I hate to be a big neg-bomb, but the utter dearth of new innovations coming out of the core players is really bringing my clients down, dude. Seriously. Fifteen years ago the whole industry was abuzz. We had OSI, EastPoint and Phoenix emerging with new architecture and an updated look/feel, and we all thought the market was about to explode with Raw Coolness. “But nooooo!!!”
So 15 or 20 years later, we have maybe one innovative product in the market, and even that is debatable. Sure, we have Acumen emerging in the credit union market with some newer technology. But despite some impressive signings, Acumen can’t finish a meaningful conversion to save its life and is getting sued along the way.
So, why is the innovation level at our core vendors stuck on empty? Well for one thing, what many of us used to call core vendors are now in some cases really payments companies. Take a look at this table depicting segment performance for the first nine months of 2012 at our two largest vendors, FIS and Fiserv. If you wonder why we’ve lost that innovative feeling in the core groups, look at where the money is.
Payments Revenue/Financial Services Revenue 122% 107%
Payments Operating Income/Financial Services Operating Income 102% 126%
Source: SEC 10-Q filings via EDGAR Online
Looking at the most innovate products at the major vendors now, we’ll notice a pattern:
Vendor Most Innovative Product Self-Developed?
FIS Bill Pay No, acquired
Fiserv Mobiliti (mobile) or CashEdge (payments) No, acquired in either case
Harland CreditQuest (commercial LOS) No, acquired
Jack Henry Yellowhammer (risk) No, acquired
Open Solutions Core suite Yes
I submit that GonzoBankers demand the following list of realistic innovations from their core providers:
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5 thoughts on “Innovationless Cores a Real Bummer”
In this day and age, changing cores is the equivalent of a heart-lung-brain transplant without anesthesia. One has to be SO unhappy to make this look like a positive experience. And yet, the vendors still lead either with price. Or with the same tired old pitches (“You can set up a new product in 2 and a quarter minutes!”) . Please……..
While OSI’s corporate struggles are certainly an issue I think their approach to innovation with the DNAppstore is at least worth a mention. Regardless you’ve clearly made the argument that for the vendor community the money isn’t to be made in core but getting a fractional share of each payments transaction.
Loved the comments on Data Management. We converted to Harland Ultradata in 2004 with the promise of a data warehouse with a Cognos front end. They never got it off the ground and today Harland has nothing to offer in this space. I don’t believe they see a need.
Problem is… “The core guys could, if they really wanted to, spend a lot of time and money in integrating and normalizing third party data into the warehouse, and in doing so – simplifying reporting”
We end up paying them to do it…. so doing the above will reduce a revenue stream….
Tough roads ahead.