Supersized 3 Technologies That Should Loom Larger in 2006
Swann, Nicole Leigh, Independent Banker
When they're puppies they're cute, when they're bulldogs they're fierce. Today's leading technology vendors got where they are by marking their territory and defending it ferociously-using both brains and brawn. They've acquired, partnered and integrated their way to solvency. And researched, developed and enhanced their product set to woo customers.
Given their knack for getting the job done and taking the chances community banks can't afford to, Independent Banker contacted leading community bank vendors to get their picks on sound technology investments.
Most of the trends they cited aren't new. Some, previously picked by pundits, are finally bearing fruit. Some are borne out of existing technology. And still others are sharing a revival after failing to deliver on their hype the first time around.
While their products and services, as well as their approach to market differed, most cited the following as technologies to watch in 2006 and beyond (in no particular order):
* Check imaging and all things related;
* Data integrity/security/fraud prevention; and
* Business analytics/customer profitability.
Imaging to Take Flight
"We've certainly made a lot of investments over the last year in areas that we think will be of significant demand," says Tom Walsh, general manager of marketing and industry research for the Monett, Mo.-based technology vendor and core processor Jack Henry and Associates. Specifically, remote merchant deposit, which Walsh says is "leapfrogging" remote capture at the branch as the hot new item in the check clearing space.
"We think that will continue to grow and really be part of a propellant that will accelerate Check 21 adoption and image clearing," he says.
Executives at Jack Henry also expect to see an overall jump in image exchange networks, says Walsh. "It's still in its infancy, but as the networks get together and agree on the standards, we'll see the adoption of Check 21 increase." (See related story, page 72.)
About 10 percent of Jack Henry's core customers have signed agreements to deploy image-clearing capability. But there are still hurdles, mostly as they relate to costs, admits Walsh. "Banks are looking for a tipping point. As more banks get engaged, that tipping point is much closer."
RCB Bank in Claremore, Okla., has been an imaging shop since 1996. From day one, the product has received "good reception" from commercial clients, who've gladly traded the nominal expense for the scanner machine to capture the image in lieu of having to make daily or weekly trips into the bank, says Tom Bayless, chief financial officer at the bank.
There are about 20 merchant customers in the pipeline for the service, a figure Bayless hopes to grow between 300 and 500 in the next couple of years. As far as geographic restrictions, Bayless sees none. "One of the first [new commercial account] relationships we picked up was a customer in Houston. We had a loan relationship, but could now secure their main deposit relationship," he says.
RCB Bank has also implemented remote capture at the branch, which is in testing. In both instances Bayless says the bank was looking for integrated versus interfaced systems, which played a large part in the bank's decision to use its core processor, Jack Henry. "In each case, the files were going to our [pay on demand] system," he explains. "It would have had to be rewritten if we weren't dealing with the same player."
Another area ripe for innovation is data security/fraud prevention, community bank product and service providers agree.
Security and risk management clearly is an area that banks are investing heavily in to ensure they are in compliance and mitigate risks associated with the electronic environment, says Tom Sizemore, senior vice president and chief information officer for Lincoln, Neb.-based Fiserv ITI. "In the near term, one area which will see a lot of emphasis is multi-factored identification. …