When the Levee Breaks: International Core Vendors Entering the US

by James O'Neill,  Stephen Greer, December 16, 2014
North America

Abstract

International vendors have been eyeing the US market for years, investing significantly in the hope of establishing a beachhead in the competitive and very large US market for core banking systems.

With more financial institutions than any other country, the US is attractive enough to warrant investment by international vendors. There are significant barriers to entry, but work being done by some large global players is starting to pay dividends.

In the report When the Levee Breaks: International Core Vendors Entering the US, Celent begins by tracking the trends within core banking in North America and then examines each of the international vendors making progress within the market.

Celent estimates the North American (US and Canada) core banking market to generate revenue of $2.9 billion in 2013. It should grow at 3.7% annually, reaching $3.3 billion in 2017. The market is large, lucrative, and growing, but many of the opportunities will likely come from selling ancillary products rather than the core.

“Consolidation among domestic vendors has reduced development resources for some legacy core banking platforms, creating a market opportunity for international vendors. The banking market in the US is steadily approaching a watershed period for core transformation,” says James O’Neill, a senior analyst with Celent’s Banking practice and coauthor of the report.

“Over the years, many core platforms have grown to include a number of ancillary solutions, but some of the architectures are still unflinchingly rigid and inordinately complex,” says Stephen Greer, an analyst with Celent’s Banking practice and coauthor of the report. “The challenges of the digital banking era are making large banks think again about modernization.”

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

US Market Landscape

2

 

Challenges

6

 

Opportunities

7

International Entrants to the US Core Market

9

 

Infosys Finacle

9

 

SAP Transactional Banking

11

 

TCS BaNCS

13

 

Temenos t24

15

Final Thoughts

18

Leveraging Celent’s Expertise

19

 

Support for Financial Institutions

19

 

Support for Vendors

19

Related Celent Research

20

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