Core Banking Systems for Community Banks: North American Version, 2015

by James O'Neill,  Stephen Greer, December 22, 2015
Product Trends/ Reviews
North America

Abstract

The core banking platform is the central system of record for the accounts of a bank, and is arguably the most important technology component of any institution. Because of this, the decision to change it can be difficult. The process of switching out a core system has been likened to changing the engine on an aircraft in mid-flight. It’s important that institutions choose the right vendor.

The evolution of the market, combined with the relative age of these systems, has led many to suggest that mass migration is on its way. Banks are undoubtedly finding their core systems an impediment to efficiency, but through other technological adaptations they are able to stave off full-blown core transformation. Still, many institutions are reaching the point where the logical decision is to bite the bullet and change cores.

In the report Core Banking Systems for Community Banks: North American Version 2015, Celent surveys 10 market-leading core banking systems offered by the “Big 5” financial technology services companies operating in North America. This report, the first of three on North American banks, is focused on solutions sold to community banks (defined as retail-oriented banks with total assets of $1 billion and below). Parts Two and Three will focus on solutions sold generally to mid-tier banks ($1 billion to $20 billion in assets) and large banks ($20 billion plus in assets), respectively.

“Contrary to what many may think, there’s no ‘best’ core banking system. Each platform has strengths and weaknesses, but all of them generally play to specific markets or segments,” says Jim O'Neill, Senior Analyst with Celent’s Banking Group and author of the report. “The decision to go with one system over another will depend largely on the needs of the institution.”

“In the last 10 years, the rise of digital and the evolution of delivery channels have added stress to these platforms,” says Stephen Greer, Analyst with Celent’s Banking Group and coauthor of the report. “Needs have evolved, and some financial institutions are finding their core systems ill-equipped to meet today’s requirements.”

This 140-page report contains 9 figures and 184 tables.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

Overview

2

 

Definition of a CBS

2

 

Market Consolidation

3

 

CBS Retirement

5

 

Importance of Cross-Sell

6

 

System Deployment Options

7

 

Technology Trends

8

The Providers

9

 

CSI

9

 

D+H

10

 

FIS

10

 

Fiserv

11

 

Jack Henry & Associates

13

Methodology

14

 

Advanced Technology Criteria

16

 

Breadth of Functionality Criteria

18

 

Client Base Criteria

19

 

Depth of Client Services Criteria

22

CBS Platform Evaluation

23

 

Advanced Technology

23

 

Breadth of Functionality

25

 

Client Base

27

 

Depth of Client Services

28

Solution Profiles

32

 

BancPac by FIS

32

 

CIF 20/20 by JHA

34

 

Cleartouch by Fiserv

36

 

Core Director by JHA

38

 

DNA by Fiserv

40

 

HORIZON by FIS

42

 

NuPoint by CSI

44

 

PhoenixEFE by D+H

46

 

Precision by Fiserv

48

 

Premier by Fiserv

50

Celent’s XCelent Awards

52

How Banks Can Use This Report

54

Appendix 1: Survey Results

55

 

A. BancPac by FIS

55

 

B. CIF 20/20 by JHA

64

 

C. Cleartouch by Fiserv

71

 

D. Core Director by JHA

78

 

E. DNA by Fiserv

85

 

F. HORIZON by FIS

93

 

G. NuPoint by CSI

104

 

H. PhoenixEFE by D+H

111

 

I. Precision by Fiserv

121

 

J. Premier by Fiserv

128

Leveraging Celent’s Expertise

135

 

Support for Financial Institutions

135

 

Support for Vendors

135

Related Celent Research

136

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