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Bank Systems & Technology: The Blog« April 2006 | Main | June 2006 » Integration is not just a word for vendor systems. Banks could use a dose of it also.May 22, 2006 @ 12:25 PM | By Art Gillis By Art Gillis I have a feeling that I am not the only customer whose accounts my bank chose not to integrate into my customer portfolio. After all, I have been a careful and responsible customer for 10 years. And with 13 accounts assembled from personal, family members and business, it’s certainly no systems challenge (using any one of my 10 favorite core vendors) to put all accounts together. Vendor systems claim they can handle up to 99 relationships. But here’s the rub. Only one of my accounts distinguishes me as a member of the 1% Club, and that’s my retirement plan. The other 12 are working accounts that do the job every day, but don’t do much for my bank’s P&L. So what’s the problem? They can’t connect my big account to my customer portfolio. So if ever an employee wants to see who Art Gillis is, they see only the cats and dogs. A couple of years ago, I made a phone call to see if I could connect the big guy, and after several prompts, I finally reached Bangalore. There was a bit of a problem using the word “integration.” Apparently, in India, the word has greater significance than just the systems definition. So I gave up and prepared myself for a visit to the branch where I had opened most of the accounts. I usually get a nose bleed whenever I enter a branch, but it was OK this time. I asked for Cindy, who had opened my accounts 10 years ago, and I got the familiar blank look as if I had asked for Marilyn Monroe. Finally, when I was introduced to a man who was wearing a tie, I knew I was in good hands. When I mentioned the big account, he related instantly with, “Oh that’s out in Plano, we can’t do that.” That in itself didn’t bother me because I hardly ever go to Plano also. But when you think of a global bank, certainly 7.5 miles from Dallas shouldn’t present a serious hurdle. Tom Friedman makes a very good case about how flat the world is now. But if Tip O’Neill were around he could have written his version of how local some things are since he was credited with the saying, “All politics is local.” I never got my big account connected, but when I last made a deposit at a drive-up teller, the tube sent back a little white tin container with several jelly beans in it. I ate them all. That’s when I knew I was in good hands at my bank. And Tom, you guessed it, the tin container was made in China. Account relationships are like the family kind. They’re very important, and if you ignore one, they’ll let you know about it, with a lot of attitude. Comment on this blog entryOld bank systems never die, they just continue to drain earnings May 10, 2006 @ 03:29 PM | By Art Gillis By Art Gillis In 1987, the Wall Street Journal published a study that evaluated technology in nine industries. Banking got the lowest grade, C-. Nineteen years and about 152 bank tech conventions later, technology is better. We now have GUI front ends. But the back end is still based on '60s technology. What never appeared in the evolution of bank technology was the proverbial clean sheet of paper. No one ever asked, “Why the hell are we even talking about automating this process, when we should be reinventing the process?” R&D in bank technology today is a matter of writing COBOL modifications to existing code. That’s called maintenance, not innovation. There’s not enough room on this blog to convince everyone that we are still suffering from antiquated architecture, so I’ll refer to one chance observation that makes the point for me. There was an employment ad in a recent issue of the American Banker for an application development manager. That was the first hint that someone should be fired at that bank. Any bank that is building its own software (that’s what application development means) these days is like a bank that is still making loans on waterfront property in Arizona. The next clue listed the experience required. People over the age of 50 will recognize these: COBOL, CICS, DB2, VSAM, and who knows why JAVA. There’s something wrong with bank technology, folks, and I’ll begin with my profession. 1) Consultants should be disturbing the status quo. 2) Bank examiners should be sending up red flags telling bankers we can’t stand another Y2K. 3) CIOs should be taking a sabbatical in India. 4) At least four vendors that I know should put 200 banks (let’s begin with the big guys) on their priority list called, “How Not to Act Like FEMA,” and 5) Bank CEOs should begin their next management meeting with, “What are we doing to get out of the '60s?” And don’t mention technology. If technology is in the '60s, the whole bank is in the '60s. Don’t panic, folks. I just thought you might want to get started soon because the trip will take 10 years. And in defense of any possible accusations of hypocrisy, I should tell you I am not an advocate of reckless spending, thanks to my frugal, New England upbringing. I keep my cars for 14 years. I still have the same wife. My suits last forever because I don’t get a chance to wear them much and I bought Brooks Brothers everlasting style. I never pay banking fees because I know how to beat the system (sorry fee income advocates). But every three years, I throw away my technology only because a tickler file tells me to. And I do mean “throw away.” When I tried to donate my discarded PC to my favorite charity, the Dallas Children’s Advocacy Center, the lady asked how old it was and when I said three years, she politely declined. I sent my check in early that year, I was so embarrassed. Here’s a non-profit that has more wisdom than most banks. Comments(4)Oops, the dog ate the files May 09, 2006 @ 03:33 PM | By Art Gillis By Art Gillis The next time a large bank loses customer data, it ought to come up with an excuse that the public can relate to. So far, the news reports have focused on four large banks. Those banks spend $11.6 billion a year on technology. A good padlock at Home Depot costs less than $4.00. Buy it in China or India and it’s a buck. Do the math. But if the loss occurs during the transport of data, there may even be a free solution to that problem. Thomas L. Friedman tells us the cable to India is so large, and still under-used, that I believe it could become an online data storage device. Banks could then leave the data at the bottom of the sea for free. And if a whale gets it, so what! They’re busy enough just staying alive, and probably wouldn’t have much of an appetite for consumer data.
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