Reproduction or electronic forwardingof this daily report is a violation offederal copyright law.Site licenses and multicopy discounts are available. Please call our customer service team at 1-800-221-1809or email custserv@sourcemedia.com.For reprints or ePrints of individual articles, please contactJoylyn Yaw at 1-800-367-3989 orjoylyn.yaw@sourcemedia.com.October 2011americanbanker.com/ntech100A SUPPLEMENT TOTHE 8th ANNUAL FINTECH 100 RANKINGPROFILES OF THE TOP 10THE ENTERPRISE 25 RANKINGA CUSTOMER-FRIENDLY COREBBVA is deploying a new core banking system to process transactions in real time across all channels.pagc I6Sergio Fidalgo,CIO of BBVA Compass, is centralizing customer data and bringing in a CRM system that aims to put the customer frstQBHFContents9 Spotlight On thc Top IDWhat`s on the drawing boards oI the top I0 nancial services tech vendors? We spoke with their CLOs to nd out their plans Ior their companies and their ma|or products.Pcnny Crosman Lditor in ChieI, Bank Tcchnoloy NcwsPro|ect Lditor, IinTcch |00Ncil Wcinbcrg Lditor in ChieI, Amcrican BankcrDcbbic FogclSenior Director oI Lditorial Production and DesignHopc FitchGroup Art DirectorNcil Cassidy, Jill Cornicld, Patrick Knickcrbockcr Copy LditorsMichacl ChuPhoto LditorRichard Mclvillc Group Lditorial Director, Banking and Capital MarketsKarcn MasscySenior Analyst, Consumer Banking Tasnccm FcdcralAnalyst, Banking Jcannc CapachinResearch Vice President, Corporate Treasury and Spending GuidesMarc DcCastroResearch Manager, Consumer BankingAaron McPhcrsonPractice Director, Payments and Security Michacl VcrsaccResearch Director, Global RiskJosh BoylcSenior Account LxecutiveCynthia Ramscy Vice President, Group PublisherJohn DcCcsarc Group Publisher, New Lngland and MidAtlantic, 2I280386I0David Clcworth Advertising pro|ect manager, IinTcch|00Customer Service 80022II809custservegsourcemedia.comReprints: }oylyn Yaw 8003683989Published as supplement to Amcrican Bankcra SourceMedia publication One State Street Plaza, New York, NY I00042I28038200Public relations support provided by the William Mills AgencyOCTOBER 20112 Proting During a RcccssionDespite the di cult economy, technoloy rms in our rankings experienced an impressive I0% growth in revenue Irom nancial services.4 Thc Fintcch IDDOur annual list oI the top I00 technoloy vendors to the nancial services industry, ranked by 20I0 revenue.7 McthodoloyHow IDC Financial Insights and Amcrican Bankcr compile the FinTech I00 ranking and its companion list, The Lnterprise 25.8 Thc Entcrprisc 25The 25 largest horizontal vendors selling to the nancial services industry.I6 A CustomcrCcntric CorcTo strengthen customer relationships, BBVA is upgrading the core and CRM systems at its U.S. bank. 2D Thc Forccast for CloudsWhy private clouds are in and public cloud services are still a question mark.2I Good Timcs Ahcad for Risk TcchnoloyBanks will spend more on risk technoloy this year, in seven key categories.22 Qucstion All Mobilc Paymcnt PrcdictionsWhatever you think about mobile payments, you`re wrong.23 Quick Timc to Markct for Mobilc BankingHow a credit union deployed a new mobile banking solution in Iour months.24 IndcxFrank Martirc, Prcsidcnt and CEO, FIS AMERICANBANKER.COMAMERICAN BANKER | FINTECH 100 | OCTOBER 2011 1FinTech 100|Top OverviewAs I rst put ngers to keyboard Irom our oces in Massachusetts to present highlights and observations on this year`s FinTech I00 and Lnterprise 25, Hurricane Irene (aka Tropical Storm Irene) was bearing down on the Northeast. The news coverage was constant as meteorologists tried to pinpoint where the storm would hit and pro|ect how much damage it would cause. Most people Ielt they would be well prepared Ior the storm when it arrived, iI not overprepared.There is no weather Iorecast Ior nancial services. The global economy is at another tipping point. Lconomists are talking about the threat oI a doubledip recession as we continue to see real volatility in the global capital markets as well as governments and banking systems struggling. And through this uncertainty and turbulence, the FinTech community will persevere. Indeed some in our industry will even thrive. This is the eighth FinTech I00, and these leading technoloy providers have again increased their revenues Irom nancial institutions, to $58.I billion. That was up nearly I0% in a very dicult economy, versus an increase oI less than onehalI oI I% in 2009, to $53 billion. (The FinTech I00 posted a I0% increase in 2008 as well.)The minimum revenue needed to make the list in 20I0 dropped to $39 million, Irom $50 million in the previous Iew years. This speaks to the Iact that the large vendors continue to get larger as mergers and acquisitions picked up considerably in 20I0, and 20II is on pace Ior a good number oI acquisitions.FIS, with its late2009 acquisition oI Metavante, claims the top position on the FinTech Ior 20I0, with Fiservat No. 2 Ior only the second year. FIS was also No. I in 2007, beIore it spun o Lender Processing Services. It will likely remain No. I Ior the Ioreseeable Iuture, that is, until the next large acquisition.In 2009, we saw only two acquisitions among the FinTech: FIS bought Metavante and }ack Henry & Associates bought GoldleaI Financial Solutions. In 20I0 Iour FinTech I00 companies were sold: Temenos acquired the French core banking provider Viveo Group in }anuary, Pegasystems acquired Chordiant SoItware (Ior its CRM capabilities) in April, Wolters KluwerFinancial Services bought the regulatory reporting and risk management provider FRSGlobal oI Brussels in September, and Temenos struck again in October, acquiring Odyssey Financial Technologies to gain private banking and wealth management solutions. This year we welcome II newcomers: Wincor NixdorI(No. II), CoreLogic (No. I6), Aegis Global Communications (No. 5I), L&T InIotech (No. 54), ISGN Corp. (No. 68), Clear2Pay(No. 8I), Scorto Corp. (No. 9I), BancVue (No. 95), MultiIonds(No. 96), FNC (No. 98), and Novantas (No. I00). These additions are a result oI both the increased global awareness oI the FinTech I00 and individual companies` achieving the nancial services revenue required to secure a place on the list.In addition to the new entrants, ve companies should be noted Ior their steep climbs. Davis - Henderson|umped 23 spots, to No. 4I, LuxoIt |umped I8 spots, to No. 80, Online Resources |umped I4 spots, to No. 62, and NICL Actimize |umped I2 spots, to No. 7I. The Lnterprise 25, which historically has been quite stable, changed considerably in 20I0. In }anuary, Oracle acquired No. I2 Sun Microsystems. This made room Ior Teradata to |oin the list at No. 25. We saw the greatest movement in years on the Lnterprise 25 as Deloitte & Touche Tohmatsu went Irom No. 23 to No. I5, and Wipro |umped Iour places, to No. I6. IBM and HPheld on to the top spots with an expanding product lineup backed by a solid complement oI nancial services experts. There are more questions than answers as we approach 20I2. Will there be a doubledip recession? What can we expect Irom the regulators? When will innovation return? What will serve as new sources oI revenue? How can we Iurther reduce costs and improve eciency, while positively impacting the customer? What do we do with big data, cloud, mobile and risk management? We oer a Iew answers on the Iollowing pages. The rest is up to you. Karcn Masscy is scnior analyst, consumcr hanking, IDC Iinancial InsightsBold Moves Despite Uncertain TimesBy Karcn MasscyFinTech I00 companies' revenues lrom nancialinstitutions totaled more than $5S billion. That was up nearly I0% in a dicult economy.2 AMERICAN BANKER | FINTECH 100 | OCTOBER 2011 AMERICANBANKER.COMFinTech 100|Ranking13FIS Jacksonville, FL Public$5,270$4,426 84%21Fiserv Brookfeld, WI Public 4,133 3,926 9534Tata Consultancy Services Limited (TCS) Mumbai, India Public 7,805 3,456 4442SunGard Wayne, NJ Private4,9923,102 6255NCR Duluth, GA Public4,819 2,651 5568Diebold North Canton, OH Public2,824 2,552 9076Lender Processing Services Jacksonville, FL Public 2,456 2,334 9587First DataAtlanta, GA Private 10,380 2,281 2299Nomura Research Institute Tokyo, Japan Public3,5142,181 621011Infosys Limited Bangalore, India Public 5,641 2,031 3611NR Wincor NixdorfPaderborn, Germany Public 3,029 2,029 671213Cognizant Technology Solutions Teaneck, NJ Public 4,592 1,945 421310Total System Services (TSYS) Columbus, OH Public1,7181,716 1001412CA Technologies Islandia, NY Public 4,300 1,634 381514DST Systems Kansas City, MO Public2,3291,201 5216NR CoreLogic Santa Ana, CA Public 1,623 1,081 671717SAS Institute Cary, NC Private 2,430 1,021 421818Jack Henry & Associates Monett, MO Public921921 1001920Equifax Atlanta, GA Public 1,860 744 402019Oberthur Card Systems Nanterre, France Private 1,308 719 552122Broadridge Financial Solutions Lake Success, NY Public2,105 505 242229EDB Business Partner Oslo, Norway Public1,486490 332332Mphasis Bangalore, India Private1,114468 422415Experian Dublin, IrelandPublic4,130454 112533Temenos Geneva, Switzerland Public448 448 1002625IPC Systems Jersey City, NJ Private439 439 1002726 FICO Minneapolis, MN Public610 433 712830Murex Paris, France Private 415 415 1002923Itautec Sao Paulo, Brazil Private943 409 433031Fidessa London, UK Public407407 1003124Misys London, UK Public904396 443237Syntel Troy, MI Public 532 394 743327Open Solutions Glastonbury, CT Private393 393 1003434ACI Worldwide New York, NY Public418 372 893535Hypercom Scottsdale, AZ Public 469 351 753621Ingenico Neuilly-sur-Seine, FrancePublic1,212 339 283739SS&C Technologies Windsor, CT Public329329 1003843Polaris SoftwareChennai, India Public335315 943928CPM Braxis So Paulo, Brazil Private601313 524044Patni Computer Systems Mumbai, India Public713299 424164Davis + Henderson Toronto, Canada Public644286 444241Advent Software San Francisco, CA Public 284 284 1004338Harland Financial Solutions Lake Mary, FL Public283283 1004446Moodys Analytics New York, NY Public627 282 454540TransFirst Holdings Hauppauge, NY Private778272 3546363i Infotech* Mumbai, India Private569262 464742SimCorp A/S Copenhagen, Denmark Public248 248 1004845Wolters Kluwer Financial Services Minneapolis, MN Public247247 1004948GFT Technologies Stuttgart, Germany Public332 229 695047S1 Norcross, GA Public 209 209 100*3i Infotech sent revised data after the FinTech 100 rankings were calculated. Its total revenue for 2010 was $559 million; $386 million from fnancial services. Note: All rankings based on Financial Insights revenueestimates. American Banker/Bank Technology News/Financial Insights FinTech 100 (2011)Top I00 Companies in FinTechRANK CY 2010 REVENUE (MILLIONS)2011 2010 COMPANY NAME OWNERSHIP TOTAL FINANCIAL SERVICES % FS4 AMERICAN BANKER | FINTECH 100 | OCTOBER 2011 AMERICANBANKER.COMFinTech 100|Ranking51NR Aegis Global Communications Mumbai, India Private$595 $200 34%5251Ness Technologies Tel Aviv, Israel Public 572 194 345354GlobeOp Financial Services New York, NY Public 189 189 10054NR L&T Infotech Mumbai, India Private486189 395552Charles River Development Burlington, MA Private187187 1005660Headstrong Services Reston, VAPrivate 217 184 855749Linedata Services Neuilly-sur-Seine, FrancePublic182 182 1005865Collabera Morristown, N.J. Private 