European IT companies miss out on bank deals

European IT companies are falling behind in the race to win business from financial services companies - but are in a strong position to fight back as banks ramp up spending.

According to research by analyst house Financial Insights, European players are falling behind their counterparts in Asia and North America, with Reuters the only European contender in the top ten. Misys is the only other European vendor listed in the top 20, at 14.

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According to the Global FinTech 100 report, the top ten vendors that derive more than a third of their income from financial services are (in order of the revenue they get from financial services customers): Fiserv, Fidelity National Information Systems, Sungard, NCR, First Data, Unisys, Diebold, Reuters, Total System Services and DST Systems.

The top ten enterprise technology companies (in order of their financial services revenue as disclosed in the report) are: IBM, HP, Dell, Hitachi, EDS, Fujitsu, Cisco Systems, Intel, Microsoft and Accenture.

Financial Insights analyst Rachel Hunt Daniele Bonfanti said the potential for European financial services tech companies is good, with European banks showing strong levels of IT spend.

The analyst said there is huge potential for growth as banks focus on developing their product offering outside of consumer finance - in areas such as life insurance, pensions and asset management - while avoiding siloed data and systems.

IT investment also continues to be driven by regulation around payments, with the UK Faster Payment and SEPA initiatives. The analyst house said this will involve "fundamental shifts" in the way payments are processed and is driving business process management and automation, as well as system consolidation.

Similarly the capital market segment is buzzing around the much-anticipated MiFID regulation.

With these "ebullient" market conditions, European tech vendors should be using their local positions to drive growth, as banks are looking for technologies that allow more flexible and component-based offerings, the analysts said.