Core Banking Systems for Large Banks: North American Version, 2016

by James O'Neill,  Stephen Greer, December 22, 2016
Product Trends/ Reviews
North America

Abstract

Celent has released a new report titled Core Banking Systems for Large Banks: North American Version, 2016. The report was written by James O’Neill and Stephen Greer, both with Celent’s Banking practice.

The core banking system (CBS) platform is the primary system of record for the accounts of a bank, and thus forms the technological foundation on which the entire bank operates. The process of switching out a core system has been likened to changing the engine on an aircraft in flight. These transformations can be costly and risky. It’s important that institutions choose the right vendor.

The resistance to change has resulted in a situation where many banks are running systems that are decades old. In the last 10 years, the rise of digital and the evolution of delivery channels have added stress to these platforms. As customer needs continue to evolve, many financial institutions are finding their core systems are ill-equipped to meet today’s requirements. 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. The decision to go with one system over another will depend largely on the needs of the institution. Nowhere are the hard economics of CBS transformation more relevant than in the large bank market, where the cost of licensing and maintaining a CBS platform pales in comparison with the investment in customized functionality, workflows, and interfaces made by the large banks to ensure that the CBS platform continues to work within their existing IT ecosystems.

“The fundamental challenge of keeping older CBS platforms up to date is a primary reason why back office functionality relating to new services like mobile banking have been implemented in these external back office systems rather than in the CBS platform itself,” commented O’Neill, a Senior Banking Analyst.

“Banks are undoubtedly finding their CBS platforms represent an impediment to agility in creating new banking services, but through the technological adaptation of middleware and other system workarounds, banks have generally been able to stave off full-blown core replacement,” added Greer, a Banking Analyst. 


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 operating unit 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

5

 

System Deployment Options

6

 

Technology Trends

7

The Providers

9

 

Celeriti/FinTech

9

 

FIS

10

Methodology

12

 

Advanced Technology Criteria

14

 

Breadth of Functionality Criteria

16

 

Client Base Criteria

17

 

Depth of Client Services Criteria

19

CBS Platform Evaluation

20

 

Advanced Technology

20

 

Breadth of Functionality

23

 

Client Base

25

 

Depth of Client Services

27

Solution Profiles

30

 

Celeriti by CeleritFinTech

30

 

Profile by FIS

33

 

Systematics by FIS

36

Celent’s XCelent Awards

38

How Banks Can Use This Report

40

Appendix 1: Technical Details

41

 

A. Celeriti by CeleritFinTech

41

 

B. Profile by FIS

48

 

C. Systematics by FIS

57

Leveraging Celent’s Expertise

67

 

Support for Financial Institutions

67

 

Support for Vendors

67

Related Celent Research

68

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