380 179 475950BancTec Irving, TX Private254178706055DealerTrack Holdings Lake Success, NY Public 244 171 706162Calypso Technology San Francisco, CA Private166 166 1006276Online Resources Chantilly, VAPublic150 147 986363Interactive DataBedford, MA Public 797 143186466Fundtech Jersey City, NJ Public142 142 1006559 Algorithmics Toronto, Canada Public135 135 1006669iGATE Global Solutions Bangalore, India Public281135 486756Pegasystems* Cambridge, MA Public337129 3868NR ISGN Bensalem, PAPrivate 129 129 1006967 ERI Bancaire Geneva, Switzerland Private127127 1007053Six Card Solutions Zurich, Switzerland Private200120 607183Nice Actimize New York, NY Public120120 1007271Hundsun Technologies Hangzhou, China Public131 113 867368Bravura Solutions Sydney, Australia Public 112 112 1007477 Open Link Financial Uniondale, NY Private236111 477570SmartStream London, UK Private109109 1007672Sophis Dublin, IrelandPrivate103 103 1007775 Viewpointe New York, NY Private100100 1007873Eagle Investment Systems Wellesley, MA Public 98 98 1007988Virtusa* Westborough, MA Public20898 478098Luxoft Moscow Private 189 96 5181NR Clear2Pay Mechelen, Belgium Private9090 1008279Callatay and Wouters Brussels, Belgium Public8989 1008391Bottomline Technologies Portsmouth, NH Public 168 88538478Hexaware Technologies Mumbai, India Public236 87 378580Odyssey Financial Technologies Lausanne, Switzerland Private85851008685Vasco Data Security International Chicago, IL Public10880 748792Celero Solutions Calgary, Canada Private 79 72 9188NRaurionPro Solutions Mumbai, India Public 73 70 968984Investment Technology New York, NY Public 571 69 129096COCC Avon, CT Private 66 66 10091NR Scorto Cupertino, CA Private87 64 749293Nucleus Software Exports Noida, India Public60 60 1009394FRS Global Brussels, Belgium Public5959 1009499Eze Castle Integration Boston, MA Private 61 599795NR BancVue Austin, TX Private5858 10096NR Multifonds LuxembourgPrivate 52 52 10097100Wausau Financial Systems Mosinee, WI Private 74 48 6598NR FNC OxfordPrivate 46 46 10099NRFinancial Technologies Mumbai, India Public 148 42 28 100NR Novantas New York, NY Private39 39100Top I00 Companies in FinTechRANK CY 2010 REVENUE (MILLIONS)2011 2010 COMPANY NAME OWNERSHIP TOTAL FINANCIAL SERVICES % FS*Data revisions received after the rankings were calculated: Pegasystems 2010 revenue $337 million, $202 million from fnancial services. Virtusas 2010 revenue $207 million, $110 million in fnancial services.Note: All rankings based on Financial Insights revenue estimates. American Banker/Bank Technology News/Financial Insights FinTech 100 (2011)6 AMERICAN BANKER | FINTECH 100 | OCTOBER 2011 AMERICANBANKER.COMFinTech 100 |MethodologyIDC FINANCIAL INSIGHTSrelied on a number oI sources to gather the data in the eighth edition oI the FinTech I00 and Lnterprise 25 rankings. First, the research rm, along with Amcrican Bankcr,Bank Tcchnoloy Ncws and William Mills Agency, requested nancial inIormation Irom thousands oI technoloy companies that serve the nancial services industry. Second, publicly available resources such as Hoovers, Ldgar and company lings and websites were used to validate and gather data. IDC Financial Insights also used proprietary resources. For all the companies, IDC Financial Insights determined eligible calendar year 20I0 revenue generated Irom sales oI soItware, hardware and IT services to nancial institutions. Not included are revenues Irom network, telecommunications, electronic exchanges, or data services providers. The rankings have two ma|or categories oI companies: FinTech I00: Financial technoloy companies that derive more than onethird oI their total global revenue Irom the nancial services industry Lnterprise 25: Horizontal technoloy rms selling products and services across multiple industries that derive less than onethird oI their revenues Irom nancial institutions Firms that derive revenue Irom excluded categories, but also have revenues tied to soItware, hardware or services, are considered. For those providers, the revenue attributed to excluded categories is used to qualiIy the provider to meet the onethird hurdle, yet only the qualiIying portion oI revenue is included in the ranking. That`s why vendors appear on the FinTech I00 list with nancial services revenues below 33%.We made a concerted eort to include all possible candidates. Some companies in qualiIying industries that submitted Iorms did not make the rankings because oI insucient revenue or inability to validate. For companies outside the U.S., we calculated U.S. dollar gures using IDC`s standard blended exchange rate Ior 20I0. How the Rankings Are CalculatedO 2O11 Ictol S,steu Serices, lrc. All rilts resered WcrldWide. IS\S is o lederoll, reistered serice uorl cl Ictol S,steu Serices, lrc.FaymenLs should revoIve around peopIe, noL Lhe oLher way around.At IS\S, We reccrite tlot belird eer, urclose is o erscr. Fcr Kote ord ler suoll busiress, it Wosr't just tle obilit, tc occet o,uerts - it Wos obcut iir ler custcuers odded seed, ellcierc, ord ccrerierce. Ilrculcut tle lost 25 ,eors, IS\S - o reuier lrorciol teclrclc, ccuor, - los sered os tle criticol lirl betWeer borls, bu,ers, sellers ord tleir dreous. 8, rcidir lrorciol irstituticrs cl oll sites Witl tle scluticrs tleir custcuers ord suoll busiress cWrers reed, We reirlcrce reloticrslis ot eer, stoe cl tle trorsocticr.8osed ir Ccluubus, Cecrio ord dcir busiress ir ucre tlor 85 ccurtries lcboll,, We rcide o,uert scluticrs tc lore lrorciol irstituticrs, ccuuurit, borls ord eer,cre ir betWeer, ircludir suoll busiress cWrers just lile Kote.Learn more about how !SYS has supported Kate at www.tsys.com/kateKate's dreamsKateGeL Lo know us. +1.888.74.785www.LsysmerchanLsoluLons.comAMERICANBANKER.COMAMERICAN BANKER | FINTECH 100 | OCTOBER 2011 711IBM Armonk, N.Y.Public $99,870 $29,291 29%22Hewlett-Packard Palo Alto, CA Public127,15813,987 1133Dell Round Rock, TX Public61,494 7,994 1344Fujitsu Tokyo, Japan Public49,355 6,910 1456Cisco Systems San Jose, CA Public42,3615,507 1365Microsoft Redmond, WAPublic66,6905,335 877Accenture Dublin Public23,091 5,177 22812Oracle Redwood Shores, CA Public 31,993 4,479 1498Hitachi Tokyo, Japan Public102,399 4,096 41010Intel Santa Clara, CA Public43,6233,926 91111Thomson Reuters New York, N.Y.Public 13,070 3,921 30129EMC Hopkinton, MA Public17,0153,743 221314CSC Falls Church, VAPublic16,1612,800 171415Capgemini Paris, France Public11,621 2,145 181523Deloitte & Touche Tohmatsu New York, N.Y.Private26,6001,968 71620Wipro Technologies Bangalore, India Public6,797 1,835 271717ATOS Origin Bezons, France Public6,7091,546 231819SAP Walldorf, Germany Public 16,654 1,414 81916*CGI Group Montreal, Canada Public 3,952 1,265 322021Siemens Munich, Germany Public104,3771,077 12116 Reed Elsevier London Public9,400954 102222Logica CMG Reading, UK Public 5,739 926 162318Unisys Blue Bell, PAPublic4,020884 222424HCL Technologies Noida, India Public3,091 774 2525NRTeradataDayton, OH Public1,936 542 28FinTech 100|RankingTop 25 Enterprise Companies in FinTechRANK CY 2010 REVENUE (MILLIONS)2011 2010 COMPANY NAME OWNERSHIP TOTAL FINANCIAL SERVICES % FSNote: All rankings based on Financial Insights revenue estimates. Companies that derive less than one-third of revenue from the fnancial services industry are listed in the FinTech 25 Enterprise ranking.*Ranking from FinTech 100 list American Banker/Bank Technology News/Financial Insights FinTech 100 (2011)Biggest MoversThese companies made large jumps up or down in our rankings in 2010. We provide clues as to whyPLACES RANKCLIMBED/DECLINED 2011 2010 WHYFinTech 100Davis + Henderson +23 4164Acquired a business processing outsourcing frm called Resolve in mid-2009Luxoft +18 8098Opened new development centers in the U.K. and Poland in 2010Online Resources +14 6276Grew its community bank user baseNice Actimize +12 7183Saw strong demand for its anti-fraud and anti-money-laundering softwareBancTec -9 5950Decrease in overall year-over-year revenueCPM Braxis-11 39 28Financial services revenue fell from 68%in 2009 to 52%in 2010Ingenico -15 36 21Financial services revenue dropped from 72%to 28%Six Card Solutions-17 70 53Decreased income from fnancial investments and a signifcantly weakened EuroEnterprise 25Deloitte & Touche Tohmatsu +8 15 23Financial services revenue rose from 4%to 7%Oracle +4 8 12The software giant grew its operating income 36%Wipro Technologies+4 16 2021%growth in its IT services business in 2010 and the frst quarter of 2011Reed Elsevier -5 21 16Income from fnancial services dropped from 17%to 10%Unisys -5 23 18Overall income decreased and drop in revenue from fnancial services8 AMERICAN BANKER | FINTECH 100 | OCTOBER 2011 AMERICANBANKER.COMGLOBAL GROWTH GIVES FISAN EDGEThinking globally has helped Fidelity National Information Services increase revenue in a moribund spending environment Ior nancial technoloy. While other U.S. core processing vendors remain rmly planted in the domestic market, FIS keeps expanding abroad through acquisitions, |oint ventures and a general Iocus on penetrating overseas markets. And although the }acksonville, Fla., company passed on an acquisition opportunity this year that would have added to its global client base, its executives say they remain Iocused on solidiIying its reputation as a diversied, international technoloy provider. You shouldn`t draw any conclusions as it relates to our M&A stratey, says Frank Martire, FIS` president and chieI executive, reIerring to the decision in August not to make a bid Ior Misys, a U.K. company.FIS` revenue rose more than 40% last year, to $5.3 billion. Revenue Irom nancial services grew more than 30%, to $4.4 billion, vaulting it to the top spot on this year`s FinTech I00 Irom No. 3 last year. Its 2009 acquisition oI Metavante Technologies Ior $4.2 billion was instrumental in FIS` growth. Buying Metavante gave FIS new or added capabilities in lines like cash management, electronic bill payment and card payments processing.Such large acquisitions oIten strangle product development and customer service, but FIS has avoided letting integration eorts stemming Irom the deal aect either department, says Christine Barry, a research director who covers core banking providers Ior Aite Group.Banks` spending on inIormation technoloy has slowly picked up during the last year and a halI aIter taking a nosedive during the nancial crisis. And though no one expects a huge spike in new spending next year, FIS is condent the current pace oI investment will continue, Martire says. The company is eager to Iurther leverage its acquisition oI the global technoloy consulting rm Capital Markets Co. NV, which it bought in December Ior $4II million.Capco consults with large banks on technoloy products. The ability to pair Capco`s advisory services with its technoloy products appealed to FIS. The goal is Ior FIS to pitch its soItware as a way to carry out recommendations Capco gives clients. Capco tends to work with the executive oI a nancial institution evaluating By Andrew Johnson1Core banking provider FIS increased revenue 40 percent last year, and hopes its Capco buy will maintain the momentuma particular need right beIore they really Iormulate what the solution