teams for IT, Procurement, etc for business, it becomes extremely difficult for banks whether to buy what solves the business problem or buy that fits their technology landscape. And products available in the market with good functional fit are usually not very technologically sound having evolved over a period of time.

So with interesting times, bank’s IT teams could look at the following in vendors who can:

-          Provide more of a flexible framework product  with canned business services

-          Highly portable, scalable and easy to integrate with satellite systems and with Middleware

-          Vendors global reach and support

-          Built-in strong MIS, Reporting and data feeding capabilities

-          Software Sharing/ white-labelling capabilities

-          Offshore customization/enhancement capabilities

 With these factors, sure that we would see many banks in-sourcing more business from other banks and white-labelling their intelligent systems even to their competitive banks. May be solutions addressing business requirements would take lead and technology would struggle to fit the targeted landscape or merge as an EAI initiative.


TagsPaymentsRetail banking

Comments: (2)

A Finextra member
A Finextra member | 04 May, 2009, 14:25


Interesting point to consider at this juncture. We have come a long way on certain aspects while many other holy grails of IT (especially on the software side) continue to be lofty, inspiring goals. Some trends that play a big part on this are:

-Interoperability across platforms has always had to militate against the proprietary lock-in strategies of vendors but mega-consolidation of platform vendors along with the XML-ization has tilted the scales in favour of co-existence of disparate platforms

-Increasing interest in tools and methodologies for application portfolio management, EA and focus on business processes and services has also helped

-Bargaining power, I believe, cyclically shifts between technology solution providers and bank technology decision makers. Banks can no longer be forced into committing to one technology stack, they demand value and one element of that value proposition is compatibility and flexibility

-On the other hand, I also think banks need to get savvier in negotiating with solution providers and the traditional pushdown based narrowly on pricing considerations of a single "project" can sometimes prove to be costlier and more painful in the long-term. This is especially evident in services outsourcing

-Part of the problem is the fuzziness in accurately quantifying the overall value. Sub-optimal decisions can be rated, if at all, at a much later point in time so it is a slow learning process.

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Siddharth Udani
Siddharth Udani - Consulting - London | 05 May, 2009, 13:48

Thanks RG.

Specifically on bargaining power/negotiation, there are few solutions which are obvious choice due to fitment but still struggle on getting a at-par deal.

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job title Client Partner
location London
member since 2008
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Is a financial services consultant, specialising in payments and revenue management.

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