The Banking Backbone Is Dead. Long Live The Banking Backbone

I just returned from a business visit to India, and on the long way back, I had the time to sort out some observations and ideas on the future of the banking backbone that I had discussed with bankers as well as banking platform vendor execs over the past few weeks. But let me start from the beginning.

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eBusiness In Financial Services Serves Two Masters

These days one of the top questions we get here at Forrester is around how best to organize for eBusiness. Should the group report to marketing? Should it report to IT? Should it be centralized, or should it be decentralized? Tons of industry brainpower has been spent thinking about these questions.

The answer reminds me of the old SNL skit for Shimmer where the husband and wife argue about whether Shimmer is a floor wax or a dessert topping, and in the end the announcer tells them emphatically, "New Shimmer is both a floor wax and a dessert topping!" The right eBusiness organizational structure is one that reports to both marketing and IT. Why? Because eBusiness has two masters: eBusiness is both a channel and an enterprise function.

Let me explain. Nobody would argue that the ATM is a servicing channel and not an enterprise function like corporate marketing. On the flip side, nobody would consider corporate marketing a channel versus an enterprise function, which it is, but eBusiness fills both roles in most financial service companies. It is a servicing channel for existing customers looking to servicing their accounts, but it also has a marketing and sales enterprise function along the lines of corporate marketing.

I have recently published a document on the Forrester Web site where I explore the implications of this dilemma in organizing for eBusiness. I welcome any feedback on my approach, and look forward to any more blog posts where I can reference SNL.



PFM Pioneer Wesabe Abandons Account Tools, Sticks With Social

Online personal finance pioneer today announced it would be exiting the account aggregation and online personal financial management (PFM) space. While the unexpected home page announcement caught users by surprise, the site had for some time been struggling to build a larger user base in the face of better funded competitors and bank-hosted offerings from Yodlee, Intuit, and others.  Wesabe had launched its own white-labeled PFM solution for banks last year, but Springboard, as it was known, failed to attract much interest.

Wesabe is not shutting it doors entirely. It will continue to run the community, or Groups, part of its web site, where it had attracted a loyal and very active group of participants. Wesabe had also begun licensing its Groups content to other institutions in 2009. This “community –in-a-can” concept allowed institutions to quickly add a social component to their sites without having to build it from the ground up.  Addison Avenue Federal Credit Union last summer began offering the Groups functionality on its site. 

Company CEO Marc Hedlund noted on Wesabe’s home page today that “competitors have either dismissed the value of community, or have not been able to create a community as rich as Wesabe Groups, so I'm very happy we are able to keep that part of the service going.” Wesabe is getting assistance on that front from one of its current Groups customers.

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