to that need is, says Gary Norcross, an executive vice president and chieI operating ocer oI FIS. In August, Norcross said that, though FIS had not landed any signicant technoloy sales as a result oI consulting work Capco is doing, it was condent the stratey would bear Iruit.A risk in the Capco stratey Ior FIS is becoming too exposed to international markets under economic stress. FIS` revenue growth Irom Capco has come at the cost oI higher cyclical and discretionary spending by banks, TienTsin Huang, an analyst with }.P. Morgan Securities, wrote in an Aug. 24 research note to clients. David Koning, a senior analyst who Iollows nancial technoloy vendors Ior Robert W. Baird, says, They`ve made acquisitions that have had international components over the years. They have beachheads in other regions to grow core processing where some competitors don`t have scale. Bankers expect spending with their core processing vendors to increase 4% in 20II, according to Robert W. Baird`s midyear survey oI II4 nancial institutions. In Baird`s poll at the beginning oI the year, the FISHQ location: Jacksonville, FLNumber of employees: 32,000Frank Martire, President and CEOpro|ected increase was 3.7%. Norcross points out that FIS is trying to help its clients go aIter untapped markets, such as underbanked consumers. For example, it recently rolled out an electronic Iunding account product that banks can oer underbanked consumers. In December the company announced the availability oI mobile applications that a bank`s customers can enroll in using their debit card number. The apps prevent the need Ior customers to rst sign up Ior their bank`s online banking platIorm, which is a common requirement that most banks have Ior their mobile services. There are opportunities Ior FIS to raise its global prole some more.With the acquisition oI Metavante, FIS gained new capabilities Ior handling banks` cash management needs, Barry says. While the technoloy itselI is good, FIS hasn`t had a great deal oI success outside oI the U.S. selling the technoloy, Barry says. This product area is primed Ior investment. In an Aite Group global survey oI 80 nancial institutions in the rst quarter, 22% oI the institutions overall and about a third oI the Luropean ones said they were not satised with their cash management system.FinTech 100 |Top 10AMERICANBANKER.COMAMERICAN BANKER | FINTECH 100 | OCTOBER 2011 9Fiserv23TataHQ location: Brookeld, Wis.Number of employees: 20,000Jeffery Yabuki, CEOHQ location: Mumbai, IndiaNumber of employees: 202,039NG Subramaniam, PresidentFiserv is betting big on digitalpayments. The Brookeld, Wis., technoloy company took steps this past year to bolster capabilities in mobile banking as well as mobile and online persontoperson payments, products that generate a lot oI IanIare but have yet to result in signicant nancial gains Ior most banks.Fiserv`s growing list oI competitors includes Google, Apple, Amazon.com, PayPal and clearXchange, a |oint venture oI Wells Fargo, Bank oI America and }PMorgan Chase.Fiserv CLO and president }eery Yabuki doesn`t mince words over the promise oI mobile payments. There`s not a single nancial institution I talk to that hasn`t completely bought into the importance oI the mobile channel, Yabuki says. The challenge is, how do we prioritize the thousands oI things that each oI our clients want? That`s why I am so bullish on what mobile is going to cement Fiserv as the leading bankcentric provider oI PtoP tools, a market dominated by eBay`s PayPal subsidiary, traditionally viewed as a competitor to banks despite its recent eorts to oer its technoloy to nancial institutions.Fiserv began its PtoP push in mid20I0 with the rollout oI ZashPay, its online payment platIorm that about 870 nancial institutions had agreed to oer customers as oI }une 30.The revenue right now Irom all oI these innovation investments is . disproportionately small, based on the value that institutions are ascribing to those kinds oI initiatives, Yabuki says.While not quite a return to the heady years beIore 2005 when Fiserv had more than I25 acquisitions in about a 20year span, the company`s recent moves demonstrate it sees value in deals to create a strong product lineup, says Peter Heckmann, a senior research analyst with Avondale Partners in Leawood, Kan. Fiserv continues to look Ior ways to accelerate growth and nd new technologies, new channels, that they can then market to their existing base oI customers, Heckmann says.The stratey poses risks, though, notes Andrew }eIIrey, an analyst with SunTrust Robinson Humphrey in San Francisco. Some nextgeneration payments technoloy seems more like a solution looking Ior a problem, }erey wrote in a research note. Technoloy will be necessary Ior banks to meet their customers` demands, Yabuki says. Fiserv`s acquisitions will help it build a more converged system Ior end users oI the technoloy.Consumer expectations are moving exponentially ahead oI existing capabilities within most nancial institutions today, Yabuki says. -AnJrcw }ohnson be Ior us over the next ve to I0 years.Fiserv, which is No. 2 on this year`s FinTech I00, kicked o the year with three small acquisitions in March, including mobile banking soItware company Mobile Commerce, Ior a combined $49 million. The trio included a prepaid card company and a soItware hosting company Ior credit unions. It Iollowed those with the announcement in }une that it was buying CashLdge, a competing provider oI investment account and PtoP soItware, Ior $465 million. That acquisition hadn`t closed at press time.The CashLdge deal is not the type oI transaction that will transIorm Fiserv`s business like its 2007 acquisition oI CheckFree, an electronic billing and online banking company Ior which it paid $4.4 billion. That deal made Fiserv a powerhouse Ior billpayment and online banking technoloy. CashLdge could help Tata Consultancy Services is on a mission to help banks grow again.That`s a turn around Irom |ust a couple oI years ago, when the company earned its bread and butter helping banks digest the many mergers and acquisitions that they undertook or that were thrust upon them during the nancial crisis.But in 20I0 and 20II, TCS has Iound that banks are willing to spend again, especially on systems that will help them modernize and oer more customer engagement by smartphone, electronic tablet, the Internet and the cloud. The new regulatory environment poses additional challenges that create Iurther opportunities Ior TCS. The Mumbai, India, company, which earned the No. 3 spot in this year`s ranking, advanced Irom Iourth place in 20I0, and had total revenue oI $7.8 billion, 44% oI which comes Irom nancial services companies. core platIorms in 30 dierent countries. That in turn has meant increased eciency and deeper customer relationships Ior the bank as well as an ability to tackle markets quickly with relevant products, Subramaniam says. The TCS core system supports savings accounts, checking accounts, overdraIt accounts, term deposit accounts and a variety oI lending products including personal loans, corporate loans and mortgages, along with a Iull complement oI transactional services incorporating remittances, Ioreign exchange, draIts, banker`s checks, cards and trade nance. These capabilities are accessible through multiple channels, Irom branch to call center to mobile banking and Web. TCS also has a customer account application and tracking Ieature that lets customers begin an application in one channel and pick it up in another, without having to start over. TCS helped SLI Investments,which provides trading capabilities Ior more than 7,000 private banks, nancial advisors and institutional investors, develop a global wealth management platIorm that oers a unied suite oI products in I2 countries, 27 currencies and on 53 exchanges.TCS sees growth opportunities in the challenging regulatory environment. It has dedicated a work group to tracking the changes brought by the DoddFrank Act and the Durbin amendment. Among the challenges are new needs that require more transparency in operations as well as more complex risk management, security oversight and more internal reporting capabilities.As TCS looks to the next couple oI years, it plans to help banks implement technologies that are |ust now coming into their own, including mobile devices, tablets and the cloud. That means developing highly scalable platIorms that can help banks with the sudden increase in the number oI transactions and more complex security needs that such volume brings. - }crcmy QuittncrII you look at the latter part oI 20I0 and 20II, banks were Iocusing on growth and eciency together, says N. Ganapathy Subramaniam, the president oI TCS Financial Solutions, a unit oI TCS. During the nancial crisis, everyone was talking about eciency and belt tightening. Subramaniam says TCS Financial Solutions was busy decommissioning and recommissioning systems as well as migrating data Irom the old systems to the new.Today, TCS is all about helping its bank clients update and strengthen relationships with their customers.I am seeing with [TCS and] all [inIormation technoloy] service providers a Iocus on being able to tell a vertical story, and especially within banking to go even deeper with the processes they oer, says Madhavi Mantha, principal and head oI banking research at Novarica. In the past year, Ior example, TCS helped Deutsche Bank AG shiIt to the latest version oI the TCS core banking platIorm, replacing disparate FinTech 100|Top 1010 AMERICAN BANKER | FINTECH 100 | OCTOBER 2011 AMERICANBANKER.COMSunGard Data Systems has its work cut out in trying to get banks to spend on inIormation technoloy again.With Iewer resources to support business growth, IT departments are under pressure to make smarter use oI technoloy and keep costs down, while improving client service and protability, says Harold Finders, SunGard`s chieI executive. The Wayne, Pa., company`s 25,000 customers in seven countries include the largest nancial services rms. It provides soItware and processing solutions, as well as disaster recovery and business continuity products and consulting services, among other products.But this year, SunGard says it has seen the greatest demand Irom banks that need help navigating the postDoddFrank Act regulatory landscape. It has also amped up its core banking platIorm, Ambit, to help banks build more robust online banking capabilities, and to support the alwayson needs oImobile banking transactions. As more banks transition to the cloud Ior computing capacity and IT development, SunGard plans to oer products and services there too. Tectonic shiIts have taken place in the nance industry, driving changes in regulation, technoloy and management, Finders says.Though SunGard Iell to Iourth place Irom second place last year, experts say its expertise in core banking, treasury services and cash management are key product oerings that continue to set it apart in the nancial services industry, where it competes with the likes oI InIosys, Fiserv and SAS.In the past year, SunGard has also made upgrades to Ambit, including a service that helps banks track capital allocation, liquidity, and perIormance