Metavante (Milwaukee) processes over 17 million deposit accounts at its data center, using an IBM MVS mainframe in a Sun OpenServer environment. But about half of the financial institutions in the U.S. marketplace seek in-house core banking solutions, according to Frank R. Martire, CEO of Metavante.
That's why Metavante recently purchased Kirchman Corporation (Orlando, Fla.), whose core banking systems are used by over 1,000 financial institutions in the U.S., the Czech Republic and the Philipines. Kirchman will operate as an independent unit of Metavante, with continued leadership from Rachel Landrum. Financial terms were not disclosed.
By adding Kirchman Bankway, Kirchman's in-house core banking product, to Metavante's outsourced offerings in core banking, EBPP, card processing and card personalization, the combined organization will have the ability to address both sides of the core banking market. Kirchman Bankway runs on several IBM and Sun platforms.
Usually, the preference for in-house core processing comes up early in discussions with new and potential clients. "Institutions who want to be in-house like to have control of their environment," says Paul A. Danola, executive vice president and group executive, Metavante Financial Services Group.
Increased control over system parameters can lead to faster turnaround for customization and better adaptation to unique processing needs. "Effectively, they can design on the dime," says Danola. "If they want to create another product, they can do that right there in their own in-house environment, exactly when they want to do it."
But even so, other facets of a bank's technology footprint may be better suited for an outsourced solution. "If they want to be in-house for the core, they realize in some of the other areas, it's way too expensive to start their own EBPP operation or card processing operation," says Martire. "So they say, 'OK, we just need to integrate those product lines with our core processing.' That's the capability we talk about with our cross-sell."
Also, Metavante will offer Kirchman's regulatory compliance service to its current customers. The key element for the cross-selling initiative will be integration between the various components. "Integration of product lines is very important to banks," says Martire. "It's a major differentiator in the marketplace."