Treasury Workstation Deal Challenges Online Banking

G00200563

Analyst(s):

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Summary

In buying Speranza Systems, Wall Street Systems underscores that treasury workstation software is becoming a serious challenger to online commercial banking vendors.

News Analysis

Event

On 26 April 2010, Wall Street Systems (WSS), a provider of treasury workstation (TWS) management software for banks and commercial companies, closed its purchase of Speranza Systems, a provider of electronic bank account management (eBAM) software that supports the online opening and management of bank accounts, and the signing and mandate authority. WSS plans to integrate Speranza's eBAM capabilities within the WSS Wallstreet Suite and Wallstreet Treasury applications, which it sells directly to commercial customers and offers via private label to banks. The eBAM product will be available on a software-as-a-service (SaaS) basis.

Analysis

This deal underscores the competitive threat to online commercial banking applications posed by TWS vendors, which provide treasury functions such as cash management, analytics, and debt and investment management tools. Functionality for eBAM is typically not available through online commercial banking applications.

Gartner believes that the acquisition should be a wake-up call for banks and online banking vendors regarding the need for responsive, personalized customer applications. Increasingly, TWS vendors’ integrated approach to managing commercial processes and information is becoming more attractive to companies than banks' mainly product and transaction focus. This is a process disconnect, not a vendor or technology limitation.

Most bank offerings have limited forecasting and analytical tools and don't cleanly support multiple bank relationships. At the same time, many workstation applications are not geared to the bank-centric needs of smaller companies and fail to address multichannel delivery. However, TWS vendors are entering the banking market with offerings targeted to companies of all sizes and affordable via SaaS, while online banking vendors are expanding capabilities for forecasting and financial supply chain integration. Vendors in both camps acknowledge interest in alliances, possibly with each other, to more holistically support customer needs.

Gartner expects continued convergence of TWS and online banking functionality, increased private labeling of workstation software by banks, and more TWS vendors targeting smaller companies traditionally dependent on their bank's online application.

Recommendations

Bank IT leaders:

  • Look to TWS vendors as possible complements or alternatives to traditional online commercial banking applications.

  • Select vendors for online banking software based on how well they support the changing requirements of commercial customers, particularly in delivering information and analytic tools.

  • Leverage technology across commercial banking product elements (payment, trade finance and capital markets, and analytical tools) to support personalization based on customer choices, and shared business processes and information across bank products.

Recommended Reading

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