I have been known to say the top 140 U.S. banks march to 140 drummers when it comes to technology. They each do it their unique way. But these days, I believe I have found some common denominators among U.S. banks in my attempt to view the bank IT world as only two parts: U.S. and everywhere else.Initial use of technology: Early 60s (U.S.); Early 80s (Others)
Architecture: IBM (U.S.); Emerging (Others)
Software: Home grown (U.S.); Vendor-supplied (Others)
Primary software suppliers: U.S.-based (U.S.); India, Switzerland, U.K., Germany, Bermuda, U.S. (Others)
Number of software suppliers: 5 (U.S.); 13 (Others)
Ability to modernize IT: Very low (U.S.); Eager (Others)
In the large bank arena there are two camps: banks that are holding on to their legacy systems for dear life, and banks that want the benefits of modern architecture. The U.S. banks started early with what was in vogue at the time and have been adding functionality for 40 years. So today they are stuck with almost custom systems in terms of functionality and they love what they have. International banks, on the other hand, got in later, which was an advantage because newer architectures were ripe with availability and that's what they chose. Did they get robust functionality? In my opinion, no. Functionality is a time-sensitive thing. It comes from 40 years of satisfying nagging customers to add a little of this and a little of that. The international vendors haven't even been in business for 40 years.
It seems to me that it's time to reconsider my opinion about functionality. For example, a recent press release from FIS got my attention. One of their core systems was "successfully converted" at a large bank in Thailand. By U.S. standards, that bank would rank No. 45. I first noticed Profile when it appeared in Automation in Banking - 1999, then a product of Sanchez Computer Associates, Inc. I'm just guessing, but I don't believe Profile has been sitting idle for the past 10 years or more without a high-energy workout in the process of satisfying a multitude of user needs, as is the case with most bank software products that have survived. What I'm saying is that by now, Profile has added enough functionality to its already modern architecture to provide a very appealing offering to any of the top 140 U.S. banks. With more than 200 customers pushing the envelope, it seems unlikely that Profile would come up short if examined by 140 U.S. banks.
It may be that newer, modern architecture core systems are now functionally robust enough to approach the U.S. market. If we ever get past the banking crunch, and that's a huge IF, large banks might be ready to shift their attention from TARP, unlending, capital infusions, CEO replacements, mortgage foreclosures, credit card defaults and fee-gouging to good-ol'-days thinking like, "Let's upgrade the IT factory."