Midas (banking system)

Last updated September 11, 2019

Midas is a line of banking system solutions ^{[ buzzword ]} provided by Misys corporation that was initially developed in the 1970s and gained significant market share through the 1980s and 1990s.

Banking software is enterprise software that is used by the banking industry to provide and manage the financial products they provide. Within retail banks, banking software typically refers to core banking software and all its interfaces that allows them to connect to other modular software and to the interbank networks. Within investment banking, banking software typically refer to the trading software used to access capital markets.

History

Kingsley-Smith and Associates

Kingsley-Smith and Associates (KSA) was formed in 1972, initially as a full software service company comprising five people serving manufacturing, banks and insurance companies within the UK. By 1973, the company had expanded to around twenty personnel, and begun to focus on UK banks and foreign banks which had operational activities in London.

Computer software, or simply software, is a collection of data or computer instructions that tell the computer how to work. This is in contrast to physical hardware, from which the system is built and actually performs the work. In computer science and software engineering, computer software is all information processed by computer systems, programs and data. Computer software includes computer programs, libraries and related non-executable data, such as online documentation or digital media. Computer hardware and software require each other and neither can be realistically used on its own.

KSA realised a gap existed in packaged software aimed specifically at banks, at the same time as IBM released its System/32, later known as IBM 5320, as a new small PC system which could easily be programmed in RPG. The original five Kingsley-Smith and Associates members were Brian Kingsley-Smith, David Eley, David Mitchell, David Shaw, and David Harington.

Initial development

The MIDAS banking system was designed in 1975 at Kingsley Smith and Associates by Barrington (Barry) Fludgate. It was the brainchild of Achie Reid a then director of KSA. The system was originally going to be called FALCON, since SWIFT had just been announced, but at the last minute was changed to MIDAS (Modular International Dealing and Accounting System), the name was suggested by Jeremy Blackman, one of the two original programmers on the development.

The development phase consisted of three people, Barry (designer and architect), Jeremy (technical programmer) and John Gilbert (business programmer) The system was built for the newly announced IBM System 32 in RPGII. The first sale was made to Australia and New Zealand Bank in early 1976 and was installed and running live in their New York office in the summer of 1976.

The KSA development of MIDAS banking system had nothing to do with the Management Information Distributor Accounting System (MIDAS) software system created by David Shaw in 1972 for Jaguar Rover Triumph.

BIS Banking Systems

In 1976 KSA and Midas was sold to the BIS Group. The company was called BIS Software and the main office was in Lincolns Inn Fields with software development based at York House near Waterloo; convenient for the City. The Managing Director of BIS Software was John Prosser with the charismatic Stan Smith as the Sales Director. David Tebbs (see ITNEA) became CEO in 1983 and later moved the business to Wimbledon and the company was renamed BIS Banking Systems. In 1988 the BIS Group was bought by Nynex, an offshoot of the recently demerged AT&T, and by this time the Midas banking packages supplied 900+ of the world's 1,000 largest banks.

City of London City and county in United Kingdom

The City of London is a city and local government district that contains the historic centre and the primary central business district (CBD) of London. It constituted most of London from its settlement by the Romans in the 1st century AD to the Middle Ages, but the agglomeration has since grown far beyond the City's borders. The City is now only a tiny part of the metropolis of London, though it remains a notable part of central London. Administratively, it forms one of the 33 local authority districts of Greater London; however, the City of London is not a London borough, a status reserved for the other 32 districts. It is also a separate county of England, being an enclave surrounded by Greater London. It is the smallest county in the United Kingdom.

ITNEA or Information and TMT Non-Executives' Association was founded in 1999 by David Tebbs and is the United Kingdom association for non-executive Directors (NEDs) and non-executive Chairmen of listed IT, telecommunications and related media companies. They are sometimes referred to as telecommunication, media and technology (TMT), or information and computing technology (ICT) companies.

AT&T Inc. is an American multinational conglomerate holding company headquartered at Whitacre Tower in Downtown Dallas, Texas. It is the world's largest telecommunications company, the largest provider of mobile telephone services, and the largest provider of fixed telephone services in the United States through AT&T Communications. Since June 14, 2018, it is also the parent company of mass media conglomerate WarnerMedia, making it the world's largest media and entertainment company in terms of revenue. As of 2018, AT&T is ranked #9 on the Fortune 500 rankings of the largest United States corporations by total revenue.

Leadership phase 70s and 80s

Midas became the standard package for banks off shore operations (and some domestic wholesale banking operations) worldwide by the end of the 1970s, and thanks to that early leadership it has been argued that Midas is (or was) the world's most successful banking system. In the 1970s and 1980s the Midas family of banking-packages led the market with more worldwide customers, more awards, and more capability than any other. Thanks to the inertia of banks, 10 year renewals and cost of migration by some accounts it could claim to have kept this leadership position into the 1990s. The system had broader functionality (and sometimes deeper) than most of the packages initially available on packaged systems. It reduced risks bringing efficiency due to a fairly standardised and comparatively automated process cycle.

Offshore expansion 1990s

In 1990 BIS opened an offshore maintenance center in Makati City, Philippines. This pioneering move in the banking software industry was not capitalized on quickly and for the next decade the location was little more than a coding shop taking orders from the UK. It did however provide a cheap pool of resources amenable to spending months/years on site coding modifications and fixes. By the end of the decade no two Midas user sites ran the same code base and Midas maintained large staff numbers in most financial centers.

In 1993 BIS Banking Systems was purchased by ACT ACT which had previously purchased Kindle Banking Systems and a handful of other banking applications. The organisation was fragmented with some parts of the organisation called ACT International and some labelled ACT Financial Systems.

In 1994 ACT bought Kapiti Ltd, who owned the Equation product line. The IBM AS/400 based products, Equation from Kapiti and Midas from ACT/BIS were united into the Midas Kapiti International (MKI) business. Technical and functional comparisons between Midas and Equation followed. It was no surprise that Equation had zoomed past Midas in terms of core banking functionality (payments, lending, customer management, deposits, tellering), but it was something of a shock for the Midas team to see how the Midas user interface, the flat file data base and the system architecture in general had fallen behind Equation - and by implication fallen behind other competitors. Multiple Midas catch up projects followed to retro fit basic features like product templates, customer centric banking and application program interfaces (API's) into the aging platform. The federated Midas data base however was considered beyond redemption and remains fragmented and poorly documented.

Midas has a very broad coverage of banking business areas. In the 70s and 80s it had provided market leading functionality in several of those areas. However, in the late 1990s other packaged systems within Misys and from other vendors caught up with and overtook Midas in areas like retail banking, customer and party management, work flow and most significantly treasury. Despite this in the early 1990s Midas maintained a leadership position or close to leadership position in terms of annual new names sales and installed base size.

Misys International Banking Systems – decline

On 1 October 2001, Midas-Kapiti International [MKI] was renamed as Misys International Banking Systems. The new name formed part of an extensive re-branding exercise undertaken by the company, which also embraced sister companies MKI Frustum and the Credo Group, becoming unified under the new brand name.

Midas had built up an impressive user base of international branch banking and treasury operations in the previous decades. Treasury focused users in the Midas user base came under attack from cheaper Windows and Unix based systems with better coverage of the newer classes of financial instruments like derivatives. Although Midas had some retail functionality the Midas team under estimated the complexity of retail banking software, importance of work flow and automation resulting in the stalling of multiple Midas retail banking initiatives. Overall the Midas customer numbers were in decline. In the late 1990s Midas was the first core banking system to introduce global processing to the core banking industry but this did nothing to stop the decline.

Misys 2010 onwards – stasis

Two technology refreshes Midas Plus and BankFusion Midas have staunched the flow of defections from the existing user base and some existing user banks are expanding usage of the system. However, there have been very few new name users signed in recent years, nonetheless the legacy installed base is still large compared to most competitor system when measured by numbers of banks, user banks profiles and the re-occurring revenue stream..^{[ citation needed ]}

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References

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