Jan 2005: Stage set for Global Core Banking Competition

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In late 2004, when Misys announced its MidasPlus product, an enhancement of its 20-year old Midas core banking product, the company’s CEO for wholesale banking, Andrew White, claimed to have achieved an edge in the area of “global processing” vis-à-vis its competition – a claim that has been challenged by other core banking stalwarts such as i-flex and Temenos.

“Global processing” – the standardization of processes in a single, central, integrated worldwide system, eliminates duplication of efforts and yet facilitates flexibility in back-office operations. It is today an often-spouted catchphrase among core banking solution providers, hoping to take advantage of the lucrative returns of even a single deal with any international bank.
i-flex responded to Misys’ claim by pointing at its installed base at various international banks like Citibank, Lloyds TSB, Rabobank, UBS and Shinsei Bank. Temenos for its part said it had “years of experience in providing its clients with this competitive advantage” via its TEMENOS GLOBUS and with “the non-stop processing capabilities of TEMENOS 24, our clients can harness the real power of global business.”

Misys plans to upgrade its entire installed base of Midas customers to MidasPlus. Andrew White says: “At some point in the future there will be a point where Midas no longer exists and everything is MidasPlus. MidasPlus is everything about consolidation at the back office, with keeping your front office in separate branches.”

According to Misys, MidasPlus, will allow a bank to consolidate its operations and provide a single view of its global business, across transaction processing, treasury, capital markets, commercial lending, trade finance, payments and retail services.

White compares the previous Midas installation to a hub and spoke situation, where the Midas installations were at the spokes, but “the hub was the country’s home territory and Midas seldom went in there.” The obstacle that Misys encountered was essentially one of consolidation, given different local banking laws and regulations. The MidasPlus product is intended to address this and move into “the centre of large banking operations”.

All three products – Misys’ MidasPlus, Temenos’ T24 and i-flex’s FLEXCUBE tout J2EE support, a Java-based platform used for deploying and managing applications on an enterprise-wide scale – an inevitable criteria of products, the result of banks themselves moving towards J2EE.

Point to Ponder:

1. Where is INFOSYS's Finnacle placed against such biggies ??

2. Three Tiered Service companies like HP,IBM, EDS, Accenture are tier 1 players with TCS having his leg tight in Tier 1 player. Tier 2 vendors are considered Virtusua, INFOSYS, iFlex, Polaris, NIIT etc. and Tier 3 are small scale vendors like iGate, KPIT, MasTek and few such mid cap companies who are suppose to create good pedegree in market by winning big ticket wins.

3. Are this guys right in their approach towards marketplace? I feel few lack their delivery model which are outdated and rigid for marketplace. I feel they need to enhance their service delivery methdology.

4. I feel their is lot to be done by Functional and business analyst stuffing their big brains behind ARmani Suites. They need to take up the global level compliance issues like SOX,Check21 and BASEL II. This compliance are usually expanses and does not show up ROI thus, ignored by banks as well as not on the selling list of these analysts. These analyst are the one who can show them the writing on the wall for loosing competitive advantages in market place. McKinsey and PwC has better capabilities and they can partner with Tier 2 or Tier 3 companies to team up and grab the market together with dual edge sword of Business as well as Technology Excellance ANY TAKERS?????