Core Banking Vendor Study Results Show Small Bank TrendsThe 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.
Concerns about fraud and the overall newness of the technology have prevented many banks from deploying remote deposit. â€œThat 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,â€ 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.
â€œThe survey also found that a vendorâ€™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,â€ noted Barry. This often results in the core banking providers being the lead vendor for most small banks, she continued. â€œCore 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.â€
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.