An alliance spearheaded by Tokyo-based NEC Corp. and aimed at replacing mainframe-based core banking systems has added BEA Systems Inc. as a partner.

The Global Banking System alliance, which also includes Hewlett Packard Co. and Oracle Corp., intends to combine the technologies of the four partners to develop a distributed, or client/server-based, processing platform for core banking applications.

Each partner's technology will be integrated with NEC's application framework, known as Diosa Enterprise, for Distributed Integrated Open Systems for Application.

BEA said its middleware will serve as the "transaction backbone."

The alliance will focus first on selling its software to banks in Japan, and then in the United States.

BEA is already used by many banks in Japan to drive mission-critical and e-commerce applications, the company said.

Large banks, which have long relied on mainframe computers to run their operations, are moving slowly to embrace distributed computing, which is said to offer greater flexibility and scalability.

Last month Sanchez Computer Associates Inc. of Malvern, Pa., announced Citibank NA, ING Group, and the Irish League of Credit Unions would install its distributed Profile/Anyware core processing system.

Citi will use the software to support its global consumer business.

Netherlands-based ING has installed it to support its direct bank in Spain, after a successful pilot with ING Direct in Canada.

The more than 500 affiliated credit unions in Ireland will use the software to support core data processing.

Microsoft Corp. also is attempting to topple the mainframe's stranglehold on running core banking applications with its DNAfs framework, or Distributed Internet Application for financial services.

Available for just over a year, seven U.S. banks and nine foreign banks are using the middleware, which runs on Microsoft's NT server operating system and its Windows client software, to support various applications.

SunTrust Bank uses it to support its call center, branch, and Internet channels, while Cleveland-based Ohio Savings Bank uses it for its call center and Internet applications.

Microsoft also has installed its NT servers in some high-profile locations.

The Chicago Stock Exchange, the nation's third-largest, runs on six dual-processing NT servers, said John V. Grispon, worldwide banking industry manager for Microsoft.

The exchange handles an average of 70,000 trades a day.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.