ad|usted Ior risk. It also introduced a customer management tool, which mines customer data in an attempt to deepen relationships by identiIying important moments in a customer`s liIe.For the rest oI 20II and 20I2, Finders says SunGard plans to add more mobile components to its core banking solution, enabling banks to meet the needs oI customers who require more alwayson connections to smartphones and electronic tablets. It also plans to beeI up its online banking solution to combine the older transactional capabilities oI online banking with newer things like personal nancial management.And it will upgrade its treasury management product while launching a mobile wealth management service later this year specically Ior the iPad. Finders says SunGard will spend the rest oI 20II continuing to develop its Innity soItwareasaservice platIorm Ior development, which helps banks map business processes and inIormation ows. The mission is to transIorm not only the way we create and deliver new soItware solutions but also the way in which we partner with our customers and partners to solve business problems, Finders says. -}crcmy QuittncrAsk NCR Corp.s chief executive Bill Nuti what his company`s biggest accomplishment in the past I2 months was, he`ll tell you Scalable Deposit Module. The technoloy, which allows multiple checks and cash to be deposited at once in the same ATM slot, is catching on at banks. Soon aIter the product`s rollout in October 20I0, Wells Fargoordered hundreds oI machines equipped with the module in branches nationwide. }PMorgan Chase also deployed the equipment, and several more topI0 retail banking companies were doing pilot tests or placing orders. No question, it is our biggest innovation oI the past several years, and one that will go down in history Ior our company as being one oI our best innovations, Nuti says.The ATM maker sees the module as a point oI dierentiation. NCR`s closest competitors, Diebold and Wincor NixdorI, oer envelopeIree deposit on their machines, Diebold doesn`t have the mixedmedia Ieature. But when customers come and see this, it`s denitely a `Whoa`Iactor product, Nuti says. It`s quite unique and the innovation that is underneath that module is very hard iI not impossible to replicate.The company plans to update its machines in light oI MasterCard`s decision to bring its LMV chip cards to the U.S. The move is meant to help mitigate Iraud. Fraud and guided selIservice are ma|or components oI NCR`s stratey, leading the rm to also move toward LMV compliant machines. Skimming causes average losses oI $50,000 per aected ATM and three times as much crime takes place using debit cards as credit cards, according to Aite Group. Diebold is also building LMVaccepting ATMs Ior international customers. LMV is the chip and PIN payment standard that`s popular in Lurope, but has been slow to catch on in the United States, based on the substantial cost oI migration Ior point oI sale terminals and other devices. However, many merchants are concerned that the U.S.` reluctance to embrace LMV will make it an isolated target Ior skimmers and other criminals. Some banks and nancial institutions have begun to oer LMV compliant cards Ior international travelers, a trend NCR is tapping into with its introduction oI LMVcompliant machine.Also, with an eye on the nocturnal, NCR has developed its Aptra Interactive Teller, which uses a builtin camera to connect any customer to a human bank representative at a distant location, even late at night. That teller has the ability to control the ATM remotely, helping users through complex transactions. In eect, a bank branch could be open 24 hours a day.This technoloy was developed in partnership with uGenius Technoloy oI Sandy, Utah, which provides video technoloy Ior nancial services in what it calls personal teller machines.The two companies have been talking Ior the past two years.Nuti says mixedmedia deposit is |ust a step along the way to Iurther developments. The Duluth, Ga., company is bullish on the notion oI merged channels, where when you visit the ATM your account inIormation is instantly updated across all bank communication outlets - mobile, Internet and branch. Our Iuture is really in helping our customers integrate all oI these bespoke channels and market across all oI those channels eectively, Nuti says. - Scan SpositoNCR45SungardHQ location: Wayne, Pa.Number of employees: 20,000Harold Finders, Chief ExecutiveHQ location: Duluth, Ga.Number of employees: 21,000 Bill Nuti, CEONCRs One-Slot ATM ...it is our biggest innovation in the past several years, and one that will go down in history Ior our company... -CLO Bill NutiFinTech 100|Top 10AMERICANBANKER.COMAMERICAN BANKER | FINTECH 100 | OCTOBER 2011 11FinTech 100|Top 10Diebold7LPSHQ location: Canton, OhioNumber of employees: 16,000 Thomas Swidarski, Chief ExecutiveHQ location: Jacksonville, FLNumber of employees: 8,700 Dan Scheuble, COORegulatory First AidThere is tremendous pressure on our customers to comply with the new regulations and to prepare themselves Ior the Iuture. - COO Dan ScheubleDiebold is making subtle, but big, moves in its technoloy and business. It`s concentrating on the wires and networks, the guts that make ATMs work.The North Canton, Ohio, company is hoping to create predictive models Ior automated teller machine operators that will allow them to predict which machines on their roster will Iail next. To that end, Diebold has already unveiled OpteView Resolve, a ma|or play in the ATM innovation battle toward oering remote access maintenance and analysis Ior repair, updating and troubleshooting. The system diagnoses the machines and allows the bank to repair them remotely, avoiding excessive downtime and saving the cost and time oI having a maintenance worker service the machines.The initial launch oI the soItware was in March. II I had to pick one single thing, it would be OpteView Resolve, says Thomas W. Swidarski, Diebold`s chieI ing security Ior mobileenabled ATM innovation. The technoloy, called card lock, is part oI Diebold`s MobiTransact mobile banking platIorm. Basically, it`s a mobile application to allow you to manage your card Irom your mobile device, he says. In other words, turn your card on and o to address and combat Iraud. The security system, which the tech rm says one bank is testing, has the potential to make stolen card data less valuable, since a card would work Ior payments or cash withdrawals only when the legitimate customer permits it to-a crook that stole a card or a dishonest person who Iound a lost card would have less ability to use that card Ior theIt or to make Iraudulent transactions. The level oI protection is also userdriven. Consumers would have the exibility to keep a card switched o at almost all times - or to lock it only in highrisk situations, such as when it has been misplaced. Diebold would not say which bank is testing card lock, which it provides through mobile browsers or text messages. The company plans to ocially launch card lock later this year. - Scan Spositoexecutive, oI his company`s biggest innovation oI the year. We have received pretty big kudos in the marketplace Ior this platIorm. Diebold is also adopting emerging costcutting technoloy architectures. The vendor is using what it reIers to as cloud computing technoloy to centralize its ATMs` computing power, thereby improving security and Iurther cutting ATM maintenance costs Ior clients.The virtualization technoloy uses the principles oI cloud computing: Instead oI having individual hard drives, each ATM in a eet is operated by a remote data center and all changes, upgrades and patches are handled centrally.Swidarski also hints at the Iuture Ior his rm`s tech eorts-a mobile switch Ior consumers` debit cards that takes advantage oI consumers` increasing comIort with using mobile devices Ior all manner oI commerce, as well as providIts been a rocky 18 months for Lender Processing Services.In summer 20I0, regulators began investigating whether LPS and its Iormer parent, Fidelity National Financial, had Iorged documents to help mortgage servicers expedite Ioreclosures. In the ensuing months, the scrutiny grew to include a number oI LPS`s large lender clients. The resulting robosigning scandal |olted mortgage nance and briey brought much oI the nation`s pending Ioreclosure activity to a screeching halt.As the regulatory noose tightened last spring, LPS was one oI two technoloy providers that, along with the nation`s I2 largest mortgage servicers, submitted to a multiagency review and subsequent consent order that requires the company to conduct external and internal reviews oI its policies, procedures and risk management processes.These actions address signicant compliance Iailures and in existence.While a committee searches Ior Carbiener`s replacement, Scheuble and CFO Tom Schilling continue to lead various components oI LPS and are assisting interim CLO Lee Kennedy in running the company. Kennedy is LPS board chairman and has also served as CLO oI the company`s Iormer parent, Fidelity National InIormation Services.And there`s even a silver lining in the consent order. It`s a tremendous opportunity Ior LPS to extend its reach into mortgage lender}servicer operations, Scheuble says.There is tremendous pressure on our customers to comply with the new regulations and to prepare themselves Ior the Iuture, he says. The one thing that`s absolutely, positively Ior sure is that the only way servicers are going to meet their obligations and comply is with the application oI new technoloy. We believe LPS is very well positioned to create these new technologies. And in Iact, we`re already developing these systems, which is going to lead to new revenue streams in the Iuture.LPS is both a technoloy developer and a mortgage services provider in the origination, servicing and data and analytics sectors. Its agship soItware, Mortgage Servicing Package, is the system oI record Ior more than halI oI all mortgage servicing unsaIe and unsound practices at LPS and its subsidiaries, the Federal Reserve said. The action requires LPS to address decient practices related primarily to the document execution services that LPS, through its subsidiaries DocX LLC, and LPS DeIault Solutions Inc., provided to servicers in connection with Ioreclosures.Then, as LPS began the process oI meeting the consent order requirements, president and CLO }erey Carbiener abruptly resigned to address what the company has only called signicant healthrelated reasons.Despite these challenges, COO Dan Scheuble says the Iuture is bright Ior the }acksonville, Fla., company. AIter all, 20I0 wasn`t all bad Ior LPS. For the year the company posted net earnings oI $302.3 million - up 9.6% Irom 2009 - o total revenue oI $2.5 billion, up 3.6%. In addition, the document execution subsidiary that was at the center oI the investigations is no longer 6Card Security from a PhoneOne oI Diebold`s latest innovations, card lock, is part oI its mobile banking platIorm. It`s a mobile application to allow you to turn your card on and o to address and combat Iraud. -ChieI Lxecutive Thomas Swidarski 12 AMERICAN BANKER | FINTECH 100 | OCTOBER 2011 AMERICANBANKER.COMcompanies