Magazine article American Banker

Software: More Banks Plan to Develop It In-House

Magazine article American Banker

Software: More Banks Plan to Develop It In-House

Article excerpt

In the next few years, U.S. banks will change the way they obtain computer software, according to a study sponsored by the American Banker and the consulting firm Ernst & Young

Because of the weak economy, most banks are now buying packaged applications software and are making only small changes, if any, to customize the packages.

By 1993, however, more banks will be developing their software in-house and fewer will purchase packages, according to the American Banker/Ernst & Young 1991 Technology Survey. The research was based on responses from 57 of the top 150 largest banking companies as ranked by noninterest expenditures.

Staying Up to Date

Industry experts say the reason for the migration away from packaged software is simple: It will be increasingly difficult for banks using these systems to keep up with the rapid rate of change in the industry.

"In the early 1980s, people typically bought software packages and then modified them significantly to meet their needs," said James R. Dempster, vice president and group manager for software development at M & I Data Services, a subsidiary of Marshall & Ilsley Corp. in Milwaukee. "But if you modify a package, you can't keep up with whatever changes and new versions the vendor offers, and the vendor can't support what you've got."

According to the American Banker/Ernst & Young survey, published this summer, 39% of all U.S. commercial banks will developed applications software in-house by 1993, up from 35% now. …

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