China's biggest financial information technology (IT) service provider, Digital China Financial Software Ltd. (DCFS), and Misys (FTSE: MSY.L), the global application software and services company, today signed a strategic cooperation agreement to deliver a new, hosted, banking solution targeted at the estimated 30,000 small and medium-sized banks in China.
The new solution will be based on DCFS' ModelB@nk integrated structure and the Misys Equation core banking system, with trade services, international settlement and treasury management functionality integrated within it. The new solution, available as an Application Service Provider (ASP), will provide a lower cost solution for banking customers while helping to improve efficiencies across China's financial industry.
As China is opening its financial markets, small and medium-sized Chinese and foreign banks, need IT solutions that deliver innovative services and enable them to get ahead of their competitors. These banks are often limited by budget and size and the new ASP solution will enable them to overcome the significant cost and resource issues associated with IT development.
DCFS and Misys will provide a solution which delivers the value that small and medium sized banks need at a cost they can afford. Using the DCFS' ModelB@nk integrated solution as the basic framework and integrating it with Misys Equation, Misys Trade Innovation and Misys Opics, provides a best of breed, advanced core banking platform which will be hosted—an entirely new application outsourcing service for banks. The rapidly developing Chinese banking industry provides the IT outsourcing market with a great opportunity for growth. This solution will help banks quickly adopt advanced technology and stay ahead of the competition.
In the next few years, the Chinese banking industry will benefit from a new wave of globalization in IT applications. An ASP service will serve as an important mechanism for quickly benefiting from new and emerging technologies. The banking IT solutions market in China could reach RMB14.751 billion by 2011 (£1billion) with annual growth of 19.6% from 2007 to 2011.
Core Banking will remain the biggest sub-market in the Chinese banking application solutions market, which is expected to reach 16.3% by 2011 and will top RMB2.4 billion (£163m). DCFS and MisMisys believe that there are significant opportunities in the financial ASP service in China.
"Although ASP service is still a new model to be understood by small and medium-sized banks in China, a large number of them need application IT technology to improve their capacity and compete in the market," said Dong Qiqi, President of DCFS. "So we believe that ASP services have a broad and promising potential in China's banking industry. DCFS believes that the cooperation with Misys will further realize our financial outsourcing service strategy. The cooperation will best integrate Misys' international experiences and products with DCFS' local services to jointly provide safe and reliable outsourcing services for core banking systems, lower IT costs and ensure banks operate efficiently."
Misys plc Chief Executive, Mike Lawrie, commented: "The growth and development of China's financial markets is tremendous. There are more than 30,000 small and medium sized banks in China, all of whom are looking for ways to drive efficiency and productivity whilst at the same time reducing costs. Using our proven technology and working with DCFS, who have a specialist team of experts that know the local market is a winning combination that will deliver long term value for new and existing customers in this important, fast growing market."