in the U.S.Technoloy is our DNA, but we also oer services that take advantage oI that technoloy, Scheuble says. II we`re into something, it`s because we believe we have a superior technoloy and we`re out to prove it in the marketplace.LPS made a strong push this year to expand its technoloy and services oerings to small and midsize lenders with the acquisition oI PCLender, a mortgage loan origination system that`s complementary to its enterpriseclass Lmpower loan origination system used by large lenders. Regardless oI the customer, LPS uses both origination platIorms to sell additional addon products and services to support lenders.We believe that as we get our technoloy into those environments, that can be a platIorm to sell other products and services that we have to those institutions, Scheuble says. You`ll see us increasingly putting together a suite oI services and approaching and attacking that market that way, both on the servicing and origination sides.For the rst halI oI 20II, LPS posted net earnings oI $77.3 million, down 49%, o net revenue oI nearly $I.I billion, down 9%. The decline was in part the result oI continued delays in the Ioreclosure process and an elongated deIault time line. But eventually that inventory will have to be dealt with - and that will be another opportunity Ior LPS to oer its technoloy to mortgage servicers who need to catch up, Scheuble says. No matter what the disposition is, a Ioreclosure, loss mitigation or short sale, we have products and services that benet, he says. Short term, Ioreclosure activity slowdowns do impact our revenues Irom a deIault services perspective. But Irom a technoloy perspective, it`s all been positive.-Austin KilgorcFinTech 100|Top 10Rising To a New Levelwww.americanbanker.com/conferences/sbb| 212.803.8348SMALLBUSI NESSBANKINGCONFERENCE16TH ANNUALNovember 9-11, 2011Talking Stick ResortScottsdale, AZP R E S E N TPre-Conference Workshop A: What Small Businesses Want From Their BanksA European View And Case StudyJohn Davis, Managing Director, BCSGPre-Conference Workshop B: Small Business Lending Industry TrendsDrew Nathan, SVP, EQUIFAX COMMERCIAL INFORMATION SOLUTIONSWEDNESDAY, NOVEMBER 9, 2011Small Business Owner Panel: New Customer Expectations for Needs-Based Selling Larry Baily, Principal, GREENWICH ASSOCIATES with a panel of small business owners Keynote Address: The Role of Payment Options in Shaping Small Business BankingEdward Glassman, Group Executive, Global Commercial Products, MASTERCARD WORLDWIDEKeynote Address: The Future of Small Business BankingRichard C. Hartnack, Vice Chairman, Consumer and Small Business BankingU.S. BANCORPOver the TopCreating Connections between Business Banking and Wealth Management Julia C. Wellborn, EVP, Executive Director for Wealth & Institutional Management (WIM), COMERICA BANKOne Step At A TimeBoosting and Sustaining Small Business Growth Lynetta Tipton Steed, EVP, Business and Community Banking, REGIONS BANKTaking Small Business Performance Up a Level Moderator: Les Dinkin, Partner and Business Banking Practice Leader, NOVANTAS, LLCPanelists: Donna Driscoll, SVP, CMO - Wholesale Marketing, SUNTRUST BANKSam Guerreri, SVP, Retail Banking, M&T BANKKent Stone, EVP, Strategic Support Services, Consumer and Small Business, US BANKTHURSDAY, NOVEMBER 10, 2011CONCURRENT SESSI ONSSALES & CHANNELS TRACK MARKETING & PRODUCT TRACK FINANCIAL SMALL BUSINESS TRACKI Chalk the Line Sales Models, Sales Channels, and Who Goes Where John Barlow, President, BARLOW RESEARCH ASSOCIATESChristy Schmitt, SVP, BANK OF THE WESTKamal Rajan, SVP, Market Analytics, Business BankingWELLS FARGOChris Ward, EVP, Small Business Banking Segment, BBVA COMPASSWhen Rubber Meets Road: Improving Small Business Traction in the Branches Mary C. Bintz, Small Business Sales Executive, BANK OF AMERICAJay DesMarteau, Head of Small Business DistributionTD BANKTodd Hollander, EVP, Business Banking Group, UNION BANK,At the Top End of the Street: Wealth Management and Afuent Small Business Owners Mark Luppi, EVP, Business Banking, HSBCLuAnne Kingston, SVP, National Premier Executive, HSBCBest Practices in Engaging Small Businesses Online Stu Richards, CEO, BREDIN BUSINESS INFORMATION, INC.Richard Weeks, SVP, Internet Services Group, WELLS FARGOAudrey Hendley, VP of Marketing & Strategic PartnershipsAMERICAN EXPRESS OPENBeam Me Up: Small Business in the Mobile Space Jim Gifas, EVP, Head of Global Transaction Services US, RBS CITIZENSTreasury Management for Small Business Colleen Taylor, EVP, Head of Treasury Management & Merchant Services, CAPITAL ONE BANKJoe Chasteen, EVP, Business Banking Treasury ManagementPNC BANKMike Toth, SVP, Director of Strategy Implementation and Integration, Business Banking, KEY BANKBeyond Great Service and Location: Dening And Sustaining Small Business Identity, Value Proposition, And Differentiation Maria Tedesco, Group EVP, Executive Director, Business Banking, CITIZENS BANKDawn Morris, SVP, Director, Business Banking MarketingCITIZENS FINANCIALGetting Out of Our Own Way: Why Cant Banks Deliver What Small Businesses Want? Pete Appello, EVP of Small Business Banking, CAPITAL ONECharles Wendel, CEO, FIC, INC.The Economic Recovery and Changing Landscape of the U.S. Small Business Economy William H. Phelan, President, PAYNET, INC.Adapting Small Business Lending Strategies to Recognize Post-recession Quality Prospects Neil F. Murray, Director of Credit Strategy & Policy, RBS CITIZENS BANK NARick Buczynski, PhD., SVP/Chief Economist, IBISWORLD, INC.Next Generation SMB Lending-Predicting and Managing Risk Using Daily SMB Revenue DataowsIan Drysdale, SVP, Product and Business DevelopmentWORLDPAY US, INC.Mark Lorimer, CMO, CAPITAL ACCESS NETWORK.COMEffective Loss Mitigation Efforts to Retain Viable Small Business Customers Tom Palen, VP and Manager, WELLS FARGO BANKMike Waltz, SVP,Special Loan Group, ASSOCIATED BANKSmall Business Executive Panel Jack Murphy, EVP, Head of SME Banking, Director of Small Business and Business BankingSOVEREIGNJohn Durrant, EVP, Head of Small Business and Business Banking Segments, CAPITAL ONE BANKKeynote Address: Stairway to Sales Heaven: Moving from Strategy to Results Bill Holt, EVP, Business Banking, SUNTRUST BANKS, INC.Selling the Brand Inside and Outside Darcy Steber, SVP and Marketing Group Manager for Business Banking and Commercial Banking, PNC BANKFollow the Money Peter Carroll, Partner, OLIVER WYMANFRI DAY, NOVEMBER 11, 2011CONFERENCE AGENDAwwwamericanbanker com/conferePeFor sponsorship opportunities, please contact Adam Dadich at 212.803.6089 or adam.dadich@sourcemedia.com.AMERICANBANKER.COMAMERICAN BANKER | FINTECH 100 | OCTOBER 2011 13FinTech 100|Top 10First DataHQ location: AtlantaNumber of employees: 24,500Jonathan Judge, CEO9NRIHQ location: TokyoNumber of employees: 8,000Shin Kusunoki, Manager, nancial and assset managementDespite First Datas size and diversity - it handles payments Ior six million merchant locations and several thousand credit card issuers, its STAR network runs 20% oI PIN debit transactions, it provides payroll processing and check verication, it`s the largest merchant acquirer in the U.S. and a distributor oI merchant terminals - First Data moved nimbly into mobile payments this year, teaming up with Google,Citigroup and MasterCard to create Google Wallet. In Iact, First Data`s participation could well be the secret sauce that catapults Google`s mobile payment oer ahead oI competing models Irom the telecom consortium Isis, PayPal and others.What First Data brings to the Google Wallet team is access to a wellestablished back oce that processes high volumes oI credit and debit transactions in the U.S. The company is used to storing card account data and provisioning cards to cardholders, so its new role in processing two ways: it has increased the capacity oI its STAR network to take on higher volumes (as banks are Iorced to expand beyond their exclusive relationships with debit networks), and it has developed routing capability that lets merchants choose the cheapest transaction path. When Durbin was announced, it was pretty clear to us that when the dust settled, all banks would be required to have a second network where prioritized routing would be important, }udge says. }udge also sees opportunity in prepaid cards. [Prepaid]`s now evolved into paperless payroll. A lot oI companies are interested in trying to get out oI the paper part oI the payroll business. And merchants, }udge says, are using analytic tools First Data rolled out this year that help them understand the sales Ior each store, spot weaknesses and use a prepaid card mailing to drive consumers to the store. - Pcnny Crosmanmobile payment transactions and provisioning cardholder credentials, account data and transaction data Ior Google Wallet is not a stretch. All the payment action is the same as it was beIore mobile, ChieI Lxecutive }onathan }udge says. The dierence is, you`re not going to take out a credit card and give it to somebody, you |ust tap your phone and you`re done. What happens Irom that point Iorward, we take care oI |ust as we`ve always done.Another opportunity First Data seized this year was created by the Durbin amendment to the DoddFrank bill, which limits the Iees banks can charge merchants on debit card transactions. Under Durbin rules issued by the Fed in }une, each card issuer must participate in two unaliated debit networks by April 20I2. As oI Oct. I, merchants can control the routing oI debit card transactions to the lowestcost network. First Data has prepared Ior these changes in Nomura Research Institutes cloud-based Internet banking service has drawn only a handIul oI tirekickers in its rst Iew weeks, but executives oI the outsourcer and consultant say they`re condent the service will have plenty oI takers. We expect this to be a key solution Ior our company and Ior the }apanese banking industry, says Shin Kusunoki, manager oI the nancial and asset management solution division Ior NRI, which gets about 70% oI its revenue Irom nancial services clients. The Tokyo rm, which does business with more than I00 banks in }apan, posted $4.2 billion in sales Ior scal 20I0, which ended in March.Kusunoki says a couple oI banks have expressed an interest in cloudenabled Web banking, which the rm completed work on in the past year. He says he`s condent there will be wide adoption, given the ability oI cloud computing to help ease the budget challenges Iaced by }apanbased banks. NRI has competition in oering cloud computing in }apan: IBM is developing cloud computing Ior such as nancial reporting. While most oI NRI`s business has been in }apan, it has oces in New York, London, Shanghai, Bei|ing, Hong Kong and Singapore. It is seeking tech partnerships to enlarge its nancial BPO Iootprint in international markets. Analysts say NRI is picking the right time to expand abroad in outsourcing. BPO right now is on the uptick, says Adam Honore, research director oI the institutional securities practice at Aite Group. Banks are trying to get rid oI all the plumbing. They have these huge inIrastructures, and multiple copies oI the same code. So outsourcing has become popular. It`s an easy win Irom a cost