Newcomers Nymbus, Neocova, Finxact and Technisys and older competitors like Temenos, Infosys and Oracle are winning over community and regional banks by offering what some bankers describe as more flexible technology at fairer prices.
Many small banks remain skeptical of the payments network because it is owned and operated by big banks and they are waiting for the Federal Reserve to launch a rival service.
Alexander Lopatine, who founded Nymbus and has joined Mbanq, says alternative providers are gaining the confidence of more banks. However, questions remain about their staying power in the fight with traditional vendors.
Midwest BankCentre in St. Louis, with the help of a stable of fintechs, started Rising Bank to keep up with big banks in the hunt for deposits and millennial customers.
Small banks and credit unions say slow responses and outdated products from the establishment tech vendor can become a drag on their innovation efforts.
The Golden Contract Coalition, formed in mid-2016 to get community banks better deals with the “big three” core systems vendors, said banks need help with buying from fintech sellers as well.
The big four core vendors have had little incentive to innovate in recent years. But newer competition will force them to update their technology if they wish to survive the digital age.
