Tesco will buy core banking system software this year to support
its plans to open bank branches in its UK stores.
Tesco Bank hopes to offer current accounts in the next two years
depending on the availability of the right technology.
A spokesperson at Tesco said: "We are looking to appoint a
banking systems provider later this year with deep knowledge and
expertise in UK banking. We are looking for a robust system with
the flexibility to enable us to innovate and develop new products
and services for our customers."
Off-the-shelf core banking systems are available from software
companies such as BEA and
Wall Street Systems.
Chris Skinner, CEO at financial services think-tank Balatro,
said any company offering current accounts has to ensure
availability and consistency. "The main challenge is in the
processing and ensuring that there is 100% uptime. They will also
have to link the processing with all the other banking channels
such as internet, mobile and call centres."
According to
research from Celent, banks will face growing competition from
non-bank financial service providers using new banking systems to
deliver services such as Web 2.0 applications.
Celent expects "new players and new ways of doing business in
terms of alternative banking systems to start sprouting up". These
include retailers, phone companies and pre-paid card suppliers.
Tesco, like other non-bank financial service providers, hopes to
take advantage of the poor reputation of banks during the
credit crunch.