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Bank Systems & Technology: The Blog

« March 2007 | Main | May 2007 »

By Nancy Feig

BenchMark Consulting International launches industry's first online business intelligence program with peer comparison

By Art Gillis
www.artgillis.com

Two key drivers influence the financial services tech world these days: 1) vendor consolidation and 2) integration of applications. In my opinion, both make sense and they are very beneficial no matter on which side of the fence one resides.

By Maria Bruno-Britz

If you’re in the payments side of the business at a bank, you can’t go anywhere without hearing the word “convergence”. In recent years, the push to bring together all the IT systems within the bank has intensified so that financial institutions have a more unified view of their business and customers. Beyond this is the drive to bring together the payments systems in the organization. Banks are siloed enough, and the issue is even more apparent in the payments organization where there are usually separate systems for each kind of payment: checks, ACH, wire, credit cards, debit cards, etc. Eliminating these silos alone is a mammoth task, but one that banks will need to undertake to remain competitive going forward.

By Art Gillis

Eleven blogs ago, I expressed my views about what a dumb idea it was for Citibank to spend billions on shortening the name of the bank and removing the red umbrella. What were they thinking? Do customers care about names and logos? Now Citi is executing a RIF to the tune of 17,000 employees. Do customers and employees care? I think they do. Put a banker back in the hot seat of Citi and I think you’ll see a better run giant. It seems to work everywhere else in the banking business. But don’t get rid of the lawyer. Just let him handle the employee class action suits.

By Maria Bruno-Britz

The London branch of Mizuho Corporate Bank is the first in the world to go live on FIN with the SWIFTNet Phase 2 solution. This is the next generation messaging platform introduced by Brussels-based SWIFT.

SAP and banking community definition group unite the banking industry around enterprise SOA standards

By Maria Bruno-Britz

Epson (Long Beach, Calif.), a supplier of value-added banking solutions, and RDM (Waterloo, Ontario), a provider of specialized software and hardware products for electronic payment processing, unveiled a new check scanning solution called CaptureOne. The companies are touting the products as a reliable desktop scanner for back office capture (BOC), remote deposit capture (RDC) and branch capture applications. Epson, known for its image scanners, teamed with RDM, known for its MICR accuracy, in creating the scanner.

CaptureOne offers a 100-sheet document feeder in two versions, with scan rate options of 30 or 60 documents per minute. Other features include clear electronic endorsements for 100 percent legibility, a double check detector that virtually eliminates double check feeding and a built-in franker that prints a static message on checks to prevent double processing.

CaptureOne will be available third quarter, 2007.

New TowerGroup Research Examines Fast-Evolving Space of 'B2Bank' Integration

Digital Check Corporationn announced Digital on Demand services at the NACHA Payments conference. The expanded services are provided in support of Digital Check’s network of solution providers and through Digital Check’s network of fulfillment partners. The new services allow financial institutions to more easily bundle software, scanner hardware and fulfillment services when deploying distributed check capture solutions to their branches and remote deposit capture customers.

LendingTools.com announced today at NACHA Payments 2007 the availability of ExtraNet FP ACH Risk Management. The new product is delivered as an integrated module of the company's successful ExtraNet Financial Portal in use by more than 2,000 community financial institutions for internal and corporate cash management services.

Fundtech Ltd., a provider of end-to-end corporate banking software and services, announced that it has signed eight new customers for its CASHplus cash management solution. Recent research from market consulting firm Celent, positioned Fundtech's CASHplus as a leading solution in its 'Evaluating the Vendors in Online Corporate Cash Management' report (December 2006). Fundtech's newest CASHplus clients include: RBC Centura ($23 billion in assets; Raleigh, N.C.), Rabobank, N.A. ($5 billion in assets; El Centro, Calif.), and Doral Bank ($9.2 billion in assets; Catano, Puerto Rico).

Unisys Corporation announced a new Open Payments Platform to help banks transform their payment operations and more easily deliver new products in an ever-changing industry.

By Art Gillis

Jack Henry always knew what the score was. More important than that, he made sure we knew the score as well. I have had lots of business encounters with Jack over the years, and not once did I ever worry about my backside. The first time I talked to Jack was by phone in 1980. I was working on a project for a small bank that needed a general ledger system. My mission was to purchase it from a small software company in Missouri. When I called to place the order, Jack wasn’t comfortable dealing with a third party, so we had a back-and-forth exercise for about an hour. That’s when I knew I liked this man. I never knew what he really thought of me. A few years later, I hand picked JHA for a client assignment at a midtier bank. The bank was in deep trouble with an outdated in-house system, and the task was to see if JHA could solve the problem. Jack flew to Minneapolis on his private plane. I flew Northwest. Jack beat me there. In the few minutes we had prior to our meeting, I told (begged) Jack to behave politely and let the bankers talk. Later we would have time to figure out the right strategy. It took about 20 minutes for Jack to figure out the problem, and he proceeded to give management his side of the solution. The bankers were the problem, and even the best new system wouldn’t do much to improve matters. We were not asked to return. But Jack had it right. Within a year, the bank had been acquired and as a result, it was rescued from a management team that didn’t have a clue as to how to run a bank.

