Anticipating the Future
Julie Elberfeld, Commercial CIO, Capital One
As consumers are becoming more technology-savvy banks must adapt their approach to digital platforms. We need to anticipate where technology is going in today’s rapidly changing environment and quickly adopt those solutions that best fit our industry and consumers. Customers have become accustomed to having technology at their fingertips, so we have to be more nimble in adopting and introducing emerging technologies. In commercial banking, for example, developments in portal technologies that offer enhanced data analysis and reporting are major areas of investment. Anticipating where the market is heading, how technology is evolving, and innovating ahead of our competition—both other banks and non-traditional competitors—while meeting growing security, regulatory and compliance requirements present challenges.
Banks need to focus on a structure that is scalable yet nimble and able to support future growth and increasing needs of the business. At Capital One, we’ve moved to an architecture that supports our “always on” approach to enable our customers to bank whenever and wherever. We have to deliver with increased speed and efficiency while defining the role of big data and cloud computing in our solutions. Talent acquisition continues to be important. Candidates don’t often think of a bank as a place for great IT talent – but banking is essentially an IT-lead industry and software development will become a huge need in banking. At Capital One, we have a huge appetite for the best technology minds. Banks need to show that they have the environment where tech talent will thrive and where they can get to work on the very best, latest technology.
Mobile is the Word
Doug Brown, SVP, Mobile Solutions, FIS
For financial institutions, the magic word in 2013 will be mobile. Bank customers are turning to the ease and convenience of their smartphones and tablets for mobile banking, payments and check deposit. Managing this seismic financial shift will prove challenging for bank IT departments, but those with a dynamic mobile strategy will enjoy a significant competitive advantage from those without.
Here’s the outlook next year for key elements of mobile for banks:
Scalability: Adoption of mobile will continue to soar. At FIS, organic growth in mobile banking clients is rising 50 percent annually, and the frequency of logins by mobile users is 1.5 times greater than for their online counterparts. Banks’ technology infrastructure must be ready to serve these mobile users and meet the transaction-volume challenge.
Devices: Major mobile device manufacturers are preparing major mobile product releases. New tablets will change the consumer-electronics landscape and smartphones will incorporate significant operating system and feature changes. Bank IT departments should commit 2013 budget to cope with this proliferating number of devices.
Functionality: Mobile offers a powerful model for banks to pare costs and propel revenue. Businesses will look to their IT partners to provide myriad services instantly through the mobile platform. FIS predicts mobile commerce will drive this urgency as banks counter new nontraditional competitors.
Security: It remains customers’ No. 1 concern about mobile banking. Attacks on banks’ mobile infrastructure and client devices are accelerating, explaining why security cap abilities and processes will play a larger role in a bank’s IT agenda.
Integration: Businesses will accelerate requests to their IT partners to integrate capabilities. They will seek multiple bank backend systems that deliver an intuitive mobile customer experience. They also will favor increased use of third-party specialists in mobile commerce and social media to deliver mobile capabilities. In 2013, a more heterogeneous and extended infrastructure to support mobile will become a top priority for bank IT.
Mobile will spark IT challenges for banks to meet their customers’ shifting needs, and banks must develop a winning IT strategy to manage the new mobile ecosystem.
DDoS — An Attack on Consumer Confidence
Alphonse Pascual, Industry Analyst, Security Risk & Fraud, Javelin Strategy & Research
Trust is at the heart of the relationship between a financial institution and the consumer. The massive distributed denial of service (DDoS) attacks that successfully crippled bank websites in 2012 also had a direct impact on the affected banks’ customers. In the past, consumers have shown a willingness to trust in their bank’s ability to protect their financial information, but continued success on the part of the attackers in 2013 could very well change this perception.
The hacker group responsible for the aforementioned attacks, Izz ad-Din al-Qassam, forewarned of their intentions and delivered on their promises. Targeted U.S financial institutions, or the so called “American Zionist Capitalists”, have been placed on notice by these hackers on multiple occasions since September 2012 via public posts on Pastebin.com. While communication about the group’s known attack vectors between targeted institutions has facilitated a level of success in mitigating these attacks, that success has been uneven as many banks continue to suffer website outages.
As a result of these website outages, consumers have at times been unable to access their own financial accounts. Javelin research shows that financial institutions are held in the highest trust by their own customers; but overall, brands such as Visa and PayPal garner better consumer trust numbers than other financial industry players (28% and 23% of all consumers, respectively), and they currently rate above non-traditional companies such as Amazon, Apple, Facebook or Google.
In the coming year, if consumers begin to perceive that the inability to access their financial accounts also means that they are less than secure, the resulting flight to safety will be a migration of consumer financial activity from the affected banks to trusted alternative solution providers. Criminals will have succeeded in doing what the financial crisis of the last decade could not – convince consumers that their own banks are no longer safe havens and that it is time to move their business elsewhere.