Content posted in March 2006
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Forget offshore outsourcing. The best way for bank tech companies to improve earnings is to dump their marketing departments
By Art Gillis
I am currently in the process of interviewing bankers about their experiences with their tech vendors. The reason is simple. Today, smart bankers buy their technology and, therefore, vendors are a critical piece of their performance equation. So as the vendors go, so goes the performance of technology in the banks. I'm delighted to report that customers are singing the virtues of their vendors these days. And they're doing it far better than the marketing departments of their
There were 2.34% fewer banks at the end of 2005, but there's still a branch on every corner
By Art Gillis
The trend has been consistent for at least the past five years. On average, there have been 2.7% fewer banks each year. The decline would have been larger if it wasn't for the de novos that entered in high growth states such as Texas and Florida (I haven't been to Iowa since 9/27/1993). During the past five years, an average of 140 de novos per year were established. About fifteen years ago, prominent industry pundits were predicting there would be 2,000 banks in the U.S. So
The Next Generation
Demographics is destiny, and in this month's issue, my colleague Marianne Kolbasuk McGee from InformationWeek lays out the undeniable facts: We're all getting older.
A Teaching Tool for the Masses
JPMC deploys solution to ease training.
New Products
NCipher Secures Data With Encryption; TIBCO Enhances Development Tool; S1 Upgrades Teller Offering
Reporting for Duty
Searchspace monitors transactions at Nedbank and reports on money laundering activity.
Easy Money
First National Bank automates its lending process with Fiserv's easyLENDER.
The Top 10 Information Security Myths
If you buy into all of these commonly held beliefs, you'd better believe your data is at risk. We separate the facts from fiction.
SEPA: Time to Light the Fire
As the deadline looms, all SEPA stakeholders need better collaboration and coordination.
Originating Relationships
Mortgage bankers are mining and analyzing data to get a bigger bang for their relationship buck.
Supporting the Front Lines
First Tennessee Bank ($36.6 billion in assets), part of First Horizon National Corp., boasts that it has one of the highest customer retention rates of any U.S. bank.
Hidden Opportunity
Wells Fargo leverages Basel II solution from Reveleus to create business value.
Help Those Who Help Themselves
Customers are demanding more self-service functionality, creating an opportunity for innovative banks.
Will the U.S. Embrace Cell-Phone-as-Wallet?
Prospects for mobile wallets in the U.S. grow despite doubts.
Keeping Older Tech Workers on the Job
Older workers can fill skills and staff gap.
Sticking With the Tried and True
Large U.S. banks still avoid full core systems upgrades.
New Opportunity in Check Conversion
Fed rule paves way for back-office processing by merchants.
Former FTC Chair Defends Card Industry in House Testimony
Merchants claim they seek transparency and competition in interchange rates.
Commerce Enhances the ’Convenience Experience’
Bank's free offerings now run the gamut from coin counting to online wealth management.
You’re Wearing That?
Just like lapels and skirt lengths, management concepts go in and out of style.
In Midst of RFID Virus Scare, Contactless Payments Remain Sound
Visa weighs in with its take on security of contactless card payments.
Fuggetabout the shape of the world - look at the people
By Art Gillis
It's nice to be in a city (Dallas) that is populated by big technology companies - EDS, ACS, Perot Systems and even a branch of CSC. One reason is we can get prominent
execs to speak at the Institute of Management Consultants meetings conveniently. They can sleep in their own bed that night. So when I heard a most stimulating and informative presentation from one such president, I couldn't help sending a follow-up e-mail. Too many of my esteemed colleagues had corralled the p
Strong profit margins for bank tech vendors - Wall Street loves them, stockholders get richer, CFOs get a dose of job security, but customers wonder if it's at their expense
By Art Gillis
It was about a year ago that I read a vendor's press release about their ability to generate higher profit margins than any other competitor. Any student of P&L 101 could make a fair analysis of the cause and effect. Keep prices high and cut costs to the bone. And even though deserved from an accountant's point of view, the press release was a stronger demonstration of boldness than Rod Tidwell screaming at Jerry Maguire - "Show me the money." The only people I heard from after
If you were a tech vendor, would you wish that 36 percent or 64 percent of your market would go away?
By Art Gillis
There are now 37 companies in the bank tech business that provide core applications solutions.
Twenty of the solutions are for outsource services. Seventeen are for in-house solutions. Eleven companies provide both modes, and it didn't take a genius to figure out why. Sixty-four percent of all financial institutions use the in-house mode. Thirty-six percent outsource. That's the way it is and that's why smart vendors chose not to fight reality. But only 30 percent of the 37
SOAs Creating New Security Risks
The Symantec Global Security Consulting division recently has spent much of its time cautioning its clients about the security risks associated with third-party services.
