A first-time event occurred in the bank tech space during 2009. Whereas in previous years the list of popular solutions sold by major vendors included ten solutions, in 2009 the list shot up to 34. These 34 are a unique mix of applications. I'd like to have a chat with the pundits who have been using the word "commodities" to describe the offerings of core/ancillary system vendors.Why are the most-popular bank software programs becoming more diverse? I can offer you the causes and effects as I see them.
• Core applications sales are no longer the bread and butter revenue spike that they were up until five years ago.
• Bank tech vendors have been highly reliant on their former double digit revenue gains, so they had to ramp up revenue with other tech stuff to sell.
• There are 132 pieces in the bank technology pie, 17 of which are core. That leaves 115 ancillaries that have been sitting on the shelves of the better core vendors, gathering dust.
• Bank CIOs demonstrated great compassion during the banking crunch, and thus were reluctant to present new funding requests to bank management at a time when capital requirements were being challenged. Notwithstanding the realities of economic conditions, aggressive tech sales people showed bank CIOs the way to "more than core.
• Ancillaries are now the hot apps of the times.
• Bankers are grateful for initiative selling on the part of vendors who previously waited for their phones to ring much like Pavlov's dog who sought food only after the bell rang.
To satisfy the inquisitive minds of readers of last week's blog who might ask, "If ancillaries were selling strongly in 2009 why did the top core vendors combined achieve a negative revenue total in 2009 of -6.7%?" There isn't a single ancillary or even three dozen ancillaries that can equate to the revenue value of one core apps sale. So lots of ancillary sales partially filled the core void, but couldn't make the cup runneth over.
I offer this gentle nudge to complacent bank CIOs: Be good to your vendors' sales people. They'll wake you up to new opportunities, take some of your money, and deliver a 30% or more ROI. They win, you win. In fact, CIOs may return as the heroes of the Executive Suite - post recovery. And bank employees will delight in the use of at least a few of the 115 ancillaries that will push them into new frontiers of "yes you can."
Following are the 34 hot apps, in random order:
Retail online banking Business online banking Mobile banking Bill pay Branch automation Credit risk management Compliant document management Merchant capture Core applications software and processing Item processing Financial accounting ancillaries Card production Government payments Healthcare payments solutions Loyalty (rewards) programs Merchant processing Prepaid solutions Branch capture Business continuity/Disaster recovery Business intelligence Integration middleware ATM driver solutions Electronic statements ATM/Debit fraud prevention ATM/Debit switch services Anti money laundering Debit & credit card processing Loan origination (auto, consumer, business, mortgage) Check clearing Content management Call center BPO Cash & logistic solutions ACH software Debit payments network