From the American Banker
Wachovia May Switch from S1 to Corillian Software for Web Banking
By Ross Snel
Wachovia Corp., an early investor in S1 Corp. and a user of its Internet banking software, appears to be shifting its allegiance to Corillian Corp., an S1 rival.
A Wachovia spokesman confirmed that the Winston-Salem, N.C., banking company has licensed and started testing Internet banking software from Corillian. Wachovia said it plans to use the Corillian and S1 software in tandem at first but will consider switching entirely to Corillian, the spokesman said.
In 1997, Wachovia was one of six prominent financial companies that invested a total of $14 million in Security First Network Bank of Atlanta. Royal Bank of Canada bought Security First a year later, and the resulting technology unit became Security First Technologies, an independent company that subsequently changed its name to S1 Corp.
Wachovia has since given up its stake in S1, and its capital markets unit taken a private equity position in Corillian. The Wachovia spokesman said that these investment decisions were not related to his company's choice of software.
Wachovia's use of the Corillian software is a feather in the cap of the Beaverton, Ore., company, which revealed the licensing agreement in a Securities and Exchange Commission filing related to its initial public offering.
Matthew Cone, chief marketing officer at Corillian, said the deal contributed "a significant amount of revenue in 1999 for Corillian." He declined to comment further.
Executives at S1 did not respond to requests for an interview.
Octavio Marenzi, managing director for the bank research and consulting firm Celent Communications, said, "It is not unheard-of for a large bank to use one software vendor for one business, say, credit cards, and a second vendor for core transaction processing."
But it would be unusual for a bank to use two software vendors for the same functions, Mr. Marenzi said. He said he did not know how Wachovia planned to use the two kinds of software.
The Wachovia spokesman said his company chose Corillian's software because it could accommodate "the rapid growth we are experiencing with our Internet banking line of business." He also said the software would help Wachovia expand its Internet services, though he declined to specify how.
Wachovia, the nation's 17th-largest banking company, has about 250,000 Internet customers and expects that number to double by yearend.
Citigroup Inc., another of the six investors in Security First Network Bank, still has an investment in S1 Corp., and its Citi f/i Internet-only unit uses S1 software.
The Direct Link has been removed, or at least I can not get to it.
I just find it Odd that Wachovia is doing this. The switching costs must be huge.
I have not had a good response on this yet. I have tried IR and several brokers that have started coverage and I got zip so far.
Drew |
