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IBS Journal quoted Mindwares activities at a new core banking solution MIND-xQ


Estonian software house Mindware builds new core banking system

Mindware, an Estonia-based banking software vendor, has embarked on the building of a new core banking system, to be called Mind-xQ. The decision follows requests from two Estonian financial institutions, and Mindware's CEO, Peeter Klanberg, wants to start marketing the system in 2012. The main targets will be small and start-up banks in Eastern Europe.

Mindware's history in the banking IT industry started when it partnered with Swedish banking group SEB's IT subsidiary following the recession in Sweden in 2001. The subsidiary had been located in Tallinn to take advantage of lower costs but switched its focus to doing business internationally and outside the SEB Group with the help of Mindware, which is funded by private investors. In 2009, Mindware merged with part of the IT subsidiary set up by SEB in 2006, and the new entity became a separate company.

Two domestic outfits, BigBank and the Estonian Union of Credit Co-operatives, approached Mindware the same year with the request to build a core banking system. The Estonian Union of Credit Co-operatives is currently implementing Mind-xQ. Mindware was not previously a core banking vendor, though it had worked on similar projects, for example developing settlement systems for Bank of Estonia and a direct debit management system for Sampo Bank. Most closely related was a project at the State Treasury of Estonia's Ministry of Finance. Klanberg states that this included 'quite a lot of banking functionality'.

As well as receiving requests from Estonian institutions, Klanberg believes that having a solution will help Mindware's expansion abroad. 'We realised it is very hard to expand while just offering services, so we needed to develop a product.' Development of the system is already well under way: 'We have spent a little more than a year on putting together the architecture and the database design, and building modules relating to customers, deposits, and designing workflows'. Transactions are the current focus. While the Ministry of Finance project included money transactions, loans, deposits, credit cards, securities and other areas, 'this was only like a first draft for our system. We decided to build a better architecture,' Klanberg says.  

The system is based on Oracle databases, with business logic mainly at this level. The business logic and the presentational layer use Java technology. Klanberg lists the distributed architecture as the system's major strength. 'You can run the system in different places. From the bank's perspective, it can outsource some parts of the system.'

BigBank put up much of the funding for Mind-xQ but has subsequently selected Lithuanian vendor Forbis' core system, Forpost, to help it expand internationally (IBS, September 2010, Forbis scores first Estonian customer). The functionality it took from Mindware was mainly for deposits. 'Mindware couldn't deliver all the functionality BigBank requested quickly. BigBank has expansion plans for Germany, Austria, Spain and Finland, and it was a little too much for us to support so fast. But we had a very big contribution from BigBank, and we can now develop the system further and add more functionality.'

The second customer is 'happy with our schedule', Klanberg adds. This will be the pilot for most of the basic core banking functionality, such as deposits, loans and money transactions. Functionality for deposits, internet banking and the branch interface are already built.

Klanberg names Tieto as the main domestic competitor, but is more interested in Eastern Europe. 'There is not much activity in Estonia but in Eastern Europe and other developing regions there is definitely a market for this product. The large international systems may be too complex or too expensive.'

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