Abstract
Overview
Introduction
Compliance pressures, the need for faster product time-to-market and organizational agility are driving the need for banks to re-vamp the back office. The challenge is for banks to tackle the scale of these projects and implement future-proof solutions with the minimum of disruption to everyday operations.
Scope
- Covers retail banks in Western Europe and North America
- Examines the market, strategic and technology drivers impacting retail banks core systems technology investments
- Forecasts European and North American retail banking core system IT spend until 2010
Report Highlights
The wider macroeconomic environment is placing increasing pressure on banks. Rising interest rates, inflation and stock market shocks are all contributing to a more complex market for financial institutions. Banks that have efficient, flexible back office operations will triumph in the long term.
Over recent years banks have become increasingly acquisitive in order to sustain growth, driving both consolidation in domestic markets as well as cross-border activity, particularly in high-growth markets. As a result, many banks have begun to address the core systems implications of their M&A activities.
Many vendor solutions are now sophisticated and flexible enough to meet the complex requirements of even top-tier banks straight out of the box. As a result, who builds, hosts, develops and maintains core systems is becoming more of a sourcing issue rather than of strategic competitive advantage.
Reasons to Purchase
- Gain visibility into the dynamics of the retail banking core systems market
- Gain market insight to assist in your strategic planning and go-to-market strategy
Table of Contents
- Overview
- Catalyst
- Summary
- Methodology
- Executive Summary
- Introduction
- Industry pressures & drivers around core systems (Market Focus)
- Core systems strategies in retail banking (Strategy Focus)
- Technology strategies & best practice in core transformation (Technology Focus)
- Core banking strategies in retail banking (Databook)
- Table of Contents
- Table of figures
- Table of tables
- Industry pressures & drivers around core systems (Market Focus)
- Summary
- A challenging macroeconomic environment is putting pressure on margins
- Margin pressure is being driven up as markets mature
- Interest rate rises are having a mixed impact
- The US sub-prime crisis will have a lasting impact
- Industry consolidation and competitive pressures require business agility
- New entrants are highlighting the shortcomings of legacy systems of incumbent banks
- A core systems strategy is key for banks with acquisitive appetites
- Flexibility is a key success factor in an increasingly demanding market
- Product time to market is increasingly important as competition grows
- Customer relationship management can be an important differentiator in an commoditizing market
- Regulations are acting as a catalyst for core systems investment
- Banks are struggling to meet the increasing regulatory burden with legacy core systems
- Regulatory compliance can bring business benefits
- SEPA is set to drive pan-European banking
- Core systems strategies in retail banking (Strategy Focus)
- Summary
- A customer-centric approach will be a strategic priority for retail
banks going forward
- Customer service underpins customer retention and cross-sales
- Product origination should be consistent across channels
- Flexibility will be key for banks seeking to move to a future proof
platform
- Product development and time to market to support a customer-centric focus
- Scalability and breadth to support future growth opportunities
- Acquisitive banks should develop a framework for incorporating new institutions
- Expanding into new geographies offers the opportunity to leverage synergies across borders
- Core systems investments should support future regulatory developments
- Cost control and operational efficiency will be the foundations of core
renewal investments
- Total cost of ownership remains a key issue on the IT side
- Improving operational efficiency will improve organizational flexibility
- Banks will start to consider alternative sourcing strategies to further improve flexibility
- Information management and internal controls need to be built into core
systems platforms
- Information management is essential to support and improve both the back and front office operations
- Audit and control should be addressed from an enterprise-wide perspective, and rooted in the core system
- Technology strategies & best practice in core transformation
(Technology Focus)
- Summary
- Centralization is the key to an efficient, customer-centric bank
- Centralization helps banks take steps towards improving customer-centricity and operational efficiency
- Moving to a centralized architecture also benefits organizational audit and controls
