Chinese Banking Technology Vendor Landscape: The Domestic Players

The asset size of Chinese banks reached US$14 trillion in 2010, and bank IT spending reached US$ 11 billion in 2010. The domestic vendors account for most of the market shares in many fields, except for credit cards and wealth management which are dominated by foreign technology.

In a new report, Chinese Banking Technology Vendor Landscape, Celent examines the product features, customer segmentation and strategies of each vendor.

The major domestic Chinese vendors of IT systems in the banking industry are Digital China, Longtop, Yucheng Technologies, Sunline and Hundsun Technologies. Many foreign system providers, such as TCS, Temenos, and SAP, are also very active in the Chinese market. At present, the market is fairly fragmented, with the top 10 vendors having only 50% of the market. However, some of the publicly listed domestic IT vendors are expanding rapidly through acquisitions. The leading systems integrators in China are IBM, Accenture, HP, Digital China, Global Infotech, and Hi Sun Technology.

Although some foreign core system vendors have attained a certain level of success in China, the road is rough. At the same time, the market for credit card systems is already saturated with foreign vendors. Chinese vendors are relatively weak in cash management, wealth management, and risk management, and hence the potential is great for foreign vendors in these areas.

“In terms of opportunity, joint-stock banks and city banks are the priority customer segments in China’s bank technology market,” says Hua Zhang, analyst with Celent’s Asian Financial Services group and author of the report. “Celent recommends that foreign vendors find suitable distribution and implementation partners. Potential partners include Digital China, IBM, HP, Accenture, Global InfoTech, and Hi Sun Technology.”