perspective.NRI was aected by the March earthquake in }apan, which caused ATM and other service outages throughout the country. NRI is developing a stratey to soIten the systems impact oI Iuture disasters through data backups other measures. It participated in the reconstruction oI transportation centers and deployed backup generators to ensure its clients could access data. - }ohn AJamsbanks, signing local institutions such as Sugamo Shinkin Bank to use its cloudbased virtual workstations. The cloud can support other nancial products. And there is an appetite Ior a cloudbased solution in }apan, Kusunoki says.NRI oers consulting, outsourcing, IT solutions and IT platIorms. It also oers compliance consulting. Clients oI NRI, which is the largest bank IT consultant in }apan, have traditionally been }apanese asset management rms, though it has done work Ior the }apanese subsidiaries oI }PMorgan Chase, Goldman Sachs and other Western institutions. The rm competes with }apanese consultants and BPO rms such as Mitsubishi Research Institute, Mizuho Research Institute and }apan Research Institute and with Western rms such as Accenture, McKinsey & Co., Boston Consulting Group and IBM. It recently expanded its business process outsourcing operations beyond its asset management IT sweet spot, broadening its nancial services IT oerings Ior the back oce, 8Wema Bank is not high on the international banking radar. But the Nigerian bank`s hiring oI InIosys this summer to develop a new multichannel IT inIrastructure to enable Iaster product delivery, digital banking and transaction consistency is the perIect example oI how the tech company is digging deep into its tech bench to weather a tough market.For Lagosbased Wema, InIosys will deploy its Finacle core banking, ebanking and treasury solutions. The bank hopes these products will allow it to improve customer experience through personalized oers, bundled products and segmentation. Since that requires a tech deployment that integrates all channels and centralizes data management Ior all business lines, it`s a score Ior InIosys as the entire Indiabased tech outsourcer market hits a rough patch. InIosys` sales Ior the year are expected to be about $7.3 billion. That`s substantial, but it`s less than the $7.5 billion pro|ected by the analyst community. That`s pressured the stock prices oI not only InIosys, but rivals such as Wipro and Tata Consultancy, as the companies ght Ior deals among a client base that`s reluctant to take on new contracts because oI larger economic uncertainties. Outsourcing deals will be harder to come by, and will require a pitch that`s heavy on innovation, costcutting and revenue generation.For a nancial institution to get back to acceptable perIormance to shareholders, they need to expand marketing when introducing new products, and to be more innovative, says Mohit }oshi, vice president and member oI the 10InfosysHQ location: BangaloreNumber of employees: 133,500Mohit Joshi, VP14 AMERICAN BANKER | FINTECH 100 | OCTOBER 2011 AMERICANBANKER.COMexecutive council Ior the nancial services and insurance practice at Bangalorebased InIosys. Multichannel and mobility are large initiatives that will accomplish that. From signing up new accounts online to the contact center, the multiplechannel experience is very important Ior a bank when looking at [generating] revenue.InIosys - the second largest Indian tech company, with more than I33,000 employees - is also aggressively pushing new channels and innovation such as mobile banking and tablets. For example, InIosys signed a $30 million deal with ANZ in late August to provide myriad mobile services. The deal will give the Australian bank`s customers access to realtime account balances, Iaster account processing and an expanded range oI products and services including electronic options and debit cards.To tap the trend toward mobile banking adoption, InIosys has set up what it calls mobile centers oI excellence, which in the coming months will Iocus on expanding mobile nancial services globally.InIosys, which traces its roots to I98I, is additionally working on signing outsourcing contracts to deliver other IT services such as risk, customer relationship management, Web banking, data management and crosschannel integration, in addition to the new digital channels. A huge amount oI [inIo] actually drops o in the hando between channels, we are working to make these handos smooth, }oshi says. Beyond CRM and channel development, InIosys is also Iocusing heavily on compliance, including DoddFrank and other new laws that are on the books or in development in other countries. We want to reduce the risks that banks have on their balance sheets, }oshi says, adding the company has also reorganized its banking, capital markets and insurance practices into a single global nancial services division. (Financial services is more than onethird oI InIosys` overall business.) We did that to tighten the Iocus on nancial services. - }ohn AJamsFinTech 100|Top 10AMERICANBANKER.COMAMERICAN BANKER | FINTECH 100 | OCTOBER 2011 15BY PLNNY CROSMAN PHOTOGRAPHLR TRLY CLARKFinTech 100|Cover StorySergio Fidalgo, chieI inIormation ocer oI BBVA Compass, is deploying a new core, realtime transactions across all channels and a new CRM system to support longterm customer relationships, instead oI oneo product sales at the bank. Although he`s too polite to come out and say it directly, a theme that emerges when Fidalgo talks about the core banking overhaul he is overseeing is that Luropean banks tend to take a more careIul and customerconscious approach to technoloy than those in the U.S. The point oI this huge pro|ect, an upgrade oI all Ioundational technoloy at the $62.7 billionasset BBVA Compass, is to build longstanding customer relationships - the rened Luropean way - rather than to innovate on and sell individual products, the American way. BBVA BRINGS AREAL-TIME CORE TO THE U.S.The Madrid banking giant has brought the modern, real-time core processing technology it uses in its Latin American subsidiaries to Alabama and is modifying it to handle U.S. regulations and products16 AMERICAN BANKER | FINTECH 100 | OCTOBER 2011 AMERICANBANKER.COMAMERICANBANKER.COMAMERICAN BANKER | FINTECH 100 | OCTOBER 2011 17BBVA, oI Madrid, bought Compass, in Birmingham, Ala., in 2007. The parent company is gradually shiIting the bank Irom being productoriented, with one head oI deposits and one head oI consumer assets, to a management divided by customer segments - there`s now a consumer group and a smallbusiness segment. One level below are the product specialists. This is a clear sign oI trying to move the organization Irom, instead oI bringing the product to people, guring out what customers need, and then Irom that answer, working on delivering products, Fidalgo says. To make the bank`s technoloy inIrastructure match its customer relationship vision, BBVA is migrating the bank to a new core system, Accenture`s Alnova, and deploying a new customer relationship management system created by BBVA Group. We`re breaking the silos we have, not only the product silos but also the line oI business silos, Fidalgo says. BeIore, each division had its own CRM database, the new CRM system being imported Irom the central BBVA group will be a single storehouse Ior customer data Ior retail banking, wealth management and commercial banking. This will ease a lot oI the dialogue between lines oI business, he says. The CRM soItware is up and running Ior retail and wealth management. The bank is still modiIying the commercial portion, which is expected to be ready in the second quarter oI 20I2. We`re working to provide employees with that Iull view oI the customer portIolio, Fidalgo says. We`ll be working in the Iuture on reIerral systems between these lines oI business.The Alnova system has one central customer inIormation le that will store basic inIormation Irom customers (even commercial customers), such as name, address, Social Security number and phone in one place, which Fidalgo reIers to as a golden le. The conversion Irom a Iragmented architecture to a single CIF was somewhat challenging, Fidalgo notes. You have to clean the data, and you have to make sure you`re populating the database with the right data that you might have had in six dierent places, he observes. But we`re already working actively on that conversion. The cleaning oI the data is being done as we speak.The customer data is replicated between current and new systems, so that all will be ready when the bank goes live with deposits on the new system. This will be rolled out state by state. This is something we`re planning very careIully, Fidalgo says.A Phascd ApproachThe bank has broken down the pro|ect into three releases. First is an inIrastructure}architecture release. It`s not a business release, it`s not something we put in branches, it`s something we have yet to give to our operations people, but it`s a Ioundation Ior the rest oI the modules that are going to be sitting on top oI it, Fidalgo explains. The architecture and the customer inIormation le went live at the end oI May. That was a big step. It doesn`t really impact the business, but it`s absolutely critical to be able to put the rest oI the modules in place.The next release is Ior deposits, including checking accounts, savings accounts and CDs. The bank is still testing this part oI the system. An integration test has already been done. Next to be tested areperIormance and user acceptance. It`s a complex pro|ect, we have people working all over the world, we have 20houraday support Ior the development and testing Irom Bei|ing, Manila, India, Madrid and Mexico, Fidalgo explains.This attention to testing is somewhat unusual and may be the key to the success oI this pro|ect. You have to test everything, not only your mainIrame and backend operations, but also your branch, call centers, ATMs, Internet banking and mobile banking, Fidalgo says. The goal is to avoid any disruption in customer care due to the conversion.Their approach is very measured in terms oI approaching this step by step, which allows them to be more diligent and to Iocus more on customers as they go through the process, says Wayne Busch, managing director oI nancial services at Accenture. In the rst quarter, the bank will take the deposit system live in pilot branches, to nd and clean any issues that arise. Then it will start a pro|ect rollout throughout its Iootprint in the U.S., state by state. That will take about six months, with Iull rollout expected within the year. The bank has 7I6 branches in Alabama, Arizona, CaliIornia, Colorado, Florida, New Mexico and Texas.Release two will involve consumer loans. We`re in the middle oI the build phase at this moment, Fidalgo says. At the end oI October, the bank will start integration tests, then move on to the perIormance and user acceptance tests. The plan is to go live at the end oI the third or Iourth quarter oI 20I2.Rcgulatory HurdlcsThis is the rst implementation oI Alnova in the U.S., and Fidalgo`s team is adapting the soItware, which BBVA has already put in place in Mexico, Puerto Rico and other Latin American subsidiaries, to comply with