Research consultancy Celent
says the core banking market – which provides a range of IT
solutions – is turning ‘interesting’ as top-tier banks shake off
budget restraints, vendors upgrade products and services, and
smaller banks in developing regions attempt to meet increasing
customer demands.
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The core banking market is forecast to
grow by 14.3% to $4bn by the end of 2011, from an estimate of about
$3.5bn for fiscal 2009, according to research consultancy
Celent.
The firm said the core banking market, which
provides a range of IT solutions, is “turning out to be
interesting” as top-tier banks return to the market and vendors
upgrade products and services.
Based on estimations on how much the top 500
banks, or those with assets greater than $20bn, have spent on IT
implementation, Celent said despite the heavy budget constraints as
a result of the recession, high-value deals are coming out of
2010.
Drawing on the big players in the market
including FIS, Fiserv, Misys and Temenos, the report said new name
deals continue to make up the bulk of the core banking market, in
contrast to the renewal of existing deals. But it is expected this
will change as the focus moves to small banks in developing
regions.
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By GlobalDataHowever, in the same note, the report said
that, not surprisingly, Latin America and Asia-Pacific are more
active than the developed countries in North America and Western
Europe, where most banks already have core banking systems.
Drawing on some of the biggest deals of 2010,
Celent said North America had seen some of the large deals with
Citigroup switching to FIS platforms in an effort to overhaul its
core processing systems.
Consolidation of core banking vendors during
2009 was also flagged up. The report said there had been a
“changing complexion” of the market, with Temenos strengthening its
position in Europe with the acquisition of Viveo, the largest
French core banking solutions provider; and FIS’s acquisition of
Metavante consolidating the vendor’s position in the North American
market.
Although banks have remained cautious in their
IT spending, the report said investment has begun to pick up again.
This comes as core banking vendors move into untrod regions to
boost growth.