Jack was a man of few words. Whenever I called him he answered the same way: “What are you up to now, Gillis?” His best compliment to me after I would mouth-off about an issue was: “That’s right.” Every encounter I have had with this man resulted in some form of business success, but in addition each encounter added some self analysis as to whether I got it right or not. That’s why I’ll miss Jack.

By Maria Bruno-Britz

Commerce Bank (Cherry Hill, N.J.; $4.3 billion in assets) has selected the CheckFree Account Reconciliation Package/Service Management System (ARP/SMS). In addition, Commerce Bank has upgraded to the CheckFree PEP+ Risk Compliance Package. CheckFree's PEP+, together with its suite of add-on modules, provides a complete solution for originating and receiving payments through the ACH. By leveraging PEP+, Commerce has the potential to improve operating effectiveness and risk management while decreasing costs to serve its customers.

By Maria Bruno-Britz

CheckFree announced that Whitney National Bank (New Orleans; $10.2 billion in assets) has selected the CheckFree PEP+ Platinum Package. The software and services deployment is designed to enable Whitney to rapidly and efficiently process ACH payments, streamline internal processes to mitigate risk and fraud exposure, increase revenue and ensure business continuity in the event of a future disaster.

By Maria Bruno-Britz

NACHA – The Electronic Payments Association (Herndon, Va.) released today at its PAYMENTS 2007 conference the NACHA Top 50 lists of the largest originating and receiving financial institutions of automated clearing house (ACH) payments for 2006.

By Maria Bruno-Britz

According to NACHA – The Electronic Payments Association (Herndon, Va.), nearly 16 billion automated clearing house (ACH) payments were made in 2006, a 14.5 percent increase over 2005.

By Maria Bruno-Britz

Jack Henry & Associates (Monett, Mo.) founder John W. “Jack” Henry passed away of natural causes this weekend at the age of 71.

By Maria Bruno-Britz, Bank Systems & Technology

Some banks are getting a bit creative in their efforts to make customers go electronic. Sovereign Bank (Wyomissing, Pa.), along with partner CheckFree (Atlanta), will donate $1 to The National Arbor Day Foundation for each new electronic bill that customers activate at Sovereign Bank from April 1 through May 31. Each donation will help cover the cost of planting one new tree.

By Nancy Feig

On Tuesday, we here at the Bank Systems & Technology headquarters were treated to visit from June Felix, IBM’s general manager of banking solutions. Felix was here to talk about IBM’s latest endeavor, three new “Banking Centers of Excellence," which will hereafter be referred to as BCOEs.

By Art Gillis

Twenty years ago I offered M&I Data Services (M&IDS) an opportunity to participate in my industry report, which was then called “Automation Trends in the Community Bank Sector.” M&IDS said no, even though 10 other prominent service bureaus (that’s what outsource companies were called then) wanted to pay good money to get in.

I’m a bit of a wuss, so I accepted the rejection. If it hadn’t been for Donald Trump, who in his letter to me on 6/2/1988 said, “Don’t ever take no for an answer,” I would have dropped the matter. Instead, I decided to go over the head of the M&IDS guy who said no and went to the chairman, a former IBMer, Denny Kuester. Mr. Kuester liked my plan, but admitted there was a little bit of bank culture interference working here. He wanted to see if he could eliminate the hurdles so I could make my visit to remove the wraps and take a good look at M&IDS. Within a week I was on a flight to Milwaukee. I put Dennis Kuester’s name on my list of “Quiet Heroes.”

What I saw at M&IDS was so impressive that I was compelled to tell my host at the end of the day, “How do you guys make a profit with so much resource added to customer delivery?” He didn’t have an answer.

When I say the timing is right today, it’s because of these reasons.

• The 1988 old timers are all gone. A new management team says yes to whatever makes sense.
• The 1988 revenue of $90 million is now $1.5 billion.
• In an industry of modest revenue increases, Metavante grew theirs by 20% in 2006.
• Metavante respects the service algorithm: good people + proven software + straight talk during the selling phase + commitment to conversion science + support no matter what = happy customers and no law suits.
• Metavante has all the right pieces of the technology pie in place.
• Metavante knows how to make smart acquisitions. There isn’t one bad apple in the barrel.
• Like all good family ties, when the children go off and do their own thing, the good ones never forget their heritage. M&I Bank will go from owner to customer, and I can’t think of a better “leaving the nest” than that.

Disclaimer: Art Gillis relies on his bank for investment portfolio management. He does not own stock in any company included in Automation in Banking - 2007.

By Maria Bruno-Britz, Bank Systems & Technology

The first week of April saw at least two significant moves involving two of the leading players in the bank tech vendor space—Denver-based First Data and Milwaukee’s Metavante. The deals illustrate yet again just how volatile today's financial technology space truly is.

By Maria Bruno-Britz, Bank Systems & Technology

Last week, I reported on the sudden flurry of announcements around mobile banking and payments applications in the U.S. A number of deals were highlighted. Well, I’ll now add to that the most recent mobile banking rollout by Citibank for its California customers. It would seem there’s no stopping mobile banking now.

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