Core technology conversions to remain on the downlow - Aite
05 February 2015 | 5567 views | 1
Core bank technology vendors anticipating a slew of orders from America's largest banks in 2015 are likely to be disappointed as the sector adopts a patch and mend strategy rather than risk a full-blown conversion.
Figures from a survey of over 90 global banks with assets in excess of $10 billion show few signs of a rush to replace ageing core systems.
The results indicate that core technology replacement in North America will continue to be dominated by community banks and a growing number of credit unions, but the market will see slightly more activity from midsize and large banks than it has in recent years.
The Asia-Pacific region shows the greatest likelihood of replacing its core systems over the next few years, says Aite.
While there will be some movement in the US market, it is unlikely to provide the windfall in spending that core technology vendors have long-anticipated.
Those firms with the greatest chance of success will be the ones offering platforms with proven scalability, the ability to easily perform high levels of customisation, financial viability, a real-time and modern infrastructure, and a global footprint and knowledge base for multicountry rollouts.
Without providing precise figures, Aite nonetheless views the results positively.
“As banks' highest priorities for the next few years are focused primarily on investments in customer-facing channels and analytics, some cannot ignore the aging of their core solutions,” says Christine Barry, research director for Wholesale Banking & Payments at Aite Group. “Investments in new core solutions will be critical to effectively implementing the right strategies and getting their greatest speed and return from front-end investments.”