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Acceptance of ERP in BFSI sector?

Posted on 2015-02-15
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Last Modified: 2015-02-17
Some verticals like Banks and Capital Market firms still develop software in house.

Why Banks and Capital Markets still reinvent the wheel, Given that major ERP vendors like SAP and Oracle already have applications for these market segments which are not only very powerful and complete, but also cheaper on the longer run.
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Question by:gram77
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by:Wasim Akram Shaik
ID: 40613479
Its widely because the banking majors operate under various governance bodies and these bodies and rules vary each and every country.

Also for every change in project or program these banking companies spill out much more money than its required because of the complications and hell a lot of approvals ..

Banks also rely heavily on vendors as most of the tasks or functions. The Core Banking product is which can be a vendor product or a in-house product cannot be integrated with other applications for various security reasons.
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by:gram77
ID: 40613522
Good answer Wasim

SAP and Oracle have provisioning of compiling with various statutory regulations and are safe as well.

Some large banks like Deutsche Bank and Commonwealth Bank of Australia already have SAP running as a Core Banking product. Buy still it's acceptance is not widespread especially in North America.

Do you see the BFSI sector appreciating the use of off-the-shelf ERP systems in future?
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Wasim Akram Shaik earned 2000 total points
ID: 40613686
Yes, ERP Systems have a good scope in BFSI Domain. But as suggested earlier it depends on various strategical decisions that banks make/take.

Yeah I'm aware that some banks are moving out from traditional Mainframes systems to SAP but if you see the strategy they are not entirely shutting down their earlier systems, they are running them simultaneously with SAP for some time(say 5 years or so) after that they will again take a call to eliminate their years old system or not.

The reasons which ERP hadn't made much market in this BFSI Space is apart from the core-banking product and banks do rely heavily on vendors from (Customer Acquisitions/Retains/Legal&Compliance/Risk Assesment/Watchlists Management)

Some Vendors like Finacle, Sungard, Norkom,Fircosoft,Oracle(Mantas) are providing some customized suites which are fulfilling their requirements to most extent, this can also be one of the reasons that banks are not going to the complete ERP Systems.
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Author Closing Comment

by:gram77
ID: 40613699
Great insight
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