80% of U.S. Banks Are Low-Intensity Banks When it Comes to Using Technology

Definition: a low intensity bank uses its IT system or outsourced service to do accounting, just like the old ledger card machines used to do. So if you should go to the back room of such a bank after 7:00 PM, you'll see: (1) item processing to get all the transactions into the core system, (2) posting transactions and updating customer accounts, (3) transmission of EFT transactions to connect with the outside world, and (4) regulatory reporting to satisfy banking laws. At the end of that run (three to four hours for a small bank), a banker will feel good if the debits and credits balanced, if the customer accounts were ready for business at 7:00 AM, and if the call report went out. If a bank didn't do these basic things, the chain and padlock would be on the front door.Unfortunately, that utilization wasn't nearly enough to take full advantage of what extra software can do for banks these days. But good news is on the way. In my recent survey, I asked eight top bank tech vendors to name their most popular "best seller" technologies. I asked for ten. They delivered 21.

One-third of the 21 solutions bankers are now buying fall into the category of what the Comptroller of the Currency calls "safety and soundness." That's a new phenomenon and it would appear the red flag of recent banking disasters is having an effect on the idea of "what-if."

By the way, IT is still the quintessential workhorse of banking, so the other two-thirds are transaction processing applications related to newer stuff like, remote deposit, mobile banking, rebirth of cash management, rebirth of branch automation, bill pay, imaging, debit card, and more Internet banking.