2012: The End of The World Or The Year Of Banking Platform Mergers And Acquisitions?

Jost Hoppermann

Some people say that the old Maya calendar predicts that the world will end in the year 2012. Will this happen? Most likely no. Without judging anybody’s beliefs in this ancient calendar: Some experts say that the Maya calendar is like a five-digit odometer in your car: When it reaches 99,999 kilometers or miles, it will restart at 0. However, 2012 is beginning to show the ingredients of the long-expected stronger consolidation in the banking platform space.

While it is not yet clear whether Misys and Temenos will merge to move out of the gap between gorillas and antelopes, French software and services company Sopra announced “a project to acquire a majority stake in the Belgian company Callataÿ & Wouters (C&W).” For obvious reasons, it is too early to provide any detailed comment on this announced merger. However, I see two initial areas of interest:

  • Sopra’s ability to integrate the new capabilities technology-wise and organizationally. Sopra has acquired firms in the past. However, its acquisition speed has accelerated enormously: It acquired Delta-Informatique in October 2011 and proposed the acquisition of Tieto Corporation’s UK financial services product business and the UK subsidiary of Business & Decision on February 13 — just four days ago.
Read more

The Merger Of Misys And Temenos — Moving Out Of The Gap Between Gorillas And Antelopes

Jost Hoppermann

Less than a week ago, initial information became public that Misys and Temenos may intend to merge. On February 7, 2012, a press release stated that “Temenos and Misys today confirm that they have reached agreement in principle on certain key terms and are in continuing discussions regarding a possible all share merger of the two groups.“ Now Misys and Temenos have about one month to finalize their merger — or abandon it. It is obvious that this merger has the ingredients to become one of the most significant mergers in the banking industry in the past few years. With the probability of the merger now sufficiently high, here is my initial take.

There are two obvious reasons for this potential endeavor of Temenos and Misys (let’s call the combined company MIsys-TemeNOS [“MiNos”] for the time being to avoid terms such as “new company” or “NewCo”):

  • A broader and deeper product portfolio for banking and capital markets. While Temenos has been a Global Power Seller in Forrester’s global banking platform deals survey for years, Temenos has so far struggled to win a large number of major banks as customers for its banking platform. The combined portfolio could make “MiNos” more attractive for larger as well as smaller potential customers — with an even broader set of point solutions as well as integrated apps offerings such as banking platforms.
Read more

Citibank Moves Boldly Into The Tablet Banking Market

Peter Wannemacher

Hotcakes, you've got some competition: the phrase "selling like tablets" might soon enter the global lexicon. And it's not all hype — though there is a fair bit of that as well. Tablet users in the US are estimated to grow at a compound annual growth rate (CAGR) of 51% from 2010 to 2015. That’s a fast-growing market for firms of all stripes.

As such, the tablet as a touchpoint is becoming a critical consideration for eBusiness & Channel strategists. This is especially true for executives at banks, as financial transactions benefit from the immediacy of the mobile channel, but users often struggle to make these transactions on smaller smartphone screens.

Enter tablet banking.

Forrester has previously identified best practices for tablet apps in financial services, but only in the past year have leading banks rolled out robust tablet banking efforts. One of the strongest tablet offerings we’ve seen is from Citibank.

In my new report, I outline the process Citibank went through in building its own tablet banking strategy, developing an iPad app, rolling it out to customers, and continually improving the service. We outline how Citi:

Read more

Forrester's CPS Practice Welcomes Our Newest Analyst - Denée Carrington!

Carlton Doty

Over the summer, I asked you all whether we are finally headed toward a cashless society. Since then the battle for the digital wallet has certainly heated up. Well today, I am thrilled to announce the newest addition to Forrester's Consumer Product Strategy practice. Her name is Denée Carrington, and she will be joining us as a Senior Analyst, covering consumer payments, starting January 3, 2012. 

To provide more specifics, here's a sneak peek at some of the coverage areas where Denée will be able to help Forrester clients with consumer payment strategy in the new year:

  • Defining the future of consumer payments
  • Managing a portfolio of payment products (e.g. credit, debit, prepaid, contactless, mobile, person-to-person (P2P), etc.)
  • The business models and profitability of these payment systems
  • Understanding the dynamics of customer (consumer and merchant) payment behavior
  • Understanding the payments needs of different markets
  • Sizing the different payments market opportunities
  • Driving customer (consumer and merchant) adoption of payments systems
  • Building and developing new payment systems
  • Optimizing existing payment products to improve security and increase convenience
Read more

The Future Of Banking Is Mobile – Or Is It?

