Citi’s core migration

Feb 18th, 2010 | Posted by

FIS announced that Citi is going to be conducting a core migration and didn’t provide many details. I filled in some of the gaps in an article in American Banker.

For those of you who don’t subscribe to American Banker, This is a big deal with Citi moving their entire deposits from an internally developed legacy system to licensed software. Many of the people who developed this internal platform are no longer with Citi, so maintenance and changes are a challenge.

I am consistently surprised that banks that conduct a massive core migration are continuing to move to batch systems rather than move to real time systems. Please see the Celent report, Overcoming the Fear Factor: Migrating Core Banking Systems

Citi is moving to Systematics, the 30 plus year old mainframe, COBOL, CICS, batch system that runs at Bank of America, RBS Citizens, and lots of other large banks. If a bank is going to all the trouble of moving core systems, why not go all the way and move to real time, to say FIS Profile? To answer my not so rhetorical question, it will involve changes in item processing and increase risk, but there is certainly some reward to go with that. It’s much easier to have such an opinion when I’m not responsible for the conversion and change management.

American banks are clearly concerned about adopting the change that a real time system brings. Union Bank (formerly Union Bank of California) is moving to Infosys Finacle, which is a real time system. I eagerly await the results of this migration.

Will this start the long-awaited avalanche of core banking migrations? Not yet, but pressure is building. The Citi migration is not a game changer. The Union Bank migration may well be. The Canadians are quite active and there should be some announcements soon. I think that if Union Bank is able to out-innovate the competitors with their new real-time platform and reduce costs, the mass migration will start.

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  1. Kevin Lynch
    Feb 19th, 2010 at 10:35
    Reply | Quote | #1

    You make an excellent point. With the proliferation of electronic delivery to customers, they’ve come to expect real time information. Batch systems make that so much more difficult to do. Plus, with the increase in electronic access (debit cards, for example), managing in a batch envrionment becomes risky as well. Just doesn’t make sense to stay in a batch processing mode.

    • Bart Narter
      Nov 29th, 2012 at 16:44
      Reply | Quote | #2

      Most banks are living in a real-time world with batch systems. Debit cards present real time risk to the bank. Checks do not, but they are disappearing in the US.

  2. Alpaslan Menevse
    Mar 3rd, 2010 at 08:07
    Reply | Quote | #3

    I think compliance issues may also cause risk for batch systems, especially for the customer information traveling around which is not welcomed in latest EU regulations. Business continuity management may also impacted from the same situation.

    • Bart Narter
      Nov 29th, 2012 at 16:43
      Reply | Quote | #4

      Yes, there are some folks in the UK who would agree on business continuity issues.