- For banks with a pan-regional presence, moving to a centralized, common platform is an option
- A flexible, real-time architecture will enable banks to address their
business challenges
- Moving to real-time operations will increasingly be a strategic imperative
- Standardization will facilitate a componentized approach
- Service oriented architecture and process rationalization will enable process excellence
- A parameterized approach to product origination offers greater flexibility
- Sourcing options are wide as banks move away from developing in-house
- Banks have a wider range of core systems renewal options than ever before
- Re-architecting enables banks to bring their proven systems responsive to the modern-day environment
- Replacement is becoming more acceptable as an option
- Core banking strategies in retail banking (Databook)
- Introduction
- European retail banking core systems IT spend by country, 2006 - 2010
- European retail banking core systems IT spend by source, 2006 - 2010
- Benelux retail banking core systems IT spend by source, 2006 - 2010
- French retail banking core systems IT spend by source, 2006 - 2010
- German retail banking core systems IT spend by source, 2006 - 2010
- Italian retail banking core systems IT spend by source, 2006 - 2010
- Nordic retail banking core systems IT spend by source, 2006 - 2010
- Other Western European retail banking core systems IT spend by source, 2006 - 2010
- Spanish retail banking core systems IT spend by source, 2006 - 2010
- Swiss retail banking core systems IT spend by source, 2006 - 2010
- UK retail banking core systems IT spend by source, 2006 - 2010
- North American retail banking core systems IT spend by country, 2006 - 2010
- North American retail banking core systems IT spend by source, 2006 - 2010
- US retail banking core systems IT spend by source, 2006 - 2010
- Canadian retail banking core systems IT spend by source, 2006 - 2010
- APPENDIX
- Definitions
- Core system
- Internal spending
- External spending
- Hardware
- Outsourcing
- Infrastructure software
- Application software
- Professional services
- Systems integration
- Further reading
- Ask the analyst
- Datamonitor consulting
- Disclaimer
- List of Tables
- Table 1: European retail banking core systems IT spend by country, 2006 - 2010
- Table 2: European retail banking core systems IT spend by source, 2006 - 2010
- Table 3: Benelux retail banking core systems IT spend by source, 2006 - 2010
- Table 4: French retail banking core systems IT spend by source, 2006 - 2010
- Table 5: German retail banking core systems IT spend by source, 2006 - 2010
- Table 6: Italian retail banking core systems IT spend by source, 2006 - 2010
- Table 7: Nordic retail banking core systems IT spend by source, 2006 - 2010
- Table 8: Other Western European retail banking core systems IT spend by source, 2006 - 2010
- Table 9: Spanish retail banking core systems IT spend by source, 2006 - 2010
- Table 10: Swiss retail banking core systems IT spend by source, 2006 - 2010
- Table 11: UK retail banking core systems IT spend by source, 2006 - 2010
- Table 12: North American retail banking core systems IT spend by country, 2006 - 2010
- Table 13: North American retail banking core systems IT spend by source, 2006 - 2010
- Table 14: US retail banking core systems IT spend by source, 2006 - 2010
- Table 15: Canadian retail banking core systems IT spend by source, 2006 - 2010
- List of Figures
- Figure 1: European banks technology priorities
- Figure 2: European banks business priorities
- Figure 3: European banks' priorities for enhancing business growth through technology
- Figure 4: Approach to core systems strategy over next years in Europe
- Figure 5: European retail banking core systems IT spend by country, 2006 - 2010
- Figure 6: European retail banking core systems IT spend by source, 2006 - 2010
- Figure 7: Benelux retail banking core systems IT spend by source, 2006 - 2010
- Figure 8: French retail banking core systems IT spend by source, 2006 - 2010
- Figure 9: German retail banking core systems IT spend by source, 2006 - 2010
- Figure 10: Italian retail banking core systems IT spend by source, 2006 - 2010
- Figure 11: Nordic retail banking core systems IT spend by source, 2006 - 2010
- Figure 12: Other Western European retail banking core systems IT spend by source, 2006 - 2010
- Figure 13: Spanish retail banking core systems IT spend by source, 2006 - 2010
- Figure 14: Swiss retail banking core systems IT spend by source, 2006 - 2010
- Figure 15: UK retail banking core systems IT spend by source, 2006 - 2010
- Figure 16: North American retail banking core systems IT spend by country, 2006 - 2010
- Figure 17: North American retail banking core systems IT spend by source, 2006 - 2010
- Figure 18: US retail banking core systems IT spend by source, 2006 - 2010
- Figure 19: Canadian retail banking core systems IT spend by source, 2006 - 2010
- Definitions
