Boston, April 16, 2013 – Aite Group today forecasts that nearly 330 U.S. financial institutions will replace their core banking systems this year and that many will adopt hosted solutions.
A new Impact Note offers perspective on the growing preference for hosted solutions, which Aite Group analysts have observed across many financial services technologies. The trend is a new one in core banking technology, which has been dominated by licensed solutions because of the importance of these solutions and the critical nature of the customer data they process.
Aite Group predicts that 90% of U.S. banks deploying a new core system this year will select a hosted environment and that 60% of credit unions will do so. Technology vendors also see a preference for hosted solutions among financial institutions. Vendors told Aite Group that several of their existing customers would like to remain customers of their core solutions but are looking to migrate their existing solutions from a licensed to a hosted environment.
“Our research shows that there is a changing preference toward hosted solutions, even among financial institutions satisfied with their existing solutions and technology partners,” says Christine Barry, research director for wholesale banking at Aite Group and co-author of this report. “Some vendors have even created a migration path and pricing programs that enable core customers to begin with a licensed deployment and then move to a hosted environment,” adds David Albertazzi, senior analyst with Aite Group and co-author of this report.
This 15-page Impact Note contains five figures and one table. Clients of Aite Group's Wholesale Banking or Retail Banking service can download the report.