Core Banking Vendor Study Results Show Small Bank Trends

The small bank market depends on its leading vendors for its latest technologies, including remote capture, and fraud and security applications, according to a report completed last month.

In the new report, Evaluating the Vendors of Small Banks' Core Banking Systems, Aite Group evaluated and compared the small-bank core systems, cross-selling strategies, and successes of eight of the leading technology providers in the U.S. small-bank market.

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Concerns about fraud and the overall newness of the technology have prevented many banks from deploying remote deposit. “That being said, the recent survey of 207 community banks conducted by Aite Group in cooperation with the Independent Community Bankers of America found that 46% of banks with under $5 billion assets plan to deploy the technology over the next 3 years,” said Christine Barry, Research Director with Aite Group and author of the report. Deployments are being driven by customer demand, the desire to grow deposits, and a changing strategy focused on increased penetration in business banking, Barry explained.

“The survey also found that a vendor’s ability to meet most of their technology needs is a key consideration in the vendor selection process for 50% of banks with under $5 billion assets,” noted Barry. This often results in the core banking providers being the lead vendor for most small banks, she continued. “Core providers have had the greatest success to date cross-selling Retail and Business Internet banking and branch/teller applications. Most small banks also look to these vendors as well as their online banking providers (who often have reseller agreements with security companies) for fraud and security applications given their often limited resources for performing the necessary due diligence.”

The report includes detailed profiles on COCC, Fidelity National Information Services, Fiserv, Harland Financial Solutions, iFlex Solutions, Jack Henry, Metavante, and Open Solutions. Fifteen core banking solutions were compared against target markets, the number of small-bank deployments, vendor sales pipelines, pricing models, technology, the deployment environment, functionality, and the main reasons why they are selected.

About the Author

Linda McGlasson

Linda McGlasson

Managing Editor

Linda McGlasson is a seasoned writer and editor with 20 years of experience in writing for corporations, business publications and newspapers. She has worked in the Financial Services industry for more than 12 years. Most recently Linda headed information security awareness and training and the Computer Incident Response Team for Securities Industry Automation Corporation (SIAC), a subsidiary of the NYSE Group (NYX). As part of her role she developed infosec policy, developed new awareness testing and led the company's incident response team. In the last two years she's been involved with the Financial Services Information Sharing Analysis Center (FS-ISAC), editing its quarterly member newsletter and identifying speakers for member meetings.

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