In 2007, 579 US financial institutions are expected to deploy new cash management technologies, according to a new report by research and advisory firm Aite Group. This figure is up 30% from 2006.
Fierce competition, changing bank strategies, globalisation, and a more stringent regulatory environment are some of the forces leading financial institutions to rely more heavily on cash management technology than ever before, the report says.
The report analyses 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 organisations, and change their strategies.
It finds that although the top ten financial institutions continue to use combinations of self-built and vendor-built cash management solutions, most banks outside that group now depend on vendor solutions.
Also, says the report, 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. Aite Group believes this pressure is resulting in more frequent solution releases and aggressive development of new features, 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,” says 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.”
As well as analysing the challenges facing vendors of cash management technology, it also evaluates the vendors themselves. The report gives awards to vendors in several categories, including “best solution offered by a core banking provider” and “most new client deployments during 2006.”
The report also profiles 10 vendors: ACI Worldwide, BANKLINK, Bottomline Technologies, Corillian, Digital Insight (an Intuit Company), Fiserv ITI, Fundtech, Jack Henry, Metavante, and S1.