U.S. regulations. That`s big, Fidalgo says. In the U.S., regulations are getting tougher, so this is where we are putting a lot oI Iocus. Indeed, other large core banking pro|ects have Iailed because oI the diculty oI making Ioreignbuilt soItware compliant with U.S. rules.The soItware also has to be ad|usted to accommodate products unique to the U.S., such as mortgages, mortgage securities and mortgage servicing. Alongside the core and CRM conversions, BBVA Compass is developing an online banking platIorm with an improved user experience and more robust Ieatures. It plans to have an online banking pilot test by the end oI the year, and a rollout in 20I2. We are dening what the rollout is going to be, Fidalgo says. We have to make sure we design this rollout Ior the Internet channel side and also the core banking side so that both plans align and there`s no customer disruption. As Ior mobile banking, BBVA Compass has apps Ior the iPhone, Android, iPad, BlackBerry and Playbook. It will modiIy these applications so they work with the new core banking system. Among some large and regional U.S. bank CIOs, there`s a lot oI concern and Iear about core conversions. They look at a Iew recent pro|ects where banks have tried to do core overhauls and either crashed and burned or gone way over budget and past deadline.Fidalgo is aware oI these concerns. We`re doing this because we`re I00% sure it`s the right thing to do to help change our business model, he says. We think it`s perIectly aligned with the business. But we know this is not riskIree. So we allow that the core banking is a challenging opportunity, but we think it`s worth the eort.He points out that his parent company has the expertise to leverage Irom the core conversions it`s done in other countries, so that it`s already brought realtime We're working to provide employees with that lull view ol the customer portlolio," Fidalgo says. We'll be working in the luture on relerral systems between these lines ol business."FinTech 100|Cover Story18 AMERICAN BANKER | FINTECH 100 | OCTOBER 2011 AMERICANBANKER.COMtransaction posting to all its U.S. banks except Compass. We`re conscious oI the challenges, we`re conscious oI the risks, but I think we`re putting everything in place to navigate those risks, Fidalgo says. I Ieel condent that we`re on the right track, that we`re able to make advances. This will be the best Ioundation Ior going to a real customercentric model, which is the aspiration oI BBVA in the U.S. The biggest challenge has been moving the bank Irom the batchprocessing and memoposting technoloy commonly used in the U.S. to realtime posting. In the analysisanddesign phase, we had to invest more time than expected in those discussions, because the impact on the back oce oI the bank is huge, Fidalgo says. The way this works today, iI something happens in the branch, the process continues in the back oce. It`s a twophase process. With the new core banking system there`s going to be a single process, there will be one click in the branch or on the Internet, and two seconds later the process is nished. That changes the way people in the branches and operations work. In a related pro|ect, the bank is installing check scanners and imaging soItware at the teller line and migrating to check truncation at the point oI deposit. That will improve the customer experience. You can check a mistake or note that the check is unreadable while the customer is sitting in Iront oI you, you don`t have to call him two days later and ad|ust whatever mistake has been made. He also expects operational eciencies Irom the use oI the teller technoloy. BBVA Compass was completing the rollout oI this technoloy at the end oI September. Part oI innovation is continuous investment in technoloy. We`ll keep improving this core banking platIorm Iar down the road, Fidalgo says. FinTech 100 |Cover StoryBAI would like to congratulatethe FinTech 100 and the Top 25 Enterprise Companies!Broaden Your Retail Banking Perspectives with BAI Retail Delivery Global ConnectBAI Retail Delivery Global Connect will keep you current on critical nancial services industry issues throughout the year with: Executive views on the industry from retail banking leaders from around the world BAl thought leadership articles on today's most critical trends and issues Daily global news and company announcements that are relevant to our industry Latest news and updates on BAl Retail Delivery 2012 Stay in the know with BAI Retail Delivery Global Connect, brought to you by BAI Banking Strategies and Finextra.www.baiglobalconnect.comSEE YOU NEXT YEAR!BAI Retail Delivery 2012October 9-11Washington, D.C.AMERICANBANKER.COMAMERICAN BANKER | FINTECH 100 | OCTOBER 2011 19FinTech 100|Cloud ComputingBanks, especially the largest ones, never want to be leIt behind, and that includes getting invited to the party in the cloud. Time is money, and no one knows this better than money center banks and investment banks, where lower latency can be worth millions oI dollars in lost trading revenues, and time to market is crucial. For this reason, buyside and sellside rms as well as traditional banks have eagerly adopted cloud computing as part oI their IT portIolios. It`s not |ust the lowered costs that are drawing in the crowds, but benets like standardized processes, improved customer service and a stronger sense oI security and data privacy. However, the investment decisions do not stop there. Capital markets rms must also make a choice oI public versus private cloud investments. These rms have Iocused largely on private cloud inIrastructure, but the Iuture is promising Ior greater hybrid and public cloud adoption. Security and exibility oI data is a high priority Ior banks and Wall Street rms. Theymust keep a vigilant watch over private customer data, and the inability to control data could compromise the business that the data supports. The desire Ior that control has made private cloud solutions, or cloud solutions shared by private communities, the overwhelming choice Ior banks, they are comIortable with the control private cloud architectures oer in security, maintenance, standardization and agility. Private cloud deployments may not be as nancially attractive, but they can be less disruptive and leverage existing security protocols.Public cloud deployments may oer lower upIront costs, with quick and expansive scalability, but they have a signicant downside in compliance, accountability, security and lockin. Most rms are loath to move sensitive workloads and data into the cloud, so private clouds will dominate this sector Ior the next several years. Most rms see mission critical and customer sensitive data as the last piece to move into the public cloud - iI it ever does.We see a level oI comIort with moving collaborative applications like email and messaging, Web applications and CRM into the public cloud while maintaining critical data like business intelligence}analytics and business processes in the watchIul eye oI the private cloud. IDC survey ndings have also shown that across all industries, roughly twothirds oI rms surveyed expect to be in production with private cloud deployment by 20I3. Has the security element handicapped banks Irom tapping into the strengths oI the public cloud? To some extent yes, but this is where hybrid clouds are an attractive option. A hybrid cloud model helps nancial institutions maintain their highly condential workloads and data under tight supervision through private clouds, while en|oying the reduced capital expenditure, eciencies oI vast scale, and greater agility through nonsensitive soItwareasaservice applications in the public cloud. Lxample: An institution might nd it convenient to have client names and contact details in a secure public cloud but be unwilling to have sensitive data like account numbers, balances and transaction details exposed in the same cloud. In this way a hybrid model allows some elds to reside within an institution`s purview and visible only to a Iew. Outside the rewall, only the nonsensitive elds are accessible, and even then, only to users with appropriate access controls. Community or hybrid clouds combine the benets oI public with private environments. These types oI clouds are shared by several organizations (multitenant) that have similar concerns in their specic sectors. Industry stalwarts such as Bloombergand NYSL Luronext have stepped in to provide such hybrid clouds. It is worth noting that capital markets rms are more comIortable housing cloud services with an industry peer, someone they trust and have longstanding relationships with, as opposed to an Amazon or Google. The NYSL Capital Markets Community PlatIorm has been developed to address the unique perIormance and security requirements oI nancial services rms. The platIorm oers a range oI cloudbased services that let rms purchase computing power on demand. Services like this will expedite the creation and launch oI new trading strategies and thirdparty services to the capital markets community through rapid provisioning oI computing power and market data within a exible, highperIormance cloud Iramework. Many rms have shown a willingness to use NYSL`s collocation services, and the Capital Markets Community can be seen as a logical extension oI that platIorm. Industryspecic community clouds will be a key Ior many industries worldwide.Firms considering cloud computing must use a careIul, strategically sound approach. One approach is to begin with moving noncritical platIorms and data rst, such as developer applications, email, change management systems and conguration management systems. Then slowly move on to those workloads that make the most sense to consolidate in the cloud. Avoid the herd mentality, evaluate your own internal capabilities, and be aware oI what options are available and proven. Compliance is another consideration in a cloud services stratey. Financial rms and other highly regulated entities require assurances about the integrity and condentiality oI their virtualized IT environments. Cloud services and inIrastructure providers must oer automated compliance assessments against industryaccepted standards and specic regulations, as well as capabilities to remediate gaps and Iailures when an outoIcompliance event is detected.The cloud will evolve, too. Vendors will need to consider a host oI Iactors to maintain their existence. IDC Financial Insights Ioresees diversity in the portIolio oI cloud oerings Irom vendors with customization as essential to success. We also expect changes in pricing, delivery and packaging. Cloud oerings have Iorced rms to rethink their own IT investment strategies, which in turn has Iorced vendors to customize cloud platIorms to control and mitigate risk in this sector. Banks need clouds as much as vendors need to adapt to new methods oI IT procurement. It is a symbiotic relationship, it`s |ust a matter oI time till hybrid and private clouds become tools at all capital markets rms. }cannc Capachin is rcscarch vicc prcsiJcnt jor corporatc trcasury anJ spcnJing guiJcs at IDC Iinancial Insights. Michacl Vcrsacc is rcscarch Jircctor oj glohal risk at IDC anJ Tasnccm IcJcral is an analyst at thc company.Cloud Watching: How Banks Can Strike PublicPrivate Balance By Jcannc Capachin, Michacl Vcrsacc and Tasnccm FcdcralWe see a level ol comlort with moving applications like email and CRM into the public cloud while maintaining critical data in the watchlul eye ol the private cloud. 