The Citigroup Inc. spinoff i-flex solutions ltd. of Bangalore, India, which created Flexcube, the world's top-selling core processing software, hopes its new version will help it crack the U.S. market.
Today i-flex will introduce a version that runs on International Business Machines Corp.'s DB2 database and WebSphere Internet-services architecture instead of an Oracle Corp. database. Because of IBM's clout in the market, the change may make Flexcube more attractive for in-house installations as well as outsourced applications.
Though i-flex opened a United States office in March 2003, only one bank operation here is using its software - Juniper Financial Corp., a credit card issuer that Barclays PLC is buying from Canadian Imperial Bank of Commerce.
I-flex ranks No. 33 in American Banker's FinTech 100 list of the top technology vendors to U.S. financial services companies. Worldwide, though, Flexcube has been the best-selling core processing software for the last two years, according to "International Banking Systems Market Report 2003/4" from the British market researcher firm IBS Publishing.
R. Ravisankar, i-flex's chief executive officer of international operations and technology, said last week that it has averaged a software sale every 10 days for two years.
"We have achieved very rapid acceptance in the market," he said.
Citigroup uses Flexcube in more than 60 countries and plans to use it in a total of 99, an i-flex executive said. Citi founded the company in 1985 as Citicorp Information Technology Industries Ltd. and spun it off in 1992.
Mr. Ravisankar said that though the new IBM version of Flexcube is "a global offering," the United States is "one of the focus areas."
Don Free, a principal analyst at the research and consulting firm Gartner Inc. of Stamford, Conn., said the IBM version would be especially appealing in Europe and perhaps in Asia.
There will be interest in the United States too, even among top-tier banks, Mr. Free said. But switching core processing systems can endanger crucial record systems, and he doubts that many of the country's biggest banks are eager to do that, he said.
"I don't see it happening," Mr. Free said.
Nevertheless, adding an IBM version provides "another dimension to i-flex's capabilities," he said.
Mark Greene, IBM's general manager for global business, was more upbeat. The U.S. market for banking technology has been sluggish for several years, he said, but "we think those days are beginning to end." That would mean good timing for the new version of Flexcube, he said.
I-flex and IBM announced their partnership on the project a year ago.
Flexcube's modular design could make bank conversion projects less painful, Mr. Greene said. Rather than make a "big bang" conversion, banks can switch particular functions, such as the opening of accounts or the origination of automated clearing house transactions.
"We're seeing good signs of early market demand for this class of offering," he said.