Have a plan, even if it's on the palm of your hand
By Art Gillis
I still can't get Spring Break off my mind, even though I am hard at work now. But I can justify the diversion because of the lessons I keep learning no matter where I am. I spent a lot of time on the beaches of South Florida last week, and after my swimming-for-joy in the blue/green water of the Atlantic, it was a good time to see what was going on. By the way, my wife and I sneaked away because I had a perfect window. If I knew it was Spring Break though, I would have waited
Words From the Closet. Bankers Mouth Off
By Art Gillis
I don't like surveys because respondents generally answer according to expectations, ego and "how fast can I get rid of this task?" In other words, survey responses are a collection of lies. But in this world of change, I decided I had to conform, so I did my first-ever survey. What influenced me most was that I knew the population. They were bankers who had sent me money for some reason and I thought for that reason they would be truthful. Five hundred and fifty something ba
IBM Offers New SOA Software, Services
IBM unveils software and services for organizations adopting a service oriented architecture, a form of standards-based distributed computing.
From Family Dollar to Williams Sonoma, there's a toaster for everyone. The same is true for bank technology
By Art Gillis
I admit to being somewhat of an elitist regarding appliances. We have a toaster at home that reminds me of a 1956 Buick Roadmaster. The price was $239.95. While on Spring Break last week, I drove by a Family Dollar distribution center that could have housed every used Wang word processor ever built. It was massive. On the rest of my trip, all I kept noticing was a Family Dollar store in every strip mall. I have a feeling that toasters cost $9.98 at Family Dollar. Both machi
The Dark Side of Open Source
Open source software may be free to download, but the lack of external support -- and internal communication -- can be costly.
NACHA Takes a Page From PayPal’s Playbook
Payments org plans to pilot program for more private online transactions.
Experts refute RFID virus claims
The trade association for automatic identification and mobility, AIM Global, refuted the main findings of an IEEE conference paper presented earlier this week that suggested RFID tags could be used to corrupt databases and even potentially to spread computer viruses.
It ain't about DDA systems anymore
By Art Gillis
Thirty years ago, banks were hurting because the basic core applications were weak and lacking in, the now famous overused brochure word, robustness. Today one DDA system is like any other. That goes for any core application save maybe commercial lending. So how do banks choose a better core system? By looking at the applications surrounding core.
An example of that presented itself during my program called, "Makin' the Rounds." Some people call it, "Ya gotta get out more."
Citigroup Names Bottega CDO
Citigroup is the first FI to formally create a c-level data executive position.
Chinese Bank Hosts Phishing Site
Hits Chase, eBay customers.
Redirection: The Next Generation of Phishing Attacks
Two banks learn the hard way about scammers' new strategy.
Identrus Undergoes Sweeping Makeover
A name change and new execs usher change in strategy.
Lessons to Learn From Citi Data Breach
Questions around security policy arise in aftermath.
Chinese Bank Hosts Phishing Site
Hits Chase, eBay customers.
Actors, generals, lawyers, athletes, even business tycoons have joined the ranks of political life
By Art Gillis
......But it is quite rare for a professional IT executive to cross the line into the arena of diplomatic service or politically correct behavior. And there's a very good reason for that. The worst thing any serious and responsible IT person can do is sugar coat the truth about any tech-based solution, and that's why the typical IT guy couldn't make it in politics. Even the most successful and financially powerful IT entrepreneurs would never make it in the world of politics.
International Citibank Customers Shaken By Data Breach
Bank halts PIN-based transactions in three countries after customer data is compromised at a third-party company.
/articles/i/ad1835/blogs/information-technology/appro-wins-government-computing-contract.htm
Attorneys author compact guide for bankers' security concerns.
Banks, FSTC to Create Biz Continuity Measures
Trade group leads effort to establish resiliency standards.
I've heard of the perfect storm, but never the perfect bank tech company
By Art Gillis
I should tell you that the day I graduated from college I thought the word "perfect" was going to be the basis for everything I was going to do in my work. When I reported to my first "job" as a second lieutenant at SAC Hq., ready to automate the financial services division, I began to soft peddle the word "perfect." Today the word cannot be found in my lexicon of business language, although I can still find uses for it in other parts of my life. OK, I've set the stage, so what
Business Intelligence Spending Spree
Companies have big plans for business intelligence, says an InformationWeek Research survey, but they have a long way to go before those plans become reality.
Wanted: Eight world series-type bank tech salespeople
By Art Gillis
A previous blog here reported there are 130 large banks in the U.S. - the obvious commercial banks, 9 s&ls, 2 credit unions, and a few near-banks. "Large" starts with Citigroup and bottoms out at 13 $8 billion banks. What I didn't tell you is that only 15% of that group outsources its core processing. But looking closer, a sharp eye can see a pattern. Within a group of 45 banks ($14 billion to $48 billion), 33% outsource core. Why does that group like outsourcing? I have no
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