In 2007, 579 U.S FIs are expected to deploy new cash management technologies, up 30% from 2006. Fierce competition, changing bank strategies, globalization, and a more stringent regulatory environment are some of the factors that are leading financial institutions to rely more heavily on cash management technology than ever before.
A new report from Aite Group, LLC, analyzes the evolving competitive landscape for vendors of cash management technology. It identifies how new challenges and market demands are driving vendors to participate in merger and acquisition activities, restructure their organizations, and alter their strategies.
This impact report points out that while the top ten financial institutions continue to use combinations of self-built and vendor-built cash management solutions, most banks beyond that group now depend on vendor solutions. Meanwhile, banks' more sophisticated needs and their increasing reliance on technology are placing pressure on technology vendors to comply and meet the needs of the banks they serve. This pressure is resulting in more frequent solution releases and aggressive new feature pipelines, as well as improved dialogue with customers and vendors that are taking on more of an advisory role.
"Succeeding in the cash management technology space is more difficult for vendors than ever before, and simply offering a best-of-breed solution is no longer sufficient," said Christine Barry, research director at Aite Group. "The key to success is possessing the ability and wherewithal to not only deliver easy-to-use cash management capabilities to banks and their customers in a timely and cost-competitive fashion, but also to offer a full product portfolio, tight integration, and a certain level of innovation that goes beyond traditional cash management offerings."