Boston, MA, December 13, 2007 – A new report from Aite Group, LLC examines the key drivers of high performance in the core processing vendor space, and the impact of tightly integrated sales strategies and product offerings. It compares vendor performance against the strategies, strengths and recent acquisition decisions of six of the leading U.S. core banking providers to determine the key attributes of the best performers. Ultimately, the report shows that while integration is important, it is not the end-all be-all to success in this market.
The report, which assesses information collected from a variety of sources, including the vendors examined, their 10Ks and other financial reports, investor presentations, and press releases, argues that an integrated portfolio and sales strategy is only one of several attributes that vendors may possess. With growth of the core system replacement market slowing, vendors have had to adopt new strategies, which rely less on core system sales, and more on cross-selling a broad range of products. Such a strategy has led to increased merger and acquisition activity over the past few years and, subsequently, new issues involving integration. However, too much focus on integration can come at the expense of new product development, reaching a large enough target market, and the ability to address the needs of existing customers.
"New market demands and conditions are placing new pressures on these vendors to alter their strategies and move beyond their comfort zone," says Christine Barry, research director with Aite Group and author of this report. "The most successful vendors will be those which not only offer broad product portfolios, but are also able to penetrate emerging/high-growth product areas, generate a high percentage of transaction-driven revenue, and demonstrate the necessary scalability to serve both the more active small bank and credit union markets, and the larger institutions with bigger budgets."
This 26-page Impact Note contains 20 Figures and 4 Tables. It examines the attributes, strategies and performance of six vendors: Fidelity National Information Services, Fiserv, Harland Financial Solutions, Jack Henry, Metavante, and Open Solutions.
Clients of Aite Group's Retail and Wholesale Banking services can download the report.