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Wednesday, September 21, 2011

Die Hard: Homegrown Banking Software



Die Hard: Homegrown Banking Software

Banks That Rely On Homegrown Software Are Often More Satisfied With Their Technology Capabilities Than Are Vendor-Dependent Banks.


Boston, September 20, 2011 – A new report from Aite Group examines the current penetration of homegrown technology at banks, globally by region. Based on a Q1 2011 Aite Group survey of 80 large financial institutions across North America, the Asia-Pacific, and Europe and the Middle East, the report provides comparative satisfaction levels with homegrown technology solutions, and explains why homegrown solutions garner such high levels of satisfaction in certain areas while vendor solutions are preferred in others.

Some industry observers might find it difficult to believe, but homegrown software continues to be a favored technology option for some banks. In fact, about 16% of banks around the world continue to prefer building software in-house when they have the chance, and homegrown software receives a 65% net satisfaction balance compared with vendor software's 55%. Aite Group attributes this high rate of satisfaction at least in part to custom tailoring. Although homegrown solutions can be more difficult to maintain and upgrade, they may better fit the specific needs of the organization than an off-the-shelf vendor solution. Of course, satisfaction varies by solution type, and vendor solutions receive higher satisfaction marks in certain areas, such as anti-money laundering.

"The expansion of the IT services industry is one of the factors behind the resilience of homegrown software development," says Gwenn B├ęzard, research director with Aite Group and co-author of this report. "The development of a low-cost IT services industry over the past decade, in particular in India and some former Soviet Union countries, has made it easier for institutions to custom-build software at a competitive price."

This 22-page Impact Note contains 15 figures. Clients of Aite Group's Retail Banking and Wholesale Banking services can download the report by clicking on the icon to the right.