Chinese Bank Chooses Accenture (revised)
Accenture plc (ACN) recently announced that its management consulting services have been selected by Hong Kong-based Wing Lung Bank, for an undisclosed amount. Per the deal, Accenture will support the Bank in restructuring its information technology (IT) system.
Wing Lung Bank is the oldest Chinese bank and a wholly owned subsidiary of China Merchants Bank. The bank has kept itself in tune with the technological changes of the modern day, which has enabled it to retain its goodwill. Wing Lung Bank will now be deploying a new core banking system across its 50 branches.
The system is expected to streamline the bank’s product portfolio, improve its operational efficiencies and strengthen its performance management controls.
Core banking systems form the backbone of banks' IT infrastructures. The system unifies banking services through a group of networked bank branches. Bank customers can access their funds from any of the member branch offices. They can also make simple transactions such as the opening and transferring of deposit accounts, processing loans, mortgages and payments. Banks make these services available across multiple channels like ATMs, Internet banking and branches.
Accenture has implemented more than 200 core banking systems globally. Accenture’s own core banking solution, Alnova, is being used across 100 financial institutions including Banco Bilbao Vizcaya Argentaria, S.A. (BBVA). The solution’s increasing demand has attracted recognition from Celent, an industry analyst firm. The firm conferred ‘XCelent Functionality Award’ for Alnova for breadth of functionality for large and midsized institutions.
Accenture’s comprehensive service offerings have made it one of the key IT service providers. A large product and service base has also provided the company a top spot in the market. Accenture has regularly won deals from all industrial sectors as well as the federal vertical.
Though Accenture’s deal prospects look bright, its large number of government contracts (which carry low margins), stiff competition from IBM Corp. (IBM) and significant European exposure may temper its growth going forward.
Currently, Accenture has a short-term Hold rating, denoted by the Zacks #3 Rank.
(We are reissuing this article to correct a mistake. The original article, issued June 18, 2012, should no longer be relied upon.)
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