According to the market research firm IDC, core banking systems became the ‘largest IT investment category’ in 2008 with a total market size of $176m, over 20% of the total banking IT solution market. IDC expects demand for core banking systems to grow at a compounded annual growth rate of 17% from 2009 to 2013 to reach $397m in 2013.
Weizhou Lian, CEO of Longtop, said: We believe one of the keys to successful core banking implementations in China is domestic knowledge which the Giantstone management team, one of the most experienced in China’s banking industry, brings to Longtop. Over the next ten years, we believe the national commercial, regional, larger city banks and smaller banks in China will accelerate their investment in upgrading or replacing their existing core banking systems.
The acquisition of Giantstone fills one of the main gaps we had in our product portfolio and will allow us to capitalize on the core banking opportunity in the non-Big Four Bank customer segment, which now accounts for 35 to 40% of our software development revenues.
Our core banking competency will also open up new cross-sell opportunities for our existing solutions such as BI and risk management applications. Furthermore, Giantstone’s proprietary core banking solution aimed at smaller banks will also potentially open up a new customer segment.
