A few days ago, I “rediscovered” a brochure from a museum in Stockholm. It reminded me of an early 17th century warship: The Vasa. She was the most powerful warship of her time — albeit for less than half an hour, as she sank during her maiden voyage. The reasons for this disaster include top management interference, overly sophisticated requirements, weak communication, and overengineering. Why is this relevant today? Because projects have not changed that much: The Vasa story reminds me of a number of interactions I had with Forrester clients about banking platform transformation projects that ran well — or not so well.
A large share of the less-successful projects showed a number of the ingredients of the Vasa story, causing what I like to call the Vasa effect: predictable failure. Examples include:
Off-the-shelf projects that had to manage a burden of business requirements that were so sophisticated that no off-the-shelf system could ever hope to cope with all of them in a cost-effective way. In parallel with the Vasa story, in these cases nobody dared discuss whether the last 15% or even 5% of the requirements were really important enough to justify the additional cost — or whether delivering 85% of the requirements would be good enough.
So-called off-the-shelf solutions that were more custom-built than a real custom-built solution. They had to align with a bank’s off-the-shelf strategy while living up to concretely defined, highly sophisticated, and very individual business requirements, including solitaire business process definitions.
A couple of days ago, global banking platform vendor Temenos announced that it has signed an agreement to acquire Odyssey Financial Technologies, which specializes in the private banking, private wealth management, and asset subverticals of financial services. The deal is expected to close around mid October: Temenos will pay more than 60 million euros and take on Odyssey’s existing debt obligations of more than 20 million euros. Here is my initial reaction to the planned acquisition.
On the asset side, Temenos will get the private banking platform Triple’A Plus, portfolio management and decision support solution WealthManager, plus clients such as Banque Cantonale Vaudoise, Delta Lloyd, and RBS Coutts Bank. This will help Temenos accomplish the necessary extension to its private banking footprint: In spite of prominent private banking clients such as EFG Bank, over the past few years Temenos’ T24 has not been as successful in the private banking/wealth management arena as, for example, ERI Bancaire, SunGard, or Tata Consultancy Services Financial Solutions as far as new named customers are concerned — not to mention the various regional private banking pure players.
At the same time, the Odyssey solutions will add additional technologies and architecture to Temenos’ already existing acquired portfolio: Not considering the two “classic” Temenos banking platforms T24 and TCB and the mobile solutions of recently acquired specialist vendor FE-Mobile, Temenos acquired multiple smaller banking platform vendors over the past few years, including Financial Objects in the UK and Viveo in France, plus further firms such as business intelligence and reporting vendor Lydian Associates.
I have discussed questions such as “Which banking platform vendor is the right one for a given financial services firm in its specific requirements context in a given country?” with Forrester clients for some time. Interestingly, the share of these discussions touching on questions such as “How viable is vendor X?” and “Is vendor Y the right one for a bank the size of mine?” is increasing. What is the reason for this?
It is clear that in such a global situation, the reduced deal numbers of many vendors and the economic trouble of some are reason for concern for many delivery teams making or supporting the long-term decision for a new banking platform vendor — particularly when preliminary findings from a Forrester survey show a new thrust for the renewal of the financial service application landscape. At the same time, banking platform vendors’ behavior is changing:
I just returned from a business visit to India, and on the long way back, I had the time to sort out some observations and ideas on the future of the banking backbone that I had discussed with bankers as well as banking platform vendor execs over the past few weeks. But let me start from the beginning.
A few days ago, CSC announced its new Celeriti banking platform, which consists of five products: Celeriti Customer, Celeriti Deposits, Celeriti Loans, Celeriti Cards, and Celeriti Merchant. The solution includes, for example, a strong business process focus, business intelligence, and the so-called Web Portal User Interface. The platform has been built around IBM application infrastructure, runs on multiple operating systems such as z/OS, z/Linux, Linux, and Windows, and has been validated for use with the IBM Banking Industry framework. Here is my initial reaction to Celeriti.
One of the most common questions banking eBusiness executives ask Forrester analysts is: "What do you think of my Web site?". That's always a tough question to answer because what I think of a Web site depends on who I am and what I'm trying to use it for. To help UK bank eBusiness executives answer that question, my colleague Vanessa Niemeyer has just published a benchmark of the sales content and functionality on the Web sites of 10 of the UK's biggest banking brands, from the perspective of a typical customer trying to switch current account provider.
Some background: UK Net users are among the most likely anywhere in the world to use the Net to research and buy financial products. According to our Consumer Technographics® surveys, almost 60% of UK Net users have researched a financial product online in the past 12 months, more than in any other European country. Two out of five UK Net users have applied for a financial product online in the past year, which is double the Western European average. So you might think that UK bank Web sites are all highly effective sales sites.
When designing application infrastructure strategy, planning for the renewal of their application landscape, or assessing their overall strategic position, banks and other types of firms in financial services typically like to know the answer to the question: “What are the others doing?” In the past, surveys similar to our newest financial services survey helped application delivery professionals as well as enterprise architects assess their position, for example, regarding application infrastructure strategy as well as broader application renewal initiatives and position their individual initiative in the regional or global IT and business environment.
Recently, I discussed complexity with a banker working on measuring and managing complexity in a North American bank. His approach is very interesting: He found a way to operationalize complexity measurement and thus to provide concrete data to manage it. While I’m not in a position to disclose any more details, we also talked about the nature of complexity. In absence of any other definition of complexity, I offered a draft definition which I have assembled over time based on a number of “official” definitions. Complexity is the condition of:
For the past couple of years, I have worked on the analysis of global banking platform deals at this time of the year. Currently, I’m again working on the results of a global banking platform deals survey, this time for the year 2009. Accenture and CSC did not participate in 2009, and former participants Fiserv and InfrasoftTech continued their absence from the survey, which started about two years ago. The 2009 survey began with confirmed submissions from a total of 19 banking platform vendors.
We would have been glad to see more participating vendors, in particular some of the more regionally oriented ones. However, US vendor Jack Henry & Associates as well as multiple regional vendors in Eastern Europe, Asia, and South America did not participate. Nevertheless, the survey saw some “newcomers” from the Americas, Europe, and the Middle East, for example, Top Systems in Uruguay, Eri Bancaire in Switzerland, and Path Solutions in Kuwait. Consequently, the survey now covers banking platform vendors in all regions of the world except Africa and Central America.
However, 19 was not the final vendor count: One of the 19 vendors, France-based banking platform vendor Viveo, dropped out of the survey because Temenos acquired it shortly before Viveo provided its data. Another vendor simply told us that it only saw business with existing clients and, in the absence of any business with new clients, it saw no sense in participating. While all other participating vendors won business with new clients (whether the rules of the game allowed Forrester to count that business or not), 2009 was not the best of times.