Oracle Corp.'s string of acquisitions in the banking technology market has prompted concern among some of the established players in the market.

However, observers say the $23 billion revenue software giant has not yet shown signs that it is planning a major push to increase its stamp on one of the most lucrative sectors in the technology business.

Oracle's mid-decade acquisition of a majority stake in i-flex solutions Ltd., which offers an open architecture banking core, and the acquisitions of PeopleSoft Inc. and customer relationship management giant Siebel Systems Inc., which gave it branch, teller and contact management capabilities, seemed harbingers of a sweeping move deep into bank technology.

Even its 2009 deal to acquire Java-giant Sun Microsystems Inc. (which closed last month) was viewed as evidence of its impending force in financial services, given Sun's impressive penetration of the sector. Not to be forgotten is the company's claim that all 20 of the world's top 20 banks run Oracle databases.

But fears that Oracle would swiftly come to dominate the banking technology market seem unfounded, at least for now. Oracle's progress in financial services looks more like an incremental advance than "progressive transformation," as it has called its strategy.

Oracle's approach seems to offer a wide range of information technology a la carte, rather than a company looking to seize the entire enterprise in a single stroke. "We have a lot of flexibility in terms of how we can migrate institutions into new technology," said Don Russo, a senior vice president in Oracle's financial services global business unit. "Banks can put in small slices of our solutions as they have the appetite. There is no big bang required."

Put another way, according to Bob Meara, a senior analyst at the Boston market research company Celent, "You have to wonder about Oracle's ability and willingness to focus adequately to get their fair share of the U.S. banking market."

For now, Oracle's share of the U.S. financial services tech market is worth about $2.8 billion, according to Financial Insights' estimates of its 2008 financial services revenue. But most of that is generated outside the U.S., and the financial services division accounts for only 12% of Oracle's total revenue.

Oracle's modest penetration of the market is not for lack of investment. In addition to i-flex and Siebel, Chief Executive Larry Ellison has added numerous applications specifically geared toward the financial industry including business intelligence, financial messaging, wealth management CRM and anti-money laundering and fraud detection (via its 2006 Mantas Inc. acquisition).

Oracle has also responded to regulatory pressure for banks to integrate their risk and performance management, releasing in September a suite of financial services analytical applications that augment its performance management software. "We see tremendous opportunity in the analytics realm," Russo said.

And there have been some compelling success stories in noncore banking projects. Bank of Montreal is a progressive user of Oracle's Reveleus Market Risk software.

Oracle reported last year that JPMorgan Chase & Co. is using its distributed document capture application to capture and index business documents, including loan applications, financial statements, invoices and checks.

Bank of New York Mellon Corp. is a long-term customer of Oracle's Siebel CRM and BI applications, as is PNC Financial Services Group Inc. The most recent version of Oracle's Flexcube Universal Banking system has timely appeal, given the market — it includes integrated support for all stages of loan origination and servicing, including mortgages.

"It's another avenue to reach out to institutions," said Karen Massey, a senior analyst in IDC Financial Insights' consumer banking division.

And if it's had limited success penetrating the large U.S. institutions that would seem the best fit for an enterprise vendor of Oracle's heft, the door to the smaller bank and credit union market may have been pried open a crack with the long-awaited first installation of the Siebel teller system that's rolling out this month.

America First Credit Union, a $4.9 billion-asset company with nearly 500,000 members, announced three years ago that it would become Oracle's first teller-system client in this country.

While the rollout to America First's 100 branches has taken about twice as long as expected, America First executives are enthusiastic about the system they helped Oracle design. "It's been a long road, but the reward will be very much worth it for us," said Randy Halley, the Ogden, Utah, credit union's senior vice president of branch delivery.

Among the changes America First requested to the Oracle system, which lengthened the implementation time, were the integration of check-image capture and a contact management system that links with the call center, e-mail and chat. "In the long run, what we've received from Oracle is a great system," Halley said.

America First was not deterred by Oracle's lack of U.S. retail banking experience when it signed on to become its first customer here, Halley said. It was more interested in being able to have a hand in designing the system.

But the America First rollout will not likely open the spigot in the near term, as retail banking is shaping up to be one of the financial industry's lowest priorities in terms of technology spending. U.S. banks are only expected to increase annual spending on retail banking technology by 1.9% per year through 2012, compared with 4.5% for wholesale banking, according to a January report from Celent.

One thing analysts agree on, it's not a lack of technical sophistication or innovation that's holding Oracle back. "Unquestionably, Oracle has the technical expertise and implementation prowess to succeed well in the U.S.," Meara said. "That's not up for debate. What is concerning is that Oracle's primary competitors in the U.S. space have lived their entire lives in financial services."