BankAmerica Corp. has set about quietly installing a new core processing system for its retail units abroad.
The San Francisco-based bank is converting most of its foreign subsidiaries to software from Fiserv Inc. The system replaces a three-year arrangement with M&I Data Services, a unit of Marshall & Ilsley Corp., using M&I software supplied through Software Alliance.
The bank operates more than 40 branches in 36 countries.
Earlier this year, BankAmerica contracted to use Fiserv's Comprehensive Banking System which runs on midrange IBM AS/400 computers in its retail business outside the United States. The $197 billion-asset bank still uses M&I's mainframe-based services domestically to aid in converting newly acquired retail operations.
The value of the Fiserv contract was not disclosed but is believed to be worth several million dollars.
"This is a major win for us," said Raju Shivdasani, president of Milwaukee-based Fiserv's banking division.
Joseph Delgadillo, president and chief operating officer of M&I Data Services, would not comment on his company's dealings with BankAmerica. BankAmerica officials also declined m comment.
The Fiserv banking software available in domestic as well as international versions provides multilingual and multicurrency options.
This retail system will be integrated with BankAmerica's homegrown wholesale operation, called the Global Banking System.
Sources close to the principals at Fiserv said BankAmerica favored the Fiserv system because of its flexibility in handling a wide range of volumes, as well as for its service features. It is said that system can be tailored to run retail operations in both Singapore and Hong Kong, even though the latter are much more extensive than the former.
The deal calls for the system to be installed at 12 BankAmerica sites over the next three years, starting in 1995 with Hong Kong, Macao, Singapore, the Philippines, and India. The system should be fully operational in some of these locations by the middle of 1995. If that goes well, a source said, the bank plans to expand the system to its Latin American and then its European markets.
This contract makes BankAmerica the first major U.S. bank to start using Fiserv's retail banking software abroad, and it is a coup for the fast-growing computer services firm. Fiserv's growth primarily through acquisitions -- over its decade of existence has started to bring it into direct competition with long-standing heavy-hitters like M&I, which is close by in Milwaukee.
Fiserv got the Comprehensive Banking System as part of an acquisition from Citicorp in 1991.
Before that, the system was owned by the Newtrend Group and Smith, Weiss, Delker, an investment group. Both Citi and Fiserv have pushed the product heavily in the international market.
A source who works closely with both outsourcing competitors, but who had not heard about the BankAmerica deal, said the reason for the switch may simply be cost effectiveness.
He said Fiserv's banking software has built a better reputation, and more than half of its client base is abroad, particularly around the Pacific Rim. The regional strength, and the system's ability m bring the operation in-house for BankAmerica may have made the difference.
"That they chose CBS is a reasonable decision," said Art Gillis, a consultant with Computer Based Solutions. "B of A made the decision to own the factory instead of renting it."
