Open Solutions Inc. is positioning the newest version of its core processing application as a customer relationship management system that can help community banks compete more effectively against large ones.
The Glastonbury, Conn., vendor is expected to announce today that it has upgraded its flagship Complete Banking Solution application, though more than 30 clients are using it already.
The new DNA version uses service-oriented architecture and was developed using Microsoft Corp.'s .NET software, Open Solutions said. Separate versions are available for banks and credit unions.
"We view core, and the next generation of core, as being part of the DNA of a financial institution," said Mike Nicastro, a senior vice president at Open Solutions and its chief marketing officer.
Observers say that the core systems at many U.S. banking companies are in sore need of an overhaul, and that CRM applications, which are designed to help companies use customer information that may be stored in different departments, are among the most-wanted features.
"Look at all the things that are happening in payments and the flow of money," Mr. Nicastro said, citing check imaging and the new forms of automated clearing house transactions. "For financial institutions to compete, they are going to have to know more and more about the customer and about the transactions of the customer. If all they become is a collector of debits and credits for the payment stream, well, we certainly don't need 8,000 of them."
For example, checks are no longer processed only in centralized centers, he said — many banks now capture images in their branches, businesses scan checks in their offices, and there seems to be growing interest in letting consumers capture images at home.
"You can just see regulators' hair turning gray over that one," Mr. Nicastro said, and banks need "the tools to respond" to changes in operations and compliance.
The SOA-based upgrade was two years in development, and Open Solutions used focus groups with both customers and noncustomers to evaluate a variety of improvements to workflow and navigation, he said. It reduces the number of end-user screens to less than 300, from more than 500.
The software also has a shared application framework for services such as security and compliance, and it has toolsets that will let Open Solutions and its clients upgrade quickly in the future.
The vendor's application also lets banks use their core software as a CRM system, rather than sending customer information to a separate data warehouse for analysis, he said.
For example, the CRM functions could help a bank realize that a customer made several recent purchases at a boating-supply store and might be receptive to a pitch for a boat loan or marine insurance.
Open Solutions has no plans to force the upgrade on clients, Mr. Nicastro said. "We're not setting any sunset on the older solution," even though "most clients want to be on the latest and greatest."
Carl Faulkner, a principal at the Scottsdale, Ariz., bank strategy and technology consulting firm Cornerstone Advisors Inc., said that service-oriented architecture offers several advantages.
Many vendors are promoting such products, he said. "Open Solutions can pretty much claim to be SOA front to back, where others cannot."
The technology is also very complex, and many community banks lack the technical sophistication and staffing to install and maintain such applications, Mr. Faulkner said. "The bulk of them will look at a solution that they can put in a closet and forget about. Otherwise, it's just too costly."
