Banks Begin to Tap the Web's Potential for Internal Change

By Orr, Bill | ABA Banking Journal, December 2000 | Go to article overview
Save to active project

Banks Begin to Tap the Web's Potential for Internal Change

Orr, Bill, ABA Banking Journal

Some call it "webizing." The results can be far more dramatic than online banking has been so far

"The Internet will change everything!" web evangelists have been telling us for the past five years. Bankers have mostly been looking at the marketing side for signs of transforming changes in the delivery of financial services. True, we have internet banking and bill paying, but 80% of banks don't offer it yet and 90% of consumers don't use it yet. However, the internet revolution is happening in business-to-business (B2B) interchanges.

And there's another frontier: "webizing" internal operations. Today, only the biggest enterprises are exploring new ways to handle their internal processes. Few bankers are even aware of the potential benefits.

But using the web to integrate the flow of external and internal operations is surely the way the business world is going.

Evangelists call it creating an information ecology -- the natural habitat of shifting alliances of added-value providers.

A company-wide, information web-based network integrates internal technical resources and business logic with information from customers, vendors, and trading partners. When integration stops at the edge of the enterprise, it's called an intranet.

It becomes an extranet when it also embraces the extended family of players--who could be anywhere on the globe.

Standards are a must

To have a truly "seamless" extranet, there must be links between the bank's legacy information system and an ever-growing array of applications. While some of these applications are home grown, others come from outside application service providers (ASPs). Add to this the collection of applications and platforms resulting from mergers and acquisitions, and the need for solutions that function on any type of computer "platform" becomes an imperative. This can't happen without a commitment to open standards throughout the enterprise.

"Above all, don't stray from the standards path or you will pay dearly," warns David Orr, consultant to the e-commerce division of Liberty Financial Companies in Boston. This means using platform-independent software tools such as Java and XML, along with standard protocols (chiefly J2EE) for integrating data and business logic from hither and yon into the firm's information architecture.

The two keys to success in building a comprehensive system are 1. handling transactions electronically from start to finish--also called end-to-end or straight-through processing (STP); and 2. presenting a single view of all of a customer's accounts (internal or external customers). This is according to Bridget Piraino, director of global financial services marketing for SeeBeyond Technology Corp., formerly STC, a Monrovia, Calif.-based firm specializing in e-business connectivity.

For SeeBeyond's client ABN AMRO, getting a comprehensive view of its cash management position, in multiple currencies, in a single country, means processing some 60,000 transactions per hour in real time.

Go for quick wins

William S. Finkelstein, a senior partner in financial services at Cisco Systems, says that banks can save from 7%-24% of noninterest expense by applying what he calls e-business principles to everything that an enterprise does. No stranger to innovative banking, he helped Wells Fargo and Bank of America become first and second in the number of Internet banking accounts. Cisco Systems-- for a few shining days the world's most richly capitalized company-- makes routers and switches for communications systems and advises clients on how to create enterprise-wide e-business systems. Cisco itself is a good model of a thoroughly Web-enabled enterprise. And it's paying off handsomely, Finkelstein says.

In fiscal year 2000, Cisco will save $500 million on its customer care (call center) operations. This will come from reducing the call volumes.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Cite this article

Cited article

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Banks Begin to Tap the Web's Potential for Internal Change


Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?