Misys will also incorporate SAP components, such as general ledger, into BankFusion. This integrated platform will be jointly marketed by both companies. The UK vendor will also add SAP's CRM application to its retail banking offering.

In return SAP will integrate Misys Trade Portal and Misys TI Plus 2.0 into its own banking platform.

Misys chief executive, Mike Lawrie, says the vendor's partnership with SAP will help banks reduce IT complexity and cut costs.

Banks are looking for fewer, more strategic vendor relationships, says Lawrie, and this collaboration will provide customers with a rich technology platform and a broader set of banking products from a single source.

"The application know-how and market presence from SAP combined with Misys' domain expertise and market-leading position in banking software will enable global banks to get the best technology and a broader set of solutions from us," he says in a statement.

Lawrie says the combination "allows us to reach markets that we have not been able to reach previously and will enable us to deliver results for new and existing customers".

The alliance with SAP comes as Lawrie, who took over from Kevin Lomax as Misys CEO last December, pushes through a corporate turnaround programme at the company. Since his appointment Lawrie has over-seen a clear out of top executives and the sell off of a number of Misys business including IFA services outfit Sesame and two US health software units.

In July Misys said it was establishing an open source division in a bid to boost its business by increasing revenues from consulting and maintenance.

Commenting on the alliance with Misys, Leo Apotheker, deputy CEO, SAP, says: "It includes key aspects to enhance the Sap platform and add value to a bank without creating IT complexity."

"Co-innovation with a strategic partner like Misys is an important element in SAP's growth in the banking sector and demonstrates our long-term commitment and investment in this market," he adds.

Earlier this month SAP said it was working with Brussels-based banking systems vendor Callataÿ & Wouters to deliver an integrated core banking system, based on Sap technology, for midsize banks.

The agreement includes the integration of SAP's compliance and risk management technology with C&W's Thaler core banking platform. The Thaler system will also be available for deployment on Sap's Netweaver platform.

SAP has struck up a series of relationships with third party banking software vendors in the two years since it announced plans to develop an Industry Value Network for the banking industry. The aim of the IVN, says the vendor, is to create a virtual ecosystem for the delivery of interopeable and complementary service oriented architecture for financial services, comprising banks, consultants and suppliers.