I can think of lots of cliches that apply to the basis for this blog, but unless you live under a rock, you must have heard them all by now. My observation of good resulting from bad comes as I work on the 2010 Edition of my annual research report, "Automation in Banking." The equation that came to me is:Distressed Banking + Flat Tech Vendor Revenues = Increased Product Development
The bank tech market is so rich and robust today (I'm even picking up on vendor jargon) that one can see it by just looking at the numbers. You've heard me say there are 132 pieces to any bank's technology pie. That's still true, but what has changed are the variations, versions and comprehensiveness of those pieces. For example, Cash Management is as old as the hills. So why did Fiserv present nine offerings in that category? Because current-day bankers are smarter and more analytical than they used to be and they won't settle for one-size-fits-all technologies. FIS and Metavante became one last year. Instead of choosing best-of-breed between the two and swinging the proverbial cleaver on the rest, they presented a take-your-pick approach to include any bank, anywhere, any size, any style - in the Risk Management category alone, FIS presented 20 solutions. Is that a sign of the times?
If times weren't so bad, tech vendors might still be working on mundane matters such as, for example, a CD interest accrual algorithm pegged to LIBOR. Here are the numbers as they apply to the pieces of the bank tech pie:
Core software for in-house operators - 73 brands Core processing offered as an outsource service - 21 companies ALM/profitability solutions - 6 Platform automation solutions - 12 Check imaging and processing solutions - 15 Core software operating in large bank environments - 18 brands Internet-based solutions - 14 ATM, debit card, credit card, ACH, loyalty, safety solutions - 14 Document imaging solutions - 7 Telephone banking solutions - 6 Mortgage-related solutions - 10 Insurance and securities industry solutions - 2 Customer relationship management solutions - 9 Cash management solutions - 15 Data warehouse solutions - 6 Compliance solutions - 16 Electronic payments solutions - 22 Personal trust accounting solutions - 3 Risk management solutions - 34 Business intelligence solutions - 18 Remote deposit solutions - 11 Mobile banking solutions - 9 Consulting services - 5 companies One-of-a-kind solutions stacked in the miscellaneous category - 32 solutions Core software offered in international markets - 7
If all the above isn't enough for you, there's more to tell about this year's learning experience. Even though there are 81 companies in my report, there's also a hidden vendor supply which I identify in one exhibit because I believe in full disclosure. Exhibit 70 lists 19 bank tech companies that do not appear in my report. They were invited several times because I believed they had something good to offer, but they declined. They are good companies, but for reasons that only Andy Grove (author of "Only The Paranoid Survive" and founder of Intel) could explain to us why they chose not to be included. Add their goods to what I published and the point is even stronger. As an aside, and as further evidence of why I refer to my report development project as a learning experience, the largest group of non-responders were compliance and data security vendors. Maybe they were worried about identity theft.
There isn't one link missing on this chain of resources to keep bankers safe, sound, prosperous and appreciated by their customers. The only thing bankers have to do now is to stop biting their nails and buy the remedies.