The first email I received at work in 2014 was from a bank; along with a festive new year’s greeting, the email touted the bank’s new mobile app and a new feature that let customers set up travel notifications directly from the bank’s website. Later that day, I was in an airport reading a friend’s Facebook post about how she wished “more apps were like Uber.”
These are just a few small anecdotes about ongoing digital trends impacting businesses and banks both large and small. I recently spoke with a banking executive who put it simply: “Digital is what we do now.” (This quote is now the header of my Twitter feed.)
Forrester recently published our Trends 2014: North American Digital Banking report, in which we identify major forces impacting banks and lay out five actions that we recommend digital strategists take to prepare for the future of digital banking. Here’s a sample of some of our findings:
Banks will face a sustained – yet unclear – regulatory environment. In both the US and Canada, banks are confronting an uncertain regulatory future. The Dodd-Frank Act was signed into US law on July 21, 2010, but a large number of the rules and regulations remain unwritten. It's unclear when they'll be finalized, and the fact that 47% of deadlines have already been missed – according to the law firm Davis Polk & Wardwell – doesn't bode well.
Forrester began surveying global banking platform deals in 2005. For 2013, we evaluated about 1,600 banking platform deals submitted by 29 vendors and located in about 130 countries. Shortly, we will publish the final results of this evaluation. Today, I want to offer some initial trends:
Counted deal numbers are the second highest ever. The number of counted new named deals is the second level we have yet recorded. The number of new-named deals shrunk; extended business deals increased and the banking platform market grew.
The banking platform market shifted gears again. Top 10 vendors still represented the vast majority of new named deals that we counted, but fewer vendors than in 2012 enjoyed more than ten percent of all counted deals.
Banks' total assets indicate three vendor categories. One group of vendors won very small banks only and another group’s projects reached up to medium sized-banks. Only six vendors’ clients touch the total assets range of tier 1 banks (and go beyond it).
All the details will be available with a series of forthcoming reports focusing on the success of the participating vendors, the regional success perspective, as well as delivered functionality. If you do not want to wait: I will share some of the results during a Forrester Teleconference on February 27 As always, let me know your thoughts: jhoppermann (at) forrester.com.
This week, IBM announced its new line of x86 servers, and included among the usual incremental product improvements is a performance game-changer called eXFlash. eXFlash is the first commercially available implantation of the MCS architecture announced last year by Diablo Technologies. The MCS architecture, and IBM’s eXFlash offering in particular, allows flash memory to be embedded on the system as close to the CPU as main memory, with latencies substantially lower than any other available flash options, offering better performance at a lower solution cost than other embedded flash solutions. Key aspects of the announcement include:
■ Flash DIMMs offer scalable high performance. Write latency (a critical metric) for IBM eXFlash will be in the 5 to 10 microsecond range, whereas best-of-breed competing mezzanine card and PCIe flash can only offer 15 to 20 microseconds (and external flash storage is slower still). Additionally, since the DIMMs are directly attached to the memory controller, flash I/O does not compete with other I/O on the system I/O hub and PCIe subsystem, improving overall system performance for heavily-loaded systems. Additional benefits include linear performance scalability as the number of DIMMs increase and optional built-in hardware mirroring of DIMM pairs.
■ eXFlash DIMMs are compatible with current software. Part of the magic of MCS flash is that it appears to the OS as a standard block-mode device, so all existing block-mode software will work, including applications, caching and tiering or general storage management software. For IBM users, compatibility with IBM’s storage management and FlashCache Storage Accelerator solutions is guaranteed. Other vendors will face zero to low effort in qualifying their solutions.
When my teenage son is interested in purchasing a mobile phone, some PC equipment, or a games console, he will typically spend weeks gathering the necessary information to arrive at a well-informed decision. He once told me that he feels this is necessary to make the best use of his savings — a trait that I do not always observe banks around the world exhibiting.
Recently I had a phone call with a few people from the business side of a medium-size bank somewhere in the world. Their challenge? They wanted to use the best method to find the mobile banking application most suited to their bank. Their real challenge? They had no time to make a deeper assessment of their individual business and technology situation and only wanted to get proof that their approach would be the right one. They wanted a clear recommendation within a few days.
Unfortunately, it’s not that easy. When I know nothing about a bank’s business environment, its supporting application landscape, and its underlying technology, I am very reluctant to offer more than a long list of business applications, regardless of whether the topic at hand is mobile or cross-channel solutions, core banking, or something else. This is in line with a research report about best practices for banking platform transformation that Forrester published some time ago. At the time, we identified a few key reasons common to major banking platform transformation failures. One of those reasons: ill-designed shortcuts.
[note: this was written live last week while I was attending Finovate]
Greetings from the Big Apple! I’m here attending the fancy schmancy Finovate Fall 2013 conference featuring tech solutions and innovations from – and for – the financial services industry. Here are some of the offerings and presentations that stood out for me, in the order they were presented at Finovate:
Kofax offers process automation software for lenders, but the big takeaway for me was their recent expansion of mobile, cross-channel, and multichannel analytics for financial providers. Focused on how customers shop for a loan, the dashboard and data are digestible and actionable. The jury’s still out, but strong analytics and easy-to-use tools can help banks improve sales in their lending lines of business.
