Another global technology company is going after the core banking business of institutions in the United States and around the world.
Tata Consultancy Services, the information technology arm of Tata Group, announced Monday that it has started an operating unit called TCS Financial Solutions to sell financial companies core systems to track customers' deposit accounts and loans, among other software products.
Though Tata, of Mumbai, India, is better known as an offshore outsourcer, Dennis Roman, the chief marketing officer of TCS Financial Solutions, noted that the parent company operates in several other industries, from steel to hotels.
TCS became a separate operating unit on April 1, Mr. Roman said. "To run a products company, you need a different business model," he said.
He acknowledged that major U.S. banks have been reluctant to tamper with their core systems, many of which have been in place for 20 years or more and often tie in with scores of ancillary systems for transaction processing, security, information reporting, and other functions.
Even so, "the North American market has been fairly well tenderized for core banking vendor entrants," Mr. Roman said. "I believe the banks are giving serious consideration to core banking changes, as they were not four or five years ago."
He would know. Until this month Mr. Roman spent five years in marketing for the core processing vendor i-flex solutions ltd. of Mumbai, which is majority-owned by Oracle Corp.
i-flex landed its first U.S. customer in January, People's Bank of Bridgeport, Conn., which plans to convert its core deposit accounting system to i-flex's platform and to use other products from it and Oracle. i-flex opened its first U.S. sales office in 2003.
Other global vendors are also lining up their strategies for an anticipated wave of core replacements in the coming years.
Metavante Corp., the financial technology outfit being spun off by the Milwaukee banking company Marshall & Ilsley Corp., struck a marketing agreement in March with the Swiss software developer Temenos Group, with an eye toward the core processing business of the nation's biggest banking companies.
And though it has no U.S. clients, the German database vendor SAP AG, is touting its core processing work for ABN Amro Holding NV and Standard Bank Group Ltd., of South Africa.
Tata has developed its software offering around the BANCS core system developed by Financial Network Services, an Australian company that Tata bought in 2005. The system uses service-oriented architecture to tie together modules for functions including payments, lending, private banking, and wealth management.
Tata has won the business of some large-scale users, including State Bank of India and Bank of China, Mr. Roman said. "We are going to be very well positioned for the rest of the worldwide marketplace," he said.
Bart Narter, a senior analyst at the Boston research company Celent LLC, said the new unit would help Tata sell more of its financial software, but he was not sure many bankers want to overhaul their core systems.
"In Europe and Asia, and especially in fast-growing markets like China and India, it really is changing," Mr. Narter said. "In the United States, I am not predicting a massive migration of core systems in the next three to five years."
Vendors of modern software promote its ability to process transactions in real time rather than batches, Mr. Narter said, but "banks really like batches. Checks are still a huge payment system, and checks run in batches."
