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Bank Systems & Technology: The Blog

« October 2007 | Main | December 2007 »

As if there isn't enough bad news about the economy, here I am adding to the heap before it even happens. As much as I don't like bad news, what's worse is bad news that comes as a surprise. So be prepared. Just follow the facts, and then draw your own conclusions.

Do you think your bank's Web site is the best out there? Well, now is your chance to gain some recognition for your online achievements.

Everyone in banking seems to want a piece of China. And why wouldn't they? The Asian nation isn't only an economic powerhouse, but contains a quarter of the world's population. Just think of the customer acquisition opportunities. However, if you're a non-Chinese provider of financial services, the barriers to your entering this market are many.

Last week's blog about large bank vs. small bank technology produced exceptionally good and meaningful feedback.  I believe the three respondents added new dimensions to my message, and thus I want to make sure everyone sees the wisdom of the three gentlemen who commented.

Generation Y members and 22 million small business customers represent two huge untapped markets that banks can reach through online banking, according to a panel of experts and some bank customers during BAI’s Retail Delivery Show in Las Vegas on Nov. 15.

OK, I think we all know the writing is on the wall for checks. But just for the heck of it, I decided to attend a session at Retail Delivery called Why Is It Still Called a Checking Account? Dove Consulting managing vice president David Dove discussed with attendees the continuing decline in check volume and the rise in electronic payments, along with how branding can make a difference in banks' account acquisition and retention efforts.

After an unsuccessful attempt to find a sandwich at lunch on Wednesday (Note to BAI: Next year, order more sandwiches), I wandered over to the large ballroom to hear Lynn Pike, president of Capital One, give a talk on innovation. Fine, a positive message like that could help take my mind off my hunger! And seeing the clips of the firm's well-known Visigoth TV ad campaign was good for a few laughs.

There's no doubt that the U.S. is blessed technologically. We've nurtured the seeds of innovation on so many levels. But then I talk to people from other countries about what they're doing with mobile phones and I feel like we're a bunch of cavemen here!

The cover story in this month's Bank Systems & Technology focusing on the nascent Web 2.0 movement among banks was very interesting. It is also interesting to note that in the broader retail financial services arena, one can argue that banks are actually taking the lead in this effort. Indeed, as we posted recently on the Wall Street & Technology blog, aside from a couple of firms dipping their toes in the Web 2.0 pool, we have seen little application of it from major brokerages.

Once again, I first must confess to a bias before making this case. "Big" by itself has never impressed me. "Big and capable" is another matter. So when I tell you that small banks have better technology than the giants, I'm ready to defend my statement with facts.

By Dr. Tatiana Vazioulina, Parascript, LLC

The dramatic rise of financial fraud has become a scary trend in today's world. According to recent studies, approximately 9.2 million Americans suffered from identity theft crimes in 2004, costing consumers $5 billion, and banks and corporations $48 billion. The growth of these crimes has resulted in a renewed interest in advanced security means. Institutions are increasingly demanding more reliable, less costly authentication and authorization for everyday activities, such as performing financial transactions, boarding an aircraft, entering a secure physical location or crossing international borders. Biometrics is an emerging technology that is quickly garnering wide attention for its promises to alleviate security breaches and offer solutions to key challenges, such as financial theft and fraud, faced by real-world enterprises.

Lately we've been hearing more news about "green" banking initiatives than you can shake a stick at. Most of what has come across my desk have been either panicked warnings and dire predictions about what will happen with corporations don't become more environmentally friendly, or more concrete news, such as Sovereign Bank's efforts to move customers to e-statements or NACHA's announcement that it is forming a "green coalition."

There has been much discussion about online security for banks lately and generally it has centered around the obvious importance of keeping customer data secure. Aside from this fundamental need, there are ancillary benefits that accrue from successfully implementing such measures. Among them is the ability to provide enhanced customer service online, which not only can increase customer satisfaction, but reduce service costs as well.

Nontraditional financial services providers just got another leg up on banks in the remittance market with a new mobile phone service. GSM Association (GSMA), a global trade association representing more than 700 GSM mobile phone operators, and Western Union Company announced late last month an agreement to facilitate the development of cross-border mobile money transfer services

Short answer--not very. In the past week, the top four bank tech vendors made headlines--the kind that Wall Street notices. Metavante went public after thinking about it for several years. Fidelity National Information Services intends to split the company into two public companies. Fiserv sold off a major piece of its healthcare business. And Jack Henry announced a nice first quarter report. Forgive me, folks, if this stuff doesn't get to me like the Red Sox Sweep, and it's not that I don't care about 96 companies in my report.

Banks are always talking about how important it is for them to find new markets in order to grow. The unbanked and underbanked have been making headlines for months as financial institutions try to develop strategies to lure this group into using banks for their finance needs. However, another possible avenue to take might be in the microfinancing area.

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