Midsize banks are increasingly seeking a core system that utilizes data analytics to provide a more complete view of the customer which then allows for better customer-bank communication, according to a new report from Boston-based analyst firm Celent.
The report, titled "Core Banking Solutions for Midsize Banks: A Global Perspective," examines the core solutions used by a select number of banks with between $1 billion and $20 billion in assets.
In addition to increased analytics capabilities, Celent found that mid-tier banks are also seeking a multichannel integrated core banking solution. "Multichannel options like ATM, mobile, Internet, and IVR are crucial in attracting and serving customers," the report reads. "Core banking solutions are also expected to facilitate product development and provide flexible customization capabilities."
The report also noted that there is a "major preference" for in-house implementation. Especially in developing countries, banks prefer in-house implementations to hosted implementations. In many cases, there is no hosted option in a given country, Celent noted.
Celent also noticed a decrease in demand for core banking replacements in the current economic climate. Banks switching core banking solutions are relatively higher in South Asia, Middle East Asia, and Africa, however. Although the trend for hosted solutions is low, Celent found a slow popularity gain among smaller banks and some larger banks looking to leverage hosted