Channels

03:10 PM
Nancy Feig
Nancy Feig
News
Connect Directly
RSS
E-Mail
50%
50%

Educated Opinions: 2007 Bank Technology Forecast

We often define ourselves by our adversities. Financial services technology is no different.

We often define ourselves by our adversities. Financial services technology is no different. In 2006, fraud, online attacks, fines, inefficiencies and overspending plagued the industry, and banks' IT priorities reflected the challenges. According to Boston-based Celent, compliance- and security-related projects dominated financial institutions' IT agendas for the year -- as BS&T predicted in this same issue a year ago.

Security did indeed garner the most attention in 2006. Multifactor authentication was the buzz term of 2006, as the FFIEC's guidance -- equal parts compliance and security -- forced banks to take a closer look at their risk-management strategies for Internet-based transactions.

But the financial services IT industry is about more than just challenges. 2006 also saw banks pursue new opportunities by focusing on the customer experience, reaching out to the unbanked and exploring emerging technologies, such as mobile banking.

So what will be the top challenges and opportunities for banks in 2007? In this year's Banking Technology Forecast, BS&T has gathered outlooks from leading industry participants, including bankers, vendors, consultants and analysts. In the following pages, they offer their predictions for the top issues facing banking technology professionals in 2007.

As in 2006, improving the customer experience is a recurring theme in this year's outlooks. The emphasis is on creating an overall standout and unique experience -- one that is consistent across all channels. "[The] customer- centric design process continues in 2007," says Wells Fargo's Jonathan Velline.

As a result, the technology associated with measuring the customer experience, specifically analytics, is sure to get a closer look in 2007, according to TowerGroup's Jim Eckenrode. "Banks today need to improve their abilities to respond to customers," he explains. "Such ability rests in part on the development of contextual awareness."

Another common issue among our experts' forecasts represents less of a shift in strategy than does customer centricity. The need for banks to become more efficient is not new, but as the industry faces commoditization of traditional products and resulting compressed margins, the need is greater than ever. "The major challenge for tech executives in 2007 will be how to balance the demand for business growth while improving and streamlining operational performance," notes Metavante's Jamie Geschke.

One maturing technology that may help banks improve both the customer experience and efficiency is service-oriented architecture. Many of our experts point to the application of SOA to lower product costs, enable channel integration and speed time to market for new products and services. In fact, according to Celent analyst Bart Narter, "The confluence of the business demand for information across lines of business with the evolution of SOA bridging across technology silos has created the perfect storm."

Of course, spending on new technology will be scrutinized as much as ever. Celent reports that spending in financial services IT is expected to curtail in 2007, meaning that, as SAP's Falk Rieker observes, banks once again will be expected to do more with less. Hopefully, 2007 will be defined by its triumphs and not its adversities.

Comment  | 
Print  | 
More Insights
Register for Bank Systems & Technology Newsletters
White Papers
Current Issue
Bank Systems & Technology Dec. 2, 2014
BS&T's 2014 Elite 8 executives are leading their banks to success, whether it involves leveraging the cloud, modernizing core systems, or transforming into digital enterprises.
Slideshows
Video
Bank Systems & Technology Radio
Archived Audio Interviews
Join Bank Systems & Technology Associate Editor Bryan Yurcan, and guests Karen Massey and Jerry Silva from IDC Financial Insights, for a conversation about the firm's 11th annual FinTech rankings.