MoneyDesktop offers digital money management tools – also known as personal financial management or PFM – and their demo at Finovate continued to show their strengths: Nifty tools, clean design, and intuitive UI and UX. The question mark for banks, however, continues to be how well integrated – or better yet, embedded – the experience can/will be for end users.
Forrester’s latest survey on financial services architecture shows that financial services firms in general, and banks in particular, put a high priority on a few selected topics (see the figure below). Our banking-specific research for AD&D professionals has focused on topics like banking architecture, banking platforms including core banking, Internet and mobile banking (to be published soon), and multichannel enablement. Forrester’s more industry-neutral research has covered aspects such as analytics, business intelligence, big data, customer relationsship management and other, less industry-specific, areas of business applications.
We have also started preparing a report about the key building blocks of today’s risk management solutions. However, my recent discussions with Forrester clients have covered plenty of additional topics, including anti-money-laundering, branch apps, private wealth management, lending in retail/consumer banking, corporate/commercial lending and its syndicated flavors, mortgages, trading, and treasury, just to mention a few.
In advance of Forrester's Summit for CIOs in Singapore on August 30, I had an opportunity to speak with Paul Cobban about his successful transformations at DBS Bank over the past few years. Based in Singapore, Paul oversees business transformation, operational excellence, customer experience, IT project office, procurement, real eastate, operational risk and business continuity management. I've had a sneak peak at his event presentation and it is excellent. Paul is a progressive CIO at the forefront of BT innovation and business engagement with a lot of valuable insight to share.
1. What do you think IT departments are doing right and wrong these days?
In banking the IT departments have had to change enormously in recent years. On top of the usual relentless advances in technology, security challenges have escalated, the war for talent has accelerated and regulation continues to evolve with the challenges. I believe that IT departments have had to adapt well to these changes.
However, in most companies there is a lack of a truly customer centric design. Although there is some hype in the industry around service-oriented architecture (SOA), I believe that until budgets are allocated around customer processes rather than by functional units, systems will continue to be designed as applications for the department users rather than with the customer in mind. In addition, most companies fail to take usability seriously and have little concept of cross touchpoint consistency.
Late last year, Forrester reviewed and ranked the secure websites of the 12 largest retail banks in the US and Canada. The full reports can be found here (US) and here (Canada). Overall, banks' secure websites earned an average score of 70 points (out of 100), demonstrating a level of quality that meets customers expectations but also leaves room for improvements. Here are some of the highlights:
Citi moves to the top of the US rankings with a website overhaul. In July 2011, Citi launched its first tablet banking app. Based in part on insights gleaned from that process, the bank rolled out a newly redesigned secure website, followed by additional digital features and functionality for online bankers, mobile bankers, and tablet bankers. As a result, Citi moved from second-to-last in our ranking to the top spot this year.
RBC pulls off a historic sixth-straight win among Canadian banks' secure sites. For a record sixth year, RBC earned the top spot in our Canadian rankings. Two factors drive RBC’s digital banking success: First, the bank's secure website offers a wide array of secure site features, including eBills, tax management tools, and more; second, the bank continues to innovate, this year adding customizable money management dashboards and new mobile features such as foreign exchange and mortgage payment calculators on its iPhone app.
Royal Bank of Canada (RBC) leads all of North America.RBC again took the top spot in the 2012 Canadian Bank Digital Sales Rankings, scoring 77 out of a possible 100. It continues to tweak and improve an already good design; the bank started a major redesign in 2009. RBC continues to excel in areas big and small: For example, the firm presents fulfillment options in an easy-to-read format (see screenshot below). In 2012, Royal Bank of Canada improved its navigation, content, and online application functionality, and its score for 2012 reflects that improvement.
Citi and Wells Fargo top the US banks.Citi and Wells Fargo topped Forrester’s 2012 US Bank Digital Sales Rankings by delivering on multiple levels. Both banks combine good usability with exceptional account-opening processes. For example, Wells Fargo uses presentation best practices to make its checking account fees clear to customers and prospects (see screenshot below).
During the past decade, I have worked with many analyst relations (AR) people as well as specialist AR firms. I have never blogged about them in the past, and I have no intention to do so in the future. Earlier this week, however, I saw that an employee of one of the specialist AR firms authored and published a comment on my most recent report: “Global Banking Platform Deals 2011: Functionality”.
This comment gives the impression that my report only provides common wisdom in that it only suggests that “one of the key differentiators for system selection is a strong track record.” The author also explains that this “may be at odds with the current market landscape as new regulations are set to change the way that the capital markets work and vendors are all developing new functionality to cope” – just to mention a few examples.
My perception is that the author either did not read my entire report or preferred to focus on the six-and-a-half-line summary of an eleven-page report – with a comment that is longer than the summary. Why this perception? First of all, the report is about banking platforms, and Forrester’s definition of banking platforms does not even mention capital markets. More importantly, I do not disagree at all with the author’s statement as far as the relevance of supporting new regulation is concerned – just the opposite, albeit more from the perspective of retail/consumer, private, or corporate/commercial banking.