Traditional legacy systems running lending applications are notoriously costly to maintain and staff, often disproportionate to the underlying cost of writing new loans and servicing customer accounts. The FIS Lending Utility will allow banks to significantly reduce internal costs of operation whilst also providing a much more manageable and controlled cost environment for the future. This is especially relevant in today's economic climate in which banks are facing tighter margins in the lending sector.

The validity of this business proposition is underlined by independent research commissioned by FIS. The survey of banking professionals found that nine out of 10 respondents think that legacy systems are costing more and more to maintain, yet 76 percent believe these legacy systems will still be in use five years from now. The vast majority, 88 percent, also cited dealing with compliance issues as a major strain on resources. Other research findings revealed access to better technology is seen by two out of three research respondents as a top benefit and more than half think there will be a significant opportunity to use an ASP model in core banking in the next three years; 25 percent even see it fitting in over the next 12 months.

A major benefit of the new service - which is already being implemented by one of the largest UK retail banks - is that FIS administers system compliance with all current and future legal and regulatory requirements, including the latest revisions to the Consumer Credit Act (CCA) - vital in the current climate where failure to comply costs millions.

The FIS Lending Utility reduces the complexity of a bank's previous legacy systems by providing a hosted, secure system that dramatically reduces the risk of failure. The implementation service includes all the integration required to connect to a bank's other systems such as collections, branch and internet applications.

Alternatively, the service can be extended to include a complete end-to-end solution. For most banks and specialist financial institutions, FIS anticipates its Lending Utility will replace multiple legacy applications with a single software service.

"The FIS Lending Utility is the first totally hosted service capable of supporting even the largest European banks and financial institutions," said Mark Davey, managing director for FIS' Europe, Middle East and Africa (EMEA) division. "There is little competitive edge to be gained for a bank these days from the operation and management of core systems and by taking away worries about legacy infrastructure, compliance and skills shortages, we can allow our customers to focus on their strengths whilst stripping out short- and long-term operating costs."

By owning and hosting the lending system, FIS will be managing millions of records for banks, whilst maintaining and supporting the IT infrastructure needed to run the back office. The new service is highly scaleable, providing banks with the ability to handle and process massive transaction volumes. The service is delivered securely over an Internet connection.