20 AMERICAN BANKER | FINTECH 100 | OCTOBER 2011 AMERICANBANKER.COMFinTech 100|Risk ManagementAs the eects oI the global nancial crisis and recession linger into 20I2, eective risk measures will continue to be critical to survival. The unimaginable risk and control Iailures at UBS present a perIect case in point thatrisks will continue to come Irom all angles - Irom external market Iorces and changes, Irom the credit positions oI customers, investments, and counterparties, Irom inconsistencies and Iailures in oversight and operations, Irom regulatory compliance blunders, Irom technoloy decisions. To be eective, a risk management program requires not only sophisticated management and a playbook Ior awless execution, but signicant technoloy investments and IailprooI implementations.Using a Iramework adopted Irom the Basel Accord, risktechnoloy spending across credit, market and operational risk domains, with |ust a Iew exceptions, is Iorecast to be between $54 and $60 billion in calendar year 20II. Looking into 20I2, risk spendingrepresents approximately I5% oI global technoloy and services spending in the nancial services sector. OI course, technoloy investment is only part oI the puzzle. In the case oI UBS, what would be considered by some to be world class trade and compliance systems did not stop a run on the bank beIore $2 billion was lost. But with the right oversight, culture and controls in place, risk management technoloy can help monitor and detect the risks that should be avoided. Some oI the core drivers Ior risk technoloy spending in 20I2 will include: Sovereign debt and tighter but uncertain regulation - Uncertain nancial markets across the U.S. and Lurope continue to place a huge premium on eective capital management. This Iuels investments in credit and stresstesting capabilities, liquidity Iorecasting, data management, analytics and riskreporting inIrastructures and services. The ability to connect cash Iorecasts to liquidity scenarios to optimize the use oI capital have quickly become tablestakes Ior corporate treasurers, CFOs, and asset liability committees. Proposed regulations over derivatives will also create a new wave oI risk spending Ior the capital markets industry in desklevel trading and exchanges, compliance reporting, clearing and settlement risk, counterparty risk management, and portIolio modeling. Governance and nancial perIormance demands - In all markets, it is increasingly vital Ior rms to harness inIormation to make actionable, optimized and timely decisions, keeping risks at anticipated and acceptable levels, and uncovering opportunities to stay ahead oI the competition. Key to this success are a welldesigned technoloy architecture, a suite oI analytic applications Ior riskaware decision making, and a commitment to raise the analytical orientation oI the organization towards Iactbased decisionmaking. Protecting critical inIrastructure - The Irequency and volume oI breakdowns in critical inIrastructure resulting Irom cyberattacks is increasing dramatically. The advancement and adoption oI newer technologies such as mobile devices, social networks, and cloud add to the risks oI disruptions in nancial inIrastructure, due to either direct criminal activity or indirectly as a result oI poor designs or implementations. There is also worry that underinvestment in legacy inIrastructures could expose rms to an increased number oI outages. Increasing visibility and transparency - The data architectures that nancial institutions deploy Ior running disparate operations are extremely complex, Iarung and in many cases cobbled together through many years oI mergers and acquisitions. In addition, individual organizations have inconsistent methods and vague languages Ior understanding, assessing and visualizing aspects oI their risk programs. These disparate operations and inconsistencies reduce the eectiveness oI risk intelligence, and make key risk activities such as regulatory oversight extremely dicult, complex and costly. Spending will continue on enterprise risk systems that have more precise methods oI describing risk Iunctions and events, and reporting risk across organizational entities and to external parties, including counterparties and regulators. NMichacl Vcrsacc is rcscarch Jircctor, Glohal Risk at IDC Where the RiskTech Dollars Are GoingBy Michacl VcrsaccBank risktechnoloy spending across credit, market, and operational risk domains, with just a lew exceptions, is lorecasted to be between $54 billion and $60 billion in calendar year 20II.AMERICANBANKER.COMAMERICAN BANKER | FINTECH 100 | OCTOBER 2011 21FinTech 100|Mobile BankingWhatever you think about mobile payments, you are probably dead wrong.Do you dismiss the technoloy as trendy, something that will never translate Ior your customer base? Or do you believe that it will be a smashing success, with your clients ocking to mobile banking and payments in large numbers? Maybe you are somewhere in between. We maintain that the one thing you can be certain oI is that you are going to be wrong. Why? Because in the whole history oI mobile communications and nancial services, Iew have accurately predicted the Iuture. There are simply too many variables. The best you can do is stay exible and adopt a stratey that is robust over the largest number oI possible outcomes. Here are a Iew oI the most important variables you need to keep in mind:Variable No. I: AcceptancePayments is unlike most markets, because its value depends strongly on the number oI participants. Twice as many participants creates Iar more than twice the value. II you have actually tried to use a mobile payments service to send money to a Iriend, you know that more than halI the battle is simply getting the Iriend to agree. In most cases, people would rather have cash, because they know that everyone accepts it. Once the rst payment is made, the second becomes much easier, however, the overhead associated with the rst payment is so high that most people will never get past it.Now suppose that you use one mobile payment scheme and your Iriend uses another (there are literally dozens Irom which to choose). Who is going to switch? Think about this Ior a bit and you begin to see why, despite the advantages a mobile payment scheme may have on its own or in a pilot, garnering widespread acceptance in the real world is a decadeslong proposition.Variable No. 2: Security and FraudIn most markets, when new technoloy becomes available, the best plan is to rush to market and capture as much share as possible. Fraud losses are an acceptable price to pay Ior expansion. However, in mobile banking, early Iraud can have a lasting impact on the value oI your brand. As a result, the developers oI mobile banking platIorms have taken great pains to ensure the same level oI security Ior mobile transactions as Ior IacetoIace transactions. However, the reality is that no one really knows how saIe a system is until it is tested, and mobile banking and payments are not large enough to have attracted serious criminal attention. That will change in the near Iuture, and when it does, banks had better be paying attention. Any large, wellpublicized event could spook the public Irom adopting this technoloy Iurther, thus slowing adaptation rates. Security is an arms race, with countermeasures and countercountermeasures evolving together, as criminals nd holes in the system and security proIessionals close those holes. Nonbanks that rush to market may look threatening, because they are growing extremely Iast, however, this |ust means that they will be more badly damaged when the criminals catch up. At that point, we will see multiple mobile payment services collapse, unable to pay Ior the losses their insecure systems have enabled.Variable No. 3: Competitive LnvironmentThere are at least six ma|or players in the mobile wallet space today: Isis, Visa, PayPal,Amazon, Google and Apple.While banks may worry about being disintermediated, all these competitors rely on bank payment systems to survive and will be spending the next two to three years tearing each other apart. Isis, PayPal and Google already have each gone through at least one large transIormation oI their business model, and there will be more to come. It is Iar too early to pick a Iavorite, and banks have no need to. }ust wait until the eld has produced a clear winner or two, and then do business with them. Variable No. 4: ReliabilityConsumers as a whole are Iairly tolerant oI having dropped cell phone coverage. Our daytoday lives, while made more convenient by cell phones, have not evolved to the point where we require a signal at all times. Payments, however, do need to work all the time. Various technologies can be utilized to conduct mobile transactions. Some do require a connection back onto the mobile network, customized downloaded applications, SMS texts and browserbased services. Other technologies, including neareld communication and Bluetooth, require only that the device pass close enough to the point oI sale terminal to register. Lven then, without a mobile connection, much oI the advantage over legacy technologies is lost. In addition, the large adoption and continued expansion oI end users on the mobile networks may become too much Ior the carriers to handle, possibly interIering with the success oI mobile banking and payment. Finally, all mobile devices are dangerously reliant on batteries, and current battery liIe technoloy is not advancing as much as power consumption. Frustration levels will mount iI consumers are unable to perIorm transactions because oI a drained battery. All these Iactors make mobile services less reliable than nancial services rms and their customers are used to.These issues can and will be addressed by the industry and organizations with entrepreneurial spirit. However, the process will not be Iast or predictable. Financial institutions should monitor the market and invest wisely in mobility, and avoid getting caught up in the hype. Marc DcCastro is rcscarch Jircctor anJ Aaron McPhcrson practicc Jircctor at IDC Why Mobile Payment Predictions Aren't Worth MuchBy Marc DcCastro and Aaron McPhcrsonIn payments, value depends heavily on the number ol participants in a network.22 AMERICAN BANKER | FINTECH 100 | OCTOBER 2011 AMERICANBANKER.COMFinTech 100|Case StudyWhat FirstMeritCorp.`s own research made starkly clear: How important it was Ior the $I4billion asset bank, oI Akron, Ohio, to deploy mobile banking, and soon. AIter adding about $4 billion oI deposits and 54 branches when the institution acquired three Chicagoarea banks |ust months apart in 20I0, the pressure was on to prove to new and existing customers that FirstMerit was responsive, Iullservice and Ieaturerich, despite integration eorts.We were hearing Irom customers that they either wouldn`t necessarily consider a bank that didn`t have mobile and}or would consider leaving a ban