Jost Hoppermann

A few days ago at Oracle OpenWorld 2011, I attended a presentation from one of the major consulting companies. The topic: banking in 2020. I heard about big data, the need for real-time analysis of information (in particular from the Internet), and a few other trends. While many of these trends were not new, I could only agree that they would be important in the future, as they align with Forrester’s 2008 research on what banking will look like in the future. (If you are interested in details regarding Forrester’s research on this topic, please see “Financial Services Of The Future: Collaborative Competition Will Be The Norm” and “Banking IT In 2023 Updated,” keeping in mind that 2023 is a metaphor for a longer-term perspective.) However, there was one statement within the presentation that I seriously disagree with.

Read more

The Promises Of Vendor Service

Jost Hoppermann

Just recently, I had an interesting customer experience — or, to be more precise, my daughter had it, as it involved her laptop computer from one of the top international Internet PC vendors. It was only a little defect — more an annoyance than a real fault. Since we bought “next business day service,” it should have gotten fixed right away. It played out differently in real life.

Read more

The Multichannel Organization Revisited

Jost Hoppermann

In 2006, Forrester found that organizational structure, internal enterprise goal systems, and most urgent business requirements were key obstacles on many firms’ journey toward broad multichannel solutions with rich cross-channel capabilities. At that time, a few advanced firms tried to establish a multichannel organization, an organizational layer to coordinate multichannel requirements and solutions between the different business groups and the IT organization. Has this changed over the past five years?

Read more

The Secret To Loyal Financial Services Customers

Bill Doyle

Eight years ago, Forrester set out to find the corporate trait that does the most to create loyalty among financial services consumers. Loyalty, of course, is about more than simply retaining customers: Loyal customers are willing to buy more, borrow more, save more, and invest more with the firms they already use. We tested dozens of variables, including the length of the customer’s relationship with the firm, the quality of the firm’s customer service, and the firm’s money management skills. One trait emerged above all others: the perception on the part of customers that the firm does what’s best for them, not just what’s best for the firm’s own bottom line. We call it customer advocacy.

Our research continues to show that customers who rate their firm highest on customer advocacy are most likely to stay at and do more business with the firms they use. In the just-published “Customer Advocacy 2011: How Customers Rate US Banks, Investment Firms, and Insurers,” we show which firms are ranked highest by their customers – and which ones bring up the rear. 

The Big US banks dominate the bottom of our rankings of 47 firms. Thirteen of the bottom 14 firms are banks, including all of the nation’s 10 largest banks. Fewer than one-in-four customers of Citibank and Capital One Bank believe that the firm has their best interests at heart.  Small banking institutions, on the other hand, are among the customer advocacy leaders – and are winning market share in the process. Two-thirds of the customers of credit unions and well over half of the customers of regional and local banks rate their firms high on customer advocacy.

Read more

First Details Of Forrester’s 2010 Global Banking Platform Deals

Jost Hoppermann

Forrester began surveying global banking platform deals in 2005. For 2010, we evaluated about 1,200 banking platform deals submitted by 23 vendors and located in more than 130 countries. Shortly, we will publish the final results of this evaluation. Today, I want to offer some initial trends:

Read more

The Data Digest: How Do Consumers Respond To Bad Customer Service?

Reineke Reitsma

To assess the state of customer experience in 2011, Forrester asked more than 7,700 US consumers in our Technographics© survey about their interactions with a variety of companies. Based on their responses, we calculated Customer Experience Index (CxPi) scores for 154 brands in 13 industries (for a detailed explanation on how the index works, read this post).

The most important finding was that for almost two-thirds of the brands in our study, their customer experience ranges from just “OK” to “very poor”. In fact, 35% of scores fell into the undifferentiated “OK” range — our most heavily populated bracket and not a good place to be if you want your brand to stand out from competitors. Only 6% of firms ended up in the “excellent” category, down from 10% of the brands in last year’s report.

What this tells us is that mediocre-to-bad customer experience is the norm, and great customer experience is really hard to find. But why does this matter? Because the old adage “A customer who gets good service will tell one person, yet a customer who gets bad service will tell 10 people” is very true. Another Forrester study shows that about one in three financial customers with a bad experience tells her friends, about one in five recommends that her friends avoid that given company, and one in 10 reduces their value of her accounts.

Read more