Banking executives have their hands firmly wrapped around their wallets when it comes to IT purchases. To hear Cristobal Conde tell it, the office door's pretty tough to pry open as well.
"Since the crisis began, I have only met with a couple of vendors myself, only the ones that I thought could transform the company," said the SunGard Data Systems chief executive. "Our clients are doing the same thing. They only have time for two or three vendors. The kinds of protections that used to exist are gone. [Firms] are really thinking this is a life-and-death struggle on how to differentiate themselves."
Conde said SunGard, which reported 2008 revenue of about $5.6 billion and counts most of the world's largest 50 financial firms as clients, is among those that are managing to get a foot in the door. He said it does so by selling ease of use and recent advancements in interoperability among the wide range of systems accrued from a series of acquisitions, particularly since the firm went private in 2005.
Conde said SunGard grew about "2% or 3%" in the first quarter and shrank slightly, at a minus-0.5% rate, in the second quarter. Those numbers are hardly earth-shattering, but Conde said they're understandable in a struggling economy.
"The growth was an organic increase in market share in a contracting market," the CEO said. Part of SunGard's strategy has been to allow cash-strapped financial firms to upgrade while avoiding expensive enterprise overhauls.
In the past year SunGard unveiled a new version of its WealthStation product that includes a dashboard for viewing client and account activities, work-flow management, data sharing across applications and the integration of trading, rebalancing and householding capabilities. SunGard said its investment in service-oriented architecture and business process management architecture delivered in a software-as-a-service (SaaS) environment allows institutions to upgrade in increments and integrate into an existing infrastructure, so a bank can add functionality gradually. It's easier on a bank's IT budget than embarking on a broader project.
For example, if a financial institution "needs to control limits better, they can buy a Web service from us delivered on a per-usage basis that does limits and conforms to interoperability standards so they can hook up to an [existing] securities or capital markets trading solution," Conde said. "In this environment," clients "don't want to replace everything they have. They want to add to what they have without incurring huge capital costs."
Craig Gordon, director of correspondence adviser services for Royal Bank of Canada, said the recent SunGard upgrades have helped the institution enhance the customer relationship services it makes available to independent brokerage firms and investment advisers that serve retail customers. The institution is doing this by using SunGard's technology to integrate data analysis, asset allocation, investment analysis, tracking and transaction execution. "Maintaining data is a difficult task when you are working with separate systems," Gordon said. "[Advisers] today need more than a system to enter transactions."
Conde said institutions choose which components to deploy, such as account opening, calculation of asset allocations, the entry of a consumer's financial goals; WealthStation is a "frame" upon which other systems can be added. "SOA makes that possible," Conde said. "If we didn't have an SOA approach, we wouldn't have landed the RBC contract."
By honing integration and interoperability among legacy systems to enable piecemeal upgrades, SunGard - which faces competition from firms like Thomson Reuters in the back-office space and myriad Wall Street tech firms on the capital markets space - is addressing criticism that the company is a collection of disparate parts picked up in acquisitions.
"A common, quite valid complaint about SunGard was that no two products could talk to one another," said Adam Honore, a research director for Aite Group. "They've done a good job of fixing that. You don't hear those complaints from SunGard customers anymore."