By Art Gillis

I enjoy looking at my opinions about the bank tech arena, a year or so after I went public with them. Here’s a list (in caps) that I delivered in 2005 at a seminar for bank tech companies, followed by a 2006 update (in lowercase).

1. MAJOR CHANGES SHOULD OCCUR IN THE VENDOR COMMUNITY. EVERY ONE OF THESE COMPANIES IS SWEATING THE FUTURE.

That was true in 2005, but some vendors reacted nicely and are now well positioned to handle change. Here’s the single most important ingredient for a bank tech vendor - the ability to implement new ideas.

2. BANKS WILL INCREASE THEIR SPENDING IN 2006, AFTER A COUPLE OF YEARS OF WEAK SPENDING.

It happened. Spending is up by about 9% in 2006 from the previous year.

3. NOTHING WILL BE BUSINESS AS USUAL.

So true. Look at Fidelity National Information Services, Jack Henry and Metavante. They threw away the template. Fiserv threw away only one piece of the template and brought in a CEO from the outside. Was that enough?

4. ALL THE WINNERS OF THE PAST WON’T BE THE WINNERS OF THE FUTURE.

Ask Fiserv. Fidelity is neck and neck with Fiserv after only four years for what Fiserv took
21 years to accomplish.

5. AFTER 20 YEARS OF “FIXING” TECHNOLOGY, THERE MAY NOT BE ANY
MORE BROKEN PARTS. THAT’S BAD FOR VENDORS. IT’S LIKE MICROSOFT LOOKING FOR AN ENCORE TO A PC OPERATING SYSTEM.

That might be OK. It’s not about what’s broken anymore. It’s about what isn’t performing up to par. Technology is not your father’s Oldsmobile anymore. It’s about zero to 60 in real time. And don’t ask how we do bank processing. Ask why we do it the way we do.

6. EVERYONE’S ASKING WHAT THE NEW SILVER BULLET IS IN BANKING.
THE ANSWER MAY BE GET OUT THE SILVER POLISH AND RUB THE OLD BULLETS.

Here’s an example. Cash management has been around for decades, but, today, cash management is a hot item because the tools for deployment are hotter. It’s like going to a library to do research vs. googling in your pajamas.

7. THE TRADE PRESS IS SENDING OUT SOME FALSE MESSAGES, SUCH AS:

LARGE BANKS WILL SWITCH TO NEW CORE SYSTEMS
CRM IS THE MAJOR PRIORITY FOR NEW SYSTEMS
SMALL ONE-PRODUCT COMPANIES ARE MAKING GREAT HEADWAY

Don’t believe everything you read. Large banks are deeply rooted in their '60s technology and can’t convert. CRM is like teenage sex, just a lot of chat room noise. And single-product companies are looking for acquirers because they can’t sell the same thing over and over again.

8. IN PAST YEARS, VENDORS RESPONDED TO RFPs BECAUSE IT WAS A SELLERS’ MARKET. NOW VENDORS ARE GOING TO NEED REAL SALESPEOPLE WHO WILL IDENTIFY WEAKNESSES AT BANKS AND SELL THEM BETTER SOLUTIONS.

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