Automated Banking Systems (ABS)

Digits and shares

(according to the publication of the Finance newspaper)

There are no independent analytical estimates of the ABS market yet, but revival of the market of bank automation is noted by both banks, and suppliers of specialized IT solutions. Approximately it is possible to provide dynamics proceeding from estimates of market leaders. Alexander Gentsis, the board member of Diasoft company, considers that the size of the market of the core banking system in 2010 will be about $175 million, and growth in comparison with 2009 – 5%. Andrey Fomichev, the vice chairman of the board of CFT, is sure that the market of bank automation in 2010 will grow not less than by 15%. And the greatest activity, according to the CEO of R-Style Softlab Andrey Galkovsky, is visible in segments of front office and remote service.

Estimates of representatives of business, of course, are based on own experience.

The representative of CFT is most optimistic, but also revenue of his company in 2010 grew by 36%. Its most part is the share of sale of the software and rendering processing services. Other leaders voiced more modest progress. Revenue of R-Style Softlab last year increased by 15% in comparison with 2009, Diasoft – for 6%, and Inversions – for 10%. And behind the last digit first of all there is an expansion of the customer base, but not the growth of turnover on old clients.

Last summer the Association of regional banks of Russia conducted survey of bank IT specialists. More than 80% of a total quantity of the Russian organizations participated in it. Poll showed that by the number of implementations in the ABS market the R-Style Softlab company occupying 24% of the market continues to be in the lead. However, its share within several years gradually decreases. It is followed by Diasoft (17%), on the third place of CFT (9%). Steadily growing Inversion (8%) catches up with top three.

It is interesting to compare status quo to dynamics of the leading suppliers of banking systems given about new contracts. Annually the IBS Intelligence company specializing in monitoring and the analysis of global banking systems and banking activities publishes the rating of leaders of sales of the core banking system (The IBS Sales League Table) in the local markets. Data on sales in Russia provided five Russian companies: CFT, Diasoft, R-Style Softlab, large-scale integrated circuit and Inversion. Other suppliers of the core banking system (for example, "Quorum", "A swagger – Banking systems", Colvir Software Solutions) refrained from participation in poll. Year was difficult, and decided to sound financial and production indicators the few.

The "inversion" which was in 2010 the second in number of new clients headed the list. In the 2010th the company sold 18 core banking systems. Approximately in half of cases the new systems became replacement of outdated versions RS-Bank from R-Style Softlab. CFT, several years in a row holding a palm in this competition, follows in the tracks. In the 2010th at the company of 17 new buyers of the core banking system. Banks whose business gains steam, such as Rosinterbank, Express bank and Aksonbank became them. They preferred a system on new, provided in 2010, to platform 2 MCA (Mission Critical Application). The others – them still more – purchased former solutions: CFT Bank and CFT Retail bank founded on DBMS Oracle.

Diasoft has 10 transactions, is three more, than in 2009. The company signed two agreements on use of new SOA- a product FLEXTERA. In one case this end-to-end solution for ensuring retail transactions, in another – the full-scale core banking system.

And the fourth place is shared by the large-scale integrated circuit and R-Style Softlab: at both companies in 2010 on 7 new contracts. At the same time large-scale integrated circuits made breakthrough in comparison with 2009, and R-Style Softlab, on the contrary, slightly handed over positions.

On survey results of ARB, the possibility of change of the core banking system is considered by only about a third of the Russian banks, more than 60% of the core banking system are not going to change. The banks which changed the core banking system last year can be counted on fingers. It is, for example, Energoprombank, Moscow Bank for Reconstruction and Development, Rosinterbank, the Russian mortgage bank. The competition among suppliers of IT solutions in a segment of large banks is traditionally high, and serious changes for last year were not here. Andrey Galkovsky noted significant growth of the competition during the work with mid-sized and small banks which hurried to use the crisis dumping prices to begin upgrade of the IT-systems.

Invasion is postponed. Experts of the market of bank automation predict not the first year gain of the competition from foreign developers and reduction of a market share of the Russian suppliers of the core banking system. "However life shows that implementations of the western core banking systems in the Russian market do not become any more, and meanwhile the Russian developments "mature", qualitatively develop and improve", – Dmitry Makarychev, the vice president of Inversion says. According to IBS Journal, from large international suppliers of banking software in 2010 Calypso was succeeded to sign three contracts in Russia, and Thomson Reuters – one.

Market participants note that banks raised requirements to efficiency of IT solutions and efficiency of their start. In the conditions of the growing competition and post-crisis close attention to own costs its effectiveness became a keynote of negotiations of banks with suppliers of IT infrastructure. Investments into IT are considered more carefully, than earlier. First of all those sections which are especially important right now are automated. Suppliers should prove advantage and timeliness of the embodiment of the offered projects, to adapt the solutions for new requirements, to bring systems into commercial operation quicker and to provide their permanent upgrade. Banks consider the directions of automation, most relevant for the development, in decreasing order of importance services for individuals, workflow automation, service of legal entities, issuance of credits and work of the front office. Sharply grown interest of banks in implementation of the front office systems is connected with return to pre-crisis rates of crediting. Remote banking became the channel of the personalized sales, and mobile devices begin to play more and more major role. Andrey Galkovsky sees the high interest of banks in customized applications for smartphones and tablets already now.