S1 Corp., which has long focused on selling its online banking products to big banks, is now making an effort to promote software aimed at smaller ones.
S1's Postilion unit already offers software for several banking channels, and is working to make those products mesh better.
This strategy sounds very similar to the way S1 packaged its Enterprise product line for big financial companies — offering numerous modules that could stand alone but worked better when several were used together. However, Pierre Naude, Postilion's general manager, said he is charting a different course, in part because large banks were reluctant to take on the expense, and the installation, of using multiple Enterprise products.
"Enterprise was a big vision and dream that they started building from scratch," Mr. Naude said. "We are taking the opposite tack."
S1, of Atlanta, reorganized itself last month and made a point to give Postilion more prominence. It also named a new chief executive in November, Johann Dreyer, who was promoted from group head of Postilion. Shortly after being named CEO, he said that the company was overemphasizing its Enterprise products and that some potential clients did not even know S1 had software for small financial companies.
S1 took an important step toward making Postilion more visible this week, announcing a voice banking product that can interact with its automated teller machine software. The basic architecture for this link was built into the ATM software 12 years ago, and already works with Postilion's point of sale software.
Postilion already sells the voice product; the integration feature, which it began developing seven months ago, is what's new, Mr. Naude said. The unit is also adapting its Internet banking products to work together, he said.
Both the Enterprise and Postilion product lines are built to interact with each other across channels, so customer data can be shared with several business lines. But while S1 made this one of the main selling points for Enterprise, Postilion calls it simply a perk, Mr. Naude said.
He noted that Postilion sells packaged software that is much easier for banks to install than the more complex, often customized, Enterprise products. And though he said customers will benefit from using multiple Postilion products, his sales team is not pushing customers to do so as zealously as S1's team did with Enterprise.
The initial response seems to be positive. With this contrary strategy, "I have not seen any pushback" from community banks, Mr. Naude said.
Penny Gillespie, the president of the advisory firm Gillespie International Inc. in Centreville, Va., said the basic idea behind interoperable products is sound. S1 had problems marketing Enterprise because replacing numerous products is such a major project.
Ms. Gillespie said this is a good time for Postilion to break out of the S1 shell. Other banking software vendors that serve smaller institutions are in transitional stages: Online Resources Corp. is still absorbing Princeton eCom Corp., which it purchased last year, and Digital Insight Corp. was sold to Intuit Inc. last week.
"The timing is good," she said. "It might be a good time for a new face to emerge."
Emulating the Enterprise product strategy, if not its sales approach, could help, and redesigning products to make them interoperable may make Postilion stand out, Ms. Gillespie said. "If you've got not only an application, but an application that is interoperable, you've got two points with one stone-throw," she said.
And though S1 had some difficulty marketing the same feature to larger banks, "the smaller ones are generally more nimble, and change to them is not nearly as challenging," she said.
Alenka Grealish, who manages the banking group at the Boston market research firm Celent LLC, said it's a good idea for Postilion to concentrate on smaller institutions. "There is great potential for more modern architecture for smaller banks," she said.
Ms. Grealish said the opportunity is especially strong with younger products, such as online banking software, which Postilion said it would integrate next.
As smaller banks compete for the same customers as larger banks, she said, "there is opportunity" for vendors "because small banks are becoming more vocal on what they want."
