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Bank Systems & Technology: The Blog

« May 2008 | Main | July 2008 »

Bank of America announced last week it is cutting 7,500 employees. Unfortunately, it's not because of improved technology—it's because of Countrywide. The best employee-reducer in banking is acquisitions. I'm sorry to report the bad news, but today's technologies are going to make bankers at the top work harder and overworked bankers at the bottom will be welcoming additional coworkers. Before you take that double-shot of Jose Cuervo, hear me out.

By Alan Tenenbaum, Cohen Pontani Lieberman & Pavane, LLP

Over the past few years, we've seen an enormous amount of patent litigation against companies in the financial industry. The patents at issue in these litigations primarily concern business methods, covering such things as financial email alerts, systems for trading treasuries and other securities, Check21 technology, pre-paid gift cards, and online credit applications, to name a few. The trend is continuing, with recent infringement suits brought by Edge Specialists LLC for patents that concern systems for automated options trading, and by Lincoln National Life Insurance Co. for patents that concern computerized methods for administering annuity products.

When vendors tell Wall Street not to expect much in 2008, you know we're in a leveling off period.

Here's my take on the subject.

Sometimes I like to post stories about my personal experiences with banking technology. I think what happened to me the other day with my debit card fits the bill.

It wasn't too long ago that I wrote a blog about a new mobile financial services standards working group that was being established by the Financial Services Technology Consortium (FSTC). The group hopes to address the interoperability issues facing the industry to help adoption rates. Now, over the Atlantic in Finland, the Mobey Forum, a nonprofit financial industry forum that helps facilitate mobile financial services for banks, issued a whitepaper which, it says, lays the groundwork for global mobile financial services (MFS).

By Randy Rodriguez, Bluewolf

One word summarizes today’s banking climate: volatile. Bank CEOs are focused on capital markets, fall-out from the subprime debacle, and the pace of merger and acquisition. FDIC’s last Quarterly Report for 2007 points out the realities facing today’s banking leaders. With banking quarterly income at the lowest levels in 16 years, eroding margins, earnings volatility, non-current loans rising and one in four banks losing money, IT managers will continue to face enormous challenges in 2008.

There's a bit of an uptick in the marketplace right now regarding core conversions among banks of all sizes, even the giants. But be aware that this is the kind of stuff that arrives at the Gillis Gossip Gateway. It's mostly hearsay, whereas I deal in proof as supported by numbers. In 2007, the churn rate for core conversions among the 16,881 financial institutions was only 2.7 percent. It's been dropping every year for at least the past six years. So the accurate realization will arrive this time next year when the numbers roll in for 2008.

I'm not complaining about the large number of daily news items I receive from Google, because I asked for them—intelligently I might add, according to a few key words. So when I read about a report last week of IT glitches that blocked New Zealanders from using their banks' services, I wondered if those banks were using FNIS, Fiserv or Metavante. Nah.

I've been pretty skeptical about the use of Web 2.0 tools in the financial services space. I just can't see how banks can broadly implement things like wikis, blogs and podcasts throughout their practice just to cater to a particular demographic—Gen Y. Nor can I see why they would want to embark on such a project beyond simple curiosity.

It looks like the mobile channel just found a standards champion—the Financial Services Technology Consortium (FSTC). The organization announced it is assembling a team of industry experts to help develop best practices and standards for mobile payments.

By Anand Swaminathan and Andrew Kappy, Accenture

Medium-sized banks find themselves in an increasingly desperate situation. They are losing significant market share to their larger competitors without the scale or funds to weather the weak economy, diversify their business or acquire others as a competitive strategy.

Throw vendor brochures into the recycle bin before you read them, and don't waste your time attending a vendor dog and pony show. If you want to know which vendor you should be entrusting the future of your bank with, go talk to them. Following is an excerpt of a chapter in my report.

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