A Check On 5 Banking TechnologiesBy Mel Duvall Print
Service-oriented architecture has helped financial firms such as TD Banknorth neutralize integration headaches and make their legacy applications more responsive to customer needs.
A Check On 5 Banking Technologies
Bank branches were supposed to go the way of the dodo bird, most industry analysts said five years ago. Technology, in the form of online banking, more advanced automated teller machines (ATMs) and sophisticated telephone voice response systems, would make a visit to the branch unnecessary. On the contrary, banks opened thousands of new storefront-type branches nationwide in the hopes of securing more profitable lines of business such as mortgages, credit cards and insurance products.
The resurgence of branch banking wasn't the only surprise. There are five technologies that analysts thought would bring major change to financial services firms, but which, for the most part, have yet to make much of an impact.
- Smart cards. Instead of carrying around credit, loyalty-shopping and bank cards, technology in the form of a single card with an embedded computer chip would allow consumers to consolidate this data onto one smart card. Use of such cards remains a rarity. Why? While there have been
technology obstacles, the greatest reason is perhaps turf wars, says Mark Greene, general manager of IBM's global banking unit. Each bank, each credit card company and each store wants to own the customer experience.
- RFID-based banking cards. With an RFID bank or credit card, consumers would approach an RFID-enabled vending machine or cash register and key in a passcode to pay for their items—no more card swiping. For now, however, RFID technology is still cutting its teeth in areas such as supply chains.
- Mobile commerce. Forget having to visit a branch; consumers would do all of their banking by cell phone. Banks have initiated telephone-based voice response systems. Yet, many consumers still prefer to stop at an ATM or visit a branch.
- Internet banking. Access to banking and financial services over the Internet is available.
But consumers concerned about online security have limited their use of these services. Jim Adamczyk, a senior executive with consulting firm Accenture, says banks have introduced more secure banking features over the last year.
ING Group, for example, lets customers choose pictures, such as a basket of oranges, to personalize their banking home pages, making it much harder for fraud artists to copy.
- Improved customer relationship management and business intelligence. This technology is making the biggest difference to date. By integrating back-end banking systems, such as savings and checking accounts, with credit card accounts, mortgages and other products, banks are able to get a complete view of their customers. In so doing, they can serve clients without having to direct them to multiple employees, and can better predict what products customers might be likely to need next.—M.D.
NEXT PAGE: Financial Services Then and Now
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