When asked to name their top vendors, credit union and bank technology executives can’t seem to agree, said a new report released by research and advisory firm Aite Group.For its new report-”Bank Technology Executives’ Most Admired Vendors”-the Boston-based think firm questioned 80 executives about their most used and most admired vendors in eight banking specific and horizontal technology areas, and their responses indicate a highly fragmented and competitive vendor market.“We can’t find a single category in which a majority of technology executives agree on the vendor they admire most,” said report co-author and analyst Gwenn Bezard. “This is not a sign that vendors are doing a poor job. It indicates that vendors face savvy buyers, leaving little room for anything less than outstanding engineering, sales and marketing, and delivery.”Aite Group asked executives about vendors they admire as well as those they currently use to indicate future purchase intent. Due to the recession, cost may dictate financial institutions’ vendor choices over quality, and their “most admired” vendors are most likely to gain business down the road, Bezard said.Plus, since financial institutions make infrequent purchase decisions on certain types of technology solutions, those that are currently in use may not reflect those that will be used in the future, the Aite Group analyst added.In the area of core banking, 23% of the responding IT executives said they use their own homegrown technology solutions; however, homegrown solutions did not top their “most admired” lists. The three most used core banking vendors-Fidelity (FIS), Metavante (recently acquired by FIS) and Fiserv-are also the most admired, Aite Group found.“Financial institutions tend to be underwhelmed by their own homegrown solutions-a positive sign for vendors,” Bezard said.The server hardware solutions used by technology executives do not match their most admired choices either. Currently in use by most financial institutions are HP (53%), Dell (45%), IBM (40%) and Cisco (33%). Technology executives say they admire IBM (36%) the most, followed closely by HP (36%), Dell (31%) and Cisco (21%).Survey results in the area of server hardware also indicate that leading vendor HP is no longer winning the server hardware vendor race by a landslide, Aite Group researchers found.“These findings reinforce what Aite Group learned through qualitative interviews-HP is losing momentum with its server line of business in the banking sector, primarily to IBM,” Bezard said. “The strong showings of Dell and relative newcomer Cisco are signs that competition is intense, however.”Other technology vendor areas covered by Aite Group’s research included IT services (in which IBM led in both the most used and most admired categories), database software (in which Microsoft, Oracle and IBM were both used and admired the most) and security information and event management (in which Cisco led in both categories).The final three areas are the least popular for having vendors in use by financial institutions at all, Aite Group discovered. Twenty percent of the respondents said they do not use business intelligence applications, while those that do use and admire Cisco the most. Meanwhile, 63% of executives do not use business process management applications, while IBM is used and admired most by those that do, and 10% of respondents elect against using storage services, while the other 90% selected EMC as their most used and admired vendor in that area.Of the eight technology vendor areas covered in Aite Group’s research, executives stated that in the next two years, they’re likely to invest in server hardware, storage services and database software solutions the most.Least likely to be worked into the budgets of banks and credit unions are technology solutions for business intelligence, business process management, core banking and security information and event management.“Regardless of how the economy is trending, banks are facing rising amounts of data that they need to retain and access,” Bezard said. “Compliance requirements are an important contributing factor to that trend.”Additionally, a third of executives surveyed said they plan to hire IT professionals in the next 24 months to assist them with their technology needs.“Those institutions clearly don’t expect to have enough internal bandwidth to handle their IT services in-house,” Bezard said.While much consolidation has recently occurred in the technology vendor industry, Aite Group’s research revealed that competition among vendors is high. How can vendors work their way onto the short lists of banks and credit unions looking to spend money on a new technology solution? Aite Group recommended emphasizing the bottom line and explaining how their solution stands apart from all the others.“We urge vendors to cut the fluff from their presentations, talk up return-on-investment metrics and answer simple questions such as ‘What is this solution doing for firms like mine?’ and ‘How is your solution different from other products or services I have seen before?’” Bezard said.–[email protected]

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