Academic journal article ABA Banking Journal

Don't Be a Technophobe

Academic journal article ABA Banking Journal

Don't Be a Technophobe

Article excerpt

Many banks use the last month of a year to focus on problems and opportunities for next year.

1994 could be a critical year.

Topics on bankers' minds are: recapturing market share; managing a quirky interest spread; how much to-- or should we?--diversify; measuring and meeting competition; upgrading customer services; and several more.

But what to do about technology is one of the most worrisome concerns and also can be the most opportune area for sound planning.

Nearly all banks have developed a computer capability with an in-house system or a service bureau or a link with a network or correspondent bank. All banks have gone through the hassles of conversions, new programs, need for new hardware, and concerns about costs and efficiencies. They dread major revisions of software or hardware.

But the impact of innovations in technology could have the greatest impact on the profitability and stability of banks in the next decade.

Take imaging and optical disk technology--it can make you queasy or leave you quizzical or provide a quantum leap ahead.

It can replace microfilm. It can give you the front and back of checks instantaneously. It can eliminate tons of paper. It can change your proof processing. It can save you money. It can scare (repel) some of your customers. Those are some of the points made about this new process.

To see one optical disk hold all transactions of a bank for one year is amazing. To realize that it can eliminate up to 90% of the paper previously used is a very pleasant prospect.

How to proceed? Ask questions-- lots of them. Start with basic, tough ones: What business are we in? What business should we be in--or do we want to be in?

If you answer, "we are in banking," many consultants will say, "That's only a partial answer; 'banking' has become generic rather than a clearly identified enterprise. …

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