A slew of tech developments give banks more options than ever, and maybe banks work smarter as a result
Cell phones, PDAs, XML, and internet payment gateways. PDF, e-CRM interfaces, IVR systems, and VRU systems. Business rules. Relational databases, thin-clients, and web-based ATMs. Straight through processing. Transactional websites, middleware, and ERPs. Knowledge management systems. Digital signatures and PKI security.
Whatever else we know about technology and the new economy, it's clear that neither is short on acronyms or new computing paradigms." In evidence, too, are profound new ambitions. Instead of simply selling products or services, banks are directed to give retail and corporate customers the "experience" of financial control, of easy to use channels, of advice, and personalized care.
But there's another experience that most brush under the rug. That's the daily grind of working with the systems at your bank. Tellers, call center agents, and middle management might well snicker at the organization described at the board table or in the annual report, knowing full well that they resort to all methods of workaround to get the job done. Meanwhile, bank management keeps adding to the complexity and institutions are spending more than ever. Cap Gemini Ernst & Young says that last year's discretionary spending on technology for e-commerce alone topped off at 27% of total budget among banks surveyed for a report it recently published. That figure is projected to rise to 34% in 2000. In light of that, it may be time to stop and evaluate.
So, ABABJ asked the question, is the technology a diligent silent partner or a high maintenance source of distraction? Querying professionals -- that install, integrate, purchase, or consult about, systems--about various forms of automation on their technology "picks and pans," shows a mixed, but by no means negative, track record for the automation revolution.
Why we're better off
The sheer volume of gadgets and systems in banking begs the question, are banking organizations working better, smarter, more profitably? "I think it's a good question, and I think the answer is, 'yes, absolutely,'" says Sandy Devine, managing director of the financial services business unit with Sapient, a consulting firm in Washington, D.C.
Then why the griping you hear--at least some of the time? "Most of us are perfectionists that measure today's activity against [our vision of] the possibilities for the future," she says matter of factly. She explains that the excess capacity predicted for banking has largely come to pass, making it tough for consolidation's survivors to make further efficiency gains.
"But there is a countervailing force in the industry having to do with providing personalized service. To the extent banks can capitalize on customer need in an individualized way, they can grow grow the top line." And regarding efficiencies, Devine points to loan application processing (including credit scoring) as one area where she sees less paper in the banking offices she visits, radically faster processing times, and less redundant processes.
Andrew Wickey, vice-president of consulting firm Martin Progressive, New York City, agrees that there's proof of progress. "We're too productive," he jokes, pointing out that the advent of thin-client computing is one example of technology's enhancement to operations. Because it effectively recentralized data and applications for easier deployment, financial institutions can make easier upgrades. "For a recent upgrade at Salomon Smith Barney, we [essentially] pushed Microsoft SMS-based sales applications from the Long Island City-based office out to 400 retail branches [for their consultants] in a weekend. That you can accomplish that kind of work in IT is amazing."
But, admittedly, not everyone, or every aspect of technology, is so positive. One favorite target of derision, at least off the record, is the data warehouse. …