Shy banks becoming reliant on open source

Australia's banks may be betting more of their core business functions on open source software to reduce costs and vendor dependence - just don't ask them to openly admit it.

Speaking at a Linux Australia open source forum in Sydney yesterday, transaction processing company CommSecure's co-founder Ray Loyzaga said open source software is put into customer environments and they remain completely oblivious to it.

"We're doing a lot with the banks," Loyzaga said when speaking about how 50 percent of BPayView customers have their statements delivered with Linux and open source systems. This rate will soon increase to 75 percent.

Essentially an e-payments and online share trading system developer that also dabbles with consultancy, CommSecure's applications allow electronic interactions between banks and stock exchanges.

Loyzaga said HSBC's online share trading system runs on Linux and open source software, and St George Bank is now using HSBC's system. HSBC Hong Kong's system was also built with open source.

When asked why the banks won't disclose details about their open source systems, Loyzaga, clearly frustrated at being bound by the banks' corporate PR muscle, said "it's hard to tell".

"Open source products may be seen as a threat to internal software use or security," he said. "The banks use open source but are unwilling to say so [but] there is less of a resistance now as all companies are running some sort of open source software."

Loyzaga spoke of one bank "close to IBM", that gets good service from IBM and as such any mention of another vendor may muddy the relationship. "The results include high reliability," he said, adding that since 2001 the total downtime for one application has been about 20 minutes.

In another case, CommSecure developed an application for a bank in 1999 and since then has been called for assistance only twice and both times it was the bank's fault.

"We're not using anything but open source, which is not a religious thing as we would use commercial software if there was no open source alternative," he said.

"Open source works well when you need to evaluate new software without a large commitment." Loyzaga also identified some problems with using open source software such as the difficulty in selecting a good solution from amongst all the candidate "pseudo-solutions".

"So there is work to be done in selecting the right tool," he said. "I don't think we've lost anything by using open source software, but we have benefitted."

IT services provider Volante's open source strategist Pia Waugh, also speaking at the forum, said with an estimated 400 open source services companies in Australia, the quality service providers will prevail and succeed in the market.

"The smaller companies can provide good local knowledge and the larger companies can scale better," Waugh said.

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