Core banking vendors sit at the center of a significant portion of the bank technology market in U.S. When new technology becomes available, mid-tier and small financial institutions look to their core processing vendors for leadership and innovation. In light of the surging interest in mobile banking services, TowerGroup believes that these financial institutions should move ahead with the deployment of mobile banking solutions with confidence that their core banking vendors will provide the key to start the engine of mobile banking.
âDemographic shifts and new customer expectations along with technology maturity are converging to create fertile ground for mobile banking,â said Virginia Garcia, TowerGroup research director in the Emerging Technologies practice. âWithin a few years the mobile device will be the primary access point for consumer banking, with 40 million U.S. consumers using mobile banking by 2012. Core banking vendors will be important contributors to the widespread proliferation of integrated mobile banking services and will fundamentally reshape the vendor ecosystem for mobile banking solutions. As the focus shifts from âtechnovationâ to return on investments, the core banking vendors are ideally positioned to enable proper business economics in support of mobile banking.â
Highlights of the research include:
â¢ Increasingly, U.S. banks are recognizing that offering mobile banking services can help them to reach new customer segments, such as the youth market and the unbanked, which have a strong affinity for mobility.
â¢ TowerGroup believes that in 2008, mobile banking will finally emerge as a basic, necessary service for U.S. banks and therefore a âmust haveâ in the solutions arsenals of core banking vendors.
â¢ Recent mobile banking announcements from such technology vendors as Fidelity Information Services, Jack Henry & Associates, Metavante, and Open Solutions Inc. represent the first step in a multi-pronged, evolutionary strategy with regard to integrating mobile payments more deeply into the U.S. banking infrastructure.
â¢ As the mobile banking and payments market evolves throughout 2008, the associated vendor ecosystem will change markedly. Core processorsâ strategies may eventually call for internal development or even acquisitions of boutique suppliers that are struggling to win the confidence of financial institutions looking to push forward on the mobile delivery channel.
Virginia Garcia is returning to TowerGroup as a research director with a focus on emerging technologies and business models. Before her return, Garcia spent two years at Fiserv CBS Worldwide, most recently as vice president of Market and Product Strategy. During her prior six years at TowerGroup, Garcia served as a research director in the Financial Services Strategies & IT Investments practice responsible for a range of topics, including enterprise risk management, outsourcing, business process management, emerging markets, and IT spending analysis. Prior to joining TowerGroup in 2000, Garcia directed global market research activities at ALLTEL Information Services, encompassing core lending and deposits systems, delivery